WCA Family: Creating the world's largest global logistics network (part 1)

Aug 10, 2009

ENSURING financial security in a global financial crisis will win you many friends, particularly when considering the current global climate. And that is one of the reasons why the WCA Family of Logistics Networks has seen such impressive growth in recent years, growing to become the largest freight forwarder and global logistics network in the world.

We sat down recently to speak with the organization’s founder and president, David Yokeum, to learn more on the organisation’s rapid rise to prominence and what they offer in the marketplace today in what is, at best, an uncertain environment.

"We are not just another network,” Mr Yokeum insists.

So what separates WCA from the many other logistics networks in the world today?

The answer here lies partially in the WCA president’s extensive experience both as a neutral observer and an active participant in the industry for 23 years.

Initially, Mr Yokeum helped establish what was known as United Shipping, which was his first attempt at forming an industry network.

The lessons he would learn during his time working with the group would serve him well later in life.

"It was an exclusive network, meaning that it would only permit one member per market to join, and it was member-managed. I was the president, a neutral body, but I answered to the board of directors [made up of members from the various companies within the network],” he explained.

Despite facing initial success, the former United Shipping president told The Container Shipping Manager that the network’s structure was something he soon learned needed some fundamental changes—two in fact.

"I found that United Shipping started to level off. It wasn’t the aggressive group that I had anticipated,” he said.

"It took me awhile to figure out why we weren’t still growing. I looked at other networks outside our own to see if they were doing better and no they were not."

The two key areas Mr Yokeum found to be the root cause behind the stagnation was firstly, exclusivity, and secondly, these networks were all member-managed.

The trouble with exclusivity, the president noted, is that while it sounds like a good idea, in practical terms it simply does not work. On the issue of member-management, this has one major drawback, Mr Yokeum said.

"This does not work because the way of operating becomes more and more politically motivated. This is human nature. You are going to want to watch out for your own business over everything else,” he said.

This is not good for the group, and ultimately other members are not taken care of in the way they should as equal members.

In 1998 our source left United Shipping, taking with him years of experience and now some additional wisdom regarding what needed to be done in order to make a successful logistics and forwarding network.

Later that year Mr Yokeum launched the World Cargo Alliance from his base in Miami, under two simple rules—the network would NOT be exclusive, and it would NOT be managed by members, but rather through an impartial owner, namely himself.

The network began essentially with three members roughly 10 years ago. But the decade to come would be a hectic and prosperous time for Mr Yokeum and the WCA.

The initial goal was to grow from three members to 500 members. The goal was achieved in just one year.

It soon became apparent that being based in the US was not ideal as a bulk of the growth in world trade was coming from Asia, and the region was home to the fastest growing emerging markets in the world at the time.

Mr Yokeum finally set up his new base in Bangkok due to its ideal location nestled between the major Asian cargo hubs of China’s Pearl River Delta, Hong Kong, Taiwan and Singapore.

Although the United Shipping founder had decided his new network would not be exclusivist, he did want to reduce membership to no more than five companies per market.

As a result of the initial success, membership grew at a ferocious pace, so much so that they were having to reject a number of applicants.

"New networks were being created off the memberships that we were rejecting, and these were good companies, very good companies,” he explained.

After much deliberation and consultation with his members, Mr Yokeum decided to open up a second network—the Advanced Professional Logistics Network (APLN), under what would become the WCA umbrella of logistics and forwarding networks.

Around the same time, the WCA president was also approached by the China International Freight Forwarders Association (CIFA) to see how the WCA could help Chinese forwarders, just as the country was preparing to enter into the World Trade Organisation.

The number of freight forwarders in China at the time was estimated to have been around 34,000—a huge potential market that as yet had been left untapped by the outside world.

Needless to say, the WCA soon launched its first country-specific network called the China Global Logistics Network or CGLN. It too was based on the same principles that had provided WCA’s success to date—non exclusive, and impartially owned and governed.

The network now comprises more than 1,000 members in more than 150 countries.

Following the success of its third network, more companies wanted to join the WCA family. However, a number of these companies did not want to join CGLN due to its limited trade scope. So a fourth and final network was setup—the International Global Logistics Network (IGLN), whose membership now comprises just under 900 companies.

This, Mr Yokeum assures us is the final network that will be setup under the WCA umbrella of networks, and is still capable of taking on members.

Overall the group is now the largest network of freight forwarders and logistics service providers in the world, with over 2800 members in more than 160 countries around the world, a feat that the president would no doubt have not imagined just 10 years ago.

"Over the past 10 years I have travelled to more than 125 countries, and I’ve met over 5,000 freight forwarders in their offices around the world and this has given me a greater insight into the needs of the small to medium independent forwarders worldwide,”.

And it is this “insight” that has helped shape the services and the focus that the group provides to its network partners today.

Join us for tomorrow’s The Container Shipping Manager to learn about the services WCA provides its members and the latest projects the group is currently working on...