Chapter 175: The Challenge of Maritime Shipping
Robert added, "But since this investment will be fairly large, you may also need to expand your production scale—specifically, by building a new glue factory."
"A new factory?" Yang Wendong thought for a moment and replied, "That's not a problem, but I'll need some guarantees from you. If I build the facility and you end up not using my glue, I'll take a major loss."
Robert chuckled. "To start, you won't need to invest in new production lines right away. If there are no quality issues, we can sign a long-term supply contract."
"Alright," Yang nodded. "Then there shouldn't be any problem."
"Good. Once we've decided where we'll invest, we'll discuss the details again," Robert said with a smile.
"Okay," Yang replied with a slight smile. This would only be a minor collaboration.
What mattered more to him wasn't how much he could earn from it, but rather the broader impact—if a company like 3M invested in Hong Kong and established it as a manufacturing base, it would create substantial employment and economic growth.
That wouldn't mean much to someone like Yang personally, but it would be a huge boon for local Chinese workers. In a sense, his "butterfly effect" had created something positive.
After a pause, Robert said, "Eric, initially we came to Hong Kong just for this collaboration, but now we have another potential project."
"What is it?" Yang asked.
Robert smiled. "I saw your new rolling suitcase at the airport the other day. I didn't realize you'd invented yet another brilliant product. I'm amazed—how do you come up with so many ideas? Post-it Notes, adhesive hooks, that rotating mop…"
"Maybe it's just talent," Yang replied "confidently." Saying something like that to Westerners wouldn't come across as arrogant.
Talent was a vague but powerful excuse—differences in capability between individuals could be vast.
"Indeed." Robert nodded. "This suitcase has just launched, hasn't it? Why don't we partner up on it, like we did with Post-it Notes?"
"You want to distribute the rolling suitcase? I thought your company doesn't deal in this type of product?" Yang asked, not entirely surprised by the quick interest.
Unlike adhesive hooks, suitcases were mobile by nature—once someone bought one, they'd carry it around, making it visible to others and attracting attention quickly.
What Yang hadn't expected was that the first potential distributor to approach him would be from 3M—and that they'd discover the product while already visiting Hong Kong for something else.
Robert said, "True, we don't currently deal in luggage. But with our distribution channels, selling a product like this won't be difficult.
Eric, we've worked together for over a year now. You know how we treat our partners. I think this could be the start of another great collaboration."
"Let's discuss it," Yang replied after a moment's thought.
International distribution required strong local partners. Luggage was bulky and costly to ship and store. Without sufficient infrastructure and financial muscle, you couldn't do it at scale.
"Great." Robert was delighted. "I'll pitch it to our board when I get back. Once they see the product, I'm sure they'll approve."
"I hope so," Yang said with a smile.
For now, it was just a preliminary agreement. The details would take time to finalize.
After Robert and Robin left, Yang called in Qian Shangde, who managed the glue production and technology operations, to brief him on the situation.
Qian replied, "Technically, it's no problem. The glue required for most tapes is a basic high-adhesion type. We can make it ourselves.
If demand grows, we'll just buy another production line from overseas."
"Do we have the patents for this?" Yang asked.
"Yes," Qian replied. "Over the past year, we've acquired several patents, originally for new versions of glue traps. They're suitable for adhesive tape production too—unless 3M has specific proprietary requirements."
"Good," Yang said. "You'll handle negotiations. I want this project to move forward."
"No problem," Qian agreed.
Yang then turned to Wei Zetao. "Do we know what Robert's been doing these past couple of days?"
"They've been visiting Tan's Chemical Plant," Wei replied. "I think they want Tan's to produce the film substrate for the tape."
"That makes sense. If Tan's is onboard, then Hong Kong will have a complete tape industry," Yang nodded.
Tan's Chemicals was run by Tan Kah Kee's family—highly respected in Hong Kong. Like Yang, they were called "industrial kings," and Tan was known as the "Chemical King."
Their main products included insulation film for construction and agriculture.
Qian said, "They should be able to do it, though they'll likely need to invest in new machinery—just like we did. It depends on 3M's conditions."
Wei added, "If 3M sets up a tape operation here, others will jump in too."
"That's normal," Yang said with a smile. "It would be a good thing for Hong Kong's economy. And it would benefit our glue business too."
Once the local supply chain matured, more businesses would emerge, and competition would drive innovation.
This was why many governments in other countries led the charge in building industrial supply chains. Once mature, private enterprises would naturally follow.
Unfortunately, Hong Kong didn't have that kind of government support. The colonial administration wouldn't bother.
Qian added, "Right. The higher our glue volume, the lower our costs—especially in raw materials."
"Alright, let's move forward. Just coordinate with 3M," Yang said. "Old Wei, our current priority is increasing rolling suitcase production.
If we reach a distribution agreement with 3M, demand will skyrocket past our current capacity."
"Got it. But we have a serious shipping problem," Wei said. "I looked into it yesterday. The freight cost from Hong Kong to the U.S. is $21 USD per cubic meter.
One cubic meter can only hold about ten suitcases. So the transport cost alone is around 12 HKD per unit.
Add in port handling fees, and the landed cost becomes too high."
"That's definitely a problem," Yang nodded.
Before containerization, ocean freight costs were outrageously high.
The container revolution of the 1970s was what made global industrialization truly possible—by slashing shipping costs.
Yang knew about containers. But it wasn't a matter of creativity—it was a matter of infrastructure.
Containerized shipping had already been proposed in the U.S. and Europe. The ships existed, but there were few ports equipped to handle them.
Global port upgrades were still years away. In Hong Kong, the container revolution wouldn't begin until the late 1960s.
Maybe Yang could get involved in the future. But for now, even if his net worth were ten times higher, he couldn't fund a modern port by himself.
Wei continued, "And it's not just about cost. Worst-case scenario, we price higher in the U.S.—3M has the brand to do that.
The bigger issue is that our suitcases take up too much space. If we try to export in bulk, we may not even be able to book enough shipping space. Ocean freight slots are already tight."
"So… you're saying we should buy a ship?" Yang asked.
"If we want to seriously target the U.S. and European markets for suitcases, then yes. I think it's necessary," Wei said firmly. "Otherwise, shipping alone could choke us."
"Shipping?" Yang rubbed his chin. "What kind of ship?"
"Second-hand," Wei replied. "A decent, not-too-old 10,000-ton ship goes for about $500,000 USD.
It can hold nearly 10,000 cubic meters. That means we can fit 50,000 to 70,000 suitcases per trip.
With standard operating costs—fuel, crew, maintenance—we could break even with just 10 round trips a year.
And more importantly, we'd have complete control over schedules and reliability."
"50,000 to 70,000 suitcases per trip…" Yang did some mental math. "That's a real business."
Wei nodded. "Absolutely. The economics work. The downside is, we won't get loans for a used ship—Japanese banks won't finance them, and local banks are reluctant too.
We'll need to pay cash, unless we offer other assets as collateral."
"What about new ships?" Yang asked.
"A new 7,000-ton vessel from Japan is around $1 million USD," Wei replied. "For a 10,000-tonner, you're looking at $1.5 to $2 million. And you'll wait over a year."
"Forget it. That's way too expensive—and too slow." Yang shook his head. Shipping was a capital-heavy industry.
In this era, shipowners held higher status than real estate or industrial tycoons.
Wei grinned. "Second-hand is a better deal anyway. Maintenance and fuel costs are higher, sure. But oil prices are low right now."
"I can pull together $500,000," Yang said. "But once we buy the ship, how do we run it? We'll need an entire crew."
"Hiring's not hard. Just takes money," Wei said. "Captains usually earn two to three thousand HKD a month. Sailors are only three to four hundred.
Compared to the cost of the ship, that's pocket change."
"Alright. Let's finalize the 3M partnership first. Then we'll publicly announce we're hiring a ship captain," Yang said. "The timeline for both should match up nicely. Once we get the ship, we poach the crew."
Maritime shipping would be a goldmine for the next 20 years—far more lucrative than real estate.
In 1967, the Middle East war would break out, and shipowners would rake in enormous profits.
By starting now in 1960, Yang would have seven years to scale up before the boom hit.
Wait too long, and he'd miss the golden opportunity.
Plus, his own exports would guarantee baseline business for his shipping company—even if global rates plummeted. And if rates soared, he'd slash costs and outcompete rivals.
Win-win.
"I'll contact a headhunter to find us a shipping expert," Wei said with a grin.
Friends, if you enjoyed the novel, you can subscribe to my Patreon channel.
Until November 30st, get 30% off both your subscription and the purchase of your novel. Thank you for your support.
Read 40 Chapters In Advance: patreon.com/johanssen10