Armlogi Holding Corp. (Armlogi) operates as a fast-growing the U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment.
The company provides one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market. The company currently operates nine warehouses across the country, with an aggregate gross floor area of app...
Armlogi Holding Corp. (Armlogi) operates as a fast-growing the U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment.
The company provides one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market. The company currently operates nine warehouses across the country, with an aggregate gross floor area of approximately 2,765,667 square feet. Aside from a nationwide footprint and large storage space, the company’s warehouses are equipped with automated sorting systems, heavy-duty forklifts, and pallets and trays that are suitable for processing bulky items. As a one-stop warehousing and logistics service provider, the company offers a full spectrum of services, including customs brokerage services; transportation of merchandise to the U.S. warehouses; and warehouse management and order fulfillment services, which further include product storage and retrieval, product packing and labeling, kitting and repackaging, order assembly and load consolidation, inventory management and sales forecasting, third-party distribution coordination, and other value-added services. The company also provides warehousing and logistics services to its U.S.-based commercial customers, who are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations. In general, the warehousing and logistics services provided to its domestic customers are similar to those provided to its overseas customers. This allows the company to provide integrated solutions for its customers, whether they need domestic or international warehousing and logistics support. As of June 30, 2024, the company had an active customer base of 105 for its warehousing and logistics services.
Growth Strategies
The company’s strategies are to expand and diversify its customer base and geographic coverage; enhance its customers’ supply chain efficiency by expanding the breadth and depth of its solutions and services; further invest in supply chain technologies to drive sustainable growth; and pursue additional strategic and financially attractive acquisitions.
Business Model
The company provides its customers, comprising both international cross-border e-commerce merchants (primarily from the PRC) and domestic customers, with a package of warehousing and logistics services to select from, including facilitating overseas transportation of goods to the U.S.; customs brokerage services; transportation of goods to the U.S. warehouses; and warehouse management and order fulfillment services. While the company’s one-stop warehousing and logistics services cover a broad range of offerings, it recognizes revenue from the following three sources for accounting purposes:
Transportation Services: The company generates its transportation service revenue by purchasing transportation services from third-party carriers and reselling those services to its customers. It receives service fees, typically ranging from $5 to $75 for each service, depending on various factors, such as the load type, weight, volume, and delivery distance.
Warehousing Services: The company’s revenue from warehousing services is generated via its warehouse management offerings, including inventory management and storage services. It receives warehousing service fees, typically ranging from $3 to $50 for each service, based on the specific services that its customers choose and subject to a variety of factors that may affect the cost of those services, such as the total number of stock keeping units (‘SKUs’), weight, volume, and storage time.
Other Services: Other services primarily include customs brokerage services, where the company collaborates with customers to file the necessary documentation and pay the appropriate taxes and duties to relevant authorities. It receives brokerage service fees from customers, typically ranging from $20 to $200 per each service, depending on the number of items to be declared.
Customers
The company primarily serves two types of customers: overseas customers and U.S. domestic customers. The company’s overseas customers consist of cross-border e-commerce merchants outside the U.S. (primarily from the PRC) who intend to sell in the U.S. market via a variety of e-commerce platforms, such as Amazon, eBay, Wish, Walmart, and Wayfair. Those customers typically operate their e-commerce stores seeking to sell in the U.S. market but typically lack access to the warehousing and logistics resources in the U.S. Through the company’s expertise and liaison with the PRC, it is primarily targeting cross-border e-commerce merchants in the PRC, but it is also developing a growing international customer base in other countries, such as South Korea. The company’s U.S. domestic customers are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations.
As of June 30, 2024, the company had an active customer base of 105 customers for its warehousing and logistics services. For the fiscal year ended June 30, 2024, the company’s top four customers were Aukey International Ltd., Western Post (HK) Ltd., Goldensee Ltd., and Union Grand Imp. & Exp. Co., Ltd., representing approximately 11.7%, 11.7%, 10.9%, and 10.0% of the company’s total revenue, respectively.
As an example of a typical transaction, under a warehousing and logistics service agreement entered into by and between Armstrong Logistic, one of the company’s subsidiaries, and a warehousing and logistics service customer (the ‘Customer’), Armstrong Logistic is obligated to provide, or cause to be provided from third parties at no cost to the Customer, the following services, including receiving and processing product shipments from the Customer for fulfillment of the Customer’s end-user orders; storing inventory in warehousing facilities; picking and packing the Customer’s products from the inventory and shipping such products directly to end users upon notification by the Customer, utilizing appropriate packaging materials at Armstrong Logistic’s discretion, unless otherwise specified by the Customer; maintaining monthly ledger summaries of all orders shipped and received, available upon request by the Customer; facilitating any product returns from end users to the Customer; and additional value-added services that the Customer desires Armstrong Logistic to provide.
Suppliers
The suppliers of the company’s one-stop warehousing and logistics services primarily consist of its warehouse landlords and third-party logistics service providers, including FedEx and UPS, who assist the company in transporting customers’ goods from foreign countries to the U.S., and/or delivering goods from its warehouses to end consumers. Among the company’s suppliers, FedEx accounted for approximately 50% of its total purchases during the fiscal year ended June 30, 2024. Pursuant to the agreement, which has a term from April 10, 2020, until terminated by either party, FedEx is required to provide certain transportation services, including FedEx Express, FedEx Ground, and FedEx Freight, as indicated in the FedEx service guide in effect at the time of shipment.
Services and Operational Flow
Transportation of Merchandise to the U.S. (Ocean Freight Services)
The company launched its international ocean freight services in January 2023 and is actively expanding and refining these offerings, which have enabled it to further improve supply chain efficiency for its customers.
The company’s current one-stop warehousing and logistics services begin with facilitating overseas transportation of its customers’ merchandise to the U.S., primarily through ocean freight services arranged by the company with third parties, such as Cosco Shipping Lines, Evergreen Line, and Ocean Network Express. Since the company does not operate any international shipping business, it recommends global logistics services (primarily ocean freight services) to its customers based on its robust international network with its third-party global carriers.
Customs Brokerage Services
Andtech Customs Broker, one of the company’s wholly owned subsidiaries, is a licensed U.S. customs broker who can assist its customers in complying with all regulatory requirements. The company’s services help customers clear cargo with the U.S. Customs and Border Protection (‘CBP’), including documentation collection, valuation review, product classification, electronic submission to customs, and the collection and payment of duties, tariffs, and fees. The company collaborates with its customers to ensure that all necessary documentation is complete and accurate, and that all fees and taxes are paid in a timely manner. The company also works with its customers to develop a compliant program, including developing product databases and compliance manuals, and conducting periodic internal audits. The development of product databases has become critical in the current economic environment in light of rising trade tensions and various tariffs imposed as a result. In addition, the company offers its customers training seminars and trade consulting to improve efficiency.
Port Trucking Services and Delivery of Merchandise to the U.S. Warehouses
The company offers port trucking services (or drayage trucking services) to assist customers with the transportation of shipping containers from ports to storage or transportation facilities. Such services involve transporting containers within a metropolitan area for short distances, where the company is responsible for picking up containers from ports and delivering the containers to their destination. As a vital part of the supply chain, port trucking ensures that goods are transported efficiently and quickly from ports to distribution centers and other locations. The company’s fleet of trucks is regularly maintained and equipped with the latest GPS tracking technology, allowing it to provide reliable and efficient transportation services. The company’s port trucking services facilitate the transportation of customs-cleared goods to the U.S. warehouses, including Amazon’s FBA warehouses and its self-operated warehouses.
Amazon’s FBA Warehouses
Amazon’s FBA is a service provided by Amazon that provides storage, packaging, and shipping assistance to sellers. Any merchant who sells on their website can use the FBA service, which takes the burden off of sellers and grants them more flexibility in their selling practices.
Some of the company’s customers intend to sell on Amazon and request that all or part of their merchandise be delivered to Amazon warehouses. Nevertheless, Amazon has guidelines regarding how goods delivered through their FBA services must be prepared, which are usually unfamiliar to the company’s customers. Through the company’s expertise and experience in these preparations, it helps its customers streamline their logistics work by taking care of such preparation work. The company provides customers with the service of receiving packed shipping containers and repacking them in order to meet Amazon’s FBA requirements, as well as shipping those goods to Amazon’s FBA warehouses.
Self-operated Warehouses
In many cases, the company’s customers may only intend to send a portion of their merchandise to Amazon’s warehouses to be sold via FBA, while the remainder needs to be stored and sold via other online e-commerce platforms. As a result, the company provides services for delivering these goods to one of its nine warehouses in the U.S. for further services, such as warehousing, storage, and e-commerce order fulfillment.
Warehouse Management and Order Fulfillment Services
Generally, the company’s warehouse management and order fulfillment services are designed to help its customers store and transport their products, and are provided at competitive rates based on the specific needs of each customer. The company has a team of experienced professionals who are trained to handle these tasks efficiently and effectively to ensure that its customers’ products are stored, handled, and delivered efficiently.
The company records all inventory information when customers’ goods arrive at its warehouses. It is able to manage its warehousing network and the goods stored therein efficiently, due to its high level of warehouse automation and strong technology capabilities. The company’s warehouses are equipped with advanced automated storage and retrieval systems for parcels and freight.
The company offers a variety of warehouse management and order fulfillment services, primarily including product storage and retrieval, product packing and labeling, kitting and repackaging, order assembly and load consolidation, inventory management and sales forecasting, third-party distribution coordination, and other value-added services. The company’s customers, consisting primarily of e-commerce merchants, outsource warehouse management and order fulfillment to the company so that they can focus on running their business via online platforms, such as eBay. Specifically, when a U.S. consumer places an order online via such online platforms, the order information will be transmitted to an e-commerce resource planning system (the ‘ERP system’) used by the customer, which is capable of gathering and consolidating order information from various e-commerce platforms. With the company’s customers’ authorization, such order information is subsequently transmitted to its Armlogi OMS, which is compatible with most of the ERP systems used by its customers, and then to its Armlogi warehouse management system for further processing.
As of June 30, 2024, the company only provides warehousing services and logistics management services and does not provide distribution services itself, as it does not have its own delivery team or networks; rather, deliveries are all handled by third-party logistics service providers, such as FedEx and UPS. For each parcel delivered, these third-party logistics service providers provide tracking numbers, which are transferred to its customers’ ERP systems, so that both the company’s customers and end consumers can track its location at any time.
Further, the company provides value-added logistics services, which primarily include after-sales reverse logistics and specialized packaging. As a result of the company’s comprehensive value-added services, it is able to attract new business and strengthen its relationships with existing customers. Specifically, for after-sales reverse logistics services, the company provides exchange and return management services, as well as product inspection and refurbishment. With the company’s specialized packaging services, it offers custom or rigid packaging services using premium folding cartons, inserts, and labels. The company utilizes a wide variety of materials, including paper and paperboard, pressure-sensitive labels, plastic, and foil.
Additionally, the company provides facility rental services, allowing customers (primarily the company’s domestic customers) to rent space within its warehouses or other facilities on a short or long-term basis. The company provides a cost-effective solution for customers who need additional storage or production space but do not want to invest in their own facilities.
The company generates revenue by charging service fees, typically ranging from $3 to $500 for each service, for its warehousing and logistics services, which vary depending on the specific types of services selected by its customers, and are subject to various factors, such as the load type, the total number of SKUs, weight, volume, storage time, and delivery distance. In addition to the service fees, the company also charges its customs delivery fees for services provided by third-party logistics service providers, such as FedEx and UPS. Due to its long-term partnerships with third-party logistics service providers, the company offers its customers reasonable and affordable transportation rates — due to the size and volume of packages it sends to its collaborative third-party logistics service providers, it is able to consolidate small shipments of goods to achieve lower transportation rates for its customers.
Intellectual Property
As of June 30, 2024, the company has the following intellectual property rights in the U.S.: one trademark (namely, the trademark ‘ARMLOGI,’ registered with the U.S. Patent and Trademark Office on January 17, 2023); five domain names, including armlogi.com, armlogi.net, armlg.com, armtk.com, and tkarm.co; and four software copyrights for the company’s mobile apps, including Armlogi Trucking, Armlogi WMS, Armlogi OMS, and Armstrong Logistic Security (website), respectively.
Governmental Regulations
The regulatory bodies that regulate the company’s business include, but are not limited to, the Federal Maritime Commission (‘FMC’), the CBP, the U.S. Department of Homeland Security (the ‘DHS’), the Occupational Safety and Health Administration (the ‘OSHA’), the Consumer Financial Protection Bureau, and the U.S. Department of Transportation (the ‘DOT’).
The company is licensed by the FMC to operate as an ocean transportation intermediary (‘OTI’). Further, the DHS regulations applicable to its customers that import goods into the U.S. and the company’s contracted ocean carriers may impact its ability to provide and/or receive services with and from these parties. The company is also licensed as a customs broker by the CBP, nationally and in each U.S. customs district in which it does business. Furthermore, as the company is involved in the transportation of goods, it must comply with the DOT regulations regarding driver qualifications, vehicle maintenance, and hours of service.
The company is subject to federal, state, and local environmental laws and regulations, such as the National Environmental Policy Act, the Resource Conservation and Recovery Act, the California Environmental Quality Act, and the California Integrated Waste Management Act.
History
Armlogi Holding Corp. was incorporated in 2022.
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