Family-run logistics business stresses service amid labour, tech challenges

Family-run Hub Distributors Services' unwavering focus on its staff and customers has helped it thrive since 1989.

HUB Distributors Services' tagline "We Believe in Service" may seem like an ordinary marketing catchphrase, but the owners of the company say that building a good relationship with their customers and staff has been one of the reasons it continues to survive and thrive since it was founded in 1989.

The firm - a third-party logistics services provider - is run by managing director Alex Ea. It is a family business in the truest sense of the term: its organisational structure even resembles the Ea family tree. HUB Distributors Services is managed by Alex Ea, and its two related companies - HUB Logistics and HUB Express - are managed by two of Mr Ea's sons Alvin Ea and Andy Ea, respectively.

HUB Logistics and HUB Express, which were formed in 2012 and 2014 respectively, manage highly distinct operations: HUB Logistics is primarily responsible for container haulage, while HUB Express focuses on last mile deliveries.

Alvin Ea explains that there are clear advantages that family-owned businesses benefit from such as staff loyalty and easier maintenance of long-term "family-like" relationships built with its staff and clients. His father, Alex Ea, added that one of the reasons for the relatively low turnover rate was the strong bonds that his staff have formed with him and his sons. "Some of them have literally watched my children grow up," he said.

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When The Business Times went to the company's Clementi warehouse, Alex said in Mandarin: "We have been working with some of our customers for many years, and we sometimes like to think we know our customers' products better than them."

This is a nod to the deep understanding of the products that they handle. They have acquired this knowledge because HUB Distributors Services offers end-to-end integrated logistics services, and so is familiar with the goods they handle from its origins in the factory to its final destination in retail stores and homes.

It is precisely this that allows the company to be able to advise its clients on more efficient and optimal ways of handling and distributing their products, working with them more as partners, rather than just acting as a faceless middleman.

Another example of their level of dedication comes in how responsive the Ea trio are to their clients. Alex said that he is always available for a chat at any time of the day, and offers a 24-hour service to the companies' clients. He said: "Even if the phone rings in the middle of the night, we will make it a point to take your call." Alex recounts an instance when at midnight he received a call from a client - which manufactures battery cans - informing him that its production had stalled as it had run out of supplies. The client asked Alex if he could have the three to four-tonne units of raw materials delivered to the factory by the hour, which Alex managed to accomplish.

Amd he managed to do it without cutting corners, he said, recalling all the necessary staff members which included even the security personnel to oversee the process.

Mr Ea said: "We really treat all of our clients like VIPs, and don't discriminate based on size. When we say 'We believe in service', we mean it."

It is their dedication to the needs of the clients that has resulted in a number of returning clients, some of whom have been working with the firm since its inception.

It has worked with Japanese firms Lion Corporation and Meiji Seika since 1991 and 1995 respectively, delivering their consumer goods to supermarkets such as Cold Storage and elsewhere.

Today, it counts brands that include Lazada, LF Asia, and 7-11 among its clientele.

Its knack for providing value-added service extends beyond its clients, but also to the staff. In particular, Alex said that the firm was exploring changing the contractual business model for hiring its drivers.

Taking inspiration from the business model behind today's sharing economy, Mr Ea explained that instead of having drivers work solely for the company, he is exploring the option of letting drivers accept freelance delivery jobs outside of HUB Distributors Services - but only after it completes a certain number of jobs for the firm first.

This would not only give greater autonomy on the part of the drivers, but the increased flexibility would also benefit the firm when demand for its services fluctuates.

Mr Ea said the firm's revenue has more than doubled, from S$7 million to S$15 million, over the last five years and also said it has 150 members of staff today.

But behind these strong revenue figures lie pressing difficulties that the firm has to solve if it wishes to continue its positive streak.

Among these issues include a difficult labour market and the threat of disruption from automated delivery services brought about by technological changes.

Few Singaporeans are willing to do such an "unglamorous" job, said Mr Ea. "They know the job market is tough for employers and SMEs. I've had interviewees come in for job interviews here, but the first thing they ask about is the benefits they can expect to receive.

"If they don't like what they hear, then sometimes they just leave, thinking that there will be a better job elsewhere. For us, it's been difficult to hire good people, especially for our pool of drivers."

And on the technological front, Mr Ea said that while there have been advancements in the area of automation and robotics, these technologies tend to be expensive and it is the larger firms rather than SMEs like themselves that tend to adopt them first.

Nonetheless, it is working with system engineers to better optimise its current processes, and the team also does what it can to go digital, reducing the paperwork volume needed for its many transactions.

When asked to comment on the nature of the family business, Mr Ea said that while there are advantages to keeping the business a family-owned one, he wanted to ensure that meritocracy prevailed - if any member of staff were capable enough, they should be rightfully promoted into management positions.

He said: "Speaking as the younger generation of the Ea family, eventually I want to transform HUB from a family-run business to a professional one - meaning that we are open to hiring outsiders to run the business in the future as long as they are qualified to lead the company.

"At the same time, it is also my dream for it to become a multi-generational family business in Singapore. If we can solve the difficulties we are facing now, I think it is an achievable dream."

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