Untitled - China Europe International Business School

Organization of the logistic chain in the Chinese international trade
Companies exporting to Europe put big emphasis in the importance of the transit times between the
port in China and the port in Europe, and if the carrier has direct or non-direct call to the destination
port.
Shipping routes (schedules, ports of call and frequency) are established by shipping lines according to
the flows of cargo. Several key elements determine the order to call ports: cargo volumes, feeder
frequency and transshipment cost, berthing windows, cost of handling containers, logistics and
transportation network of the port’s hinterland, terminal’s level of service among others.
Logistics facilities
Companies’ main requirement in China is a consolidation center. The consolidation centers are usually
managed by International forwarders. The location and type of facility depends mainly on the price
requirements and on the level of sophistication of the product and services required. Facilities in
Logistic parks, trade zones and bonded areas are more expensive and sometimes still in an initial
phase of operating so policies are not clear enough and operations can suffer from it.
The distribution within Europe is usually decided and organized in Europe by the company or through a
3PL, with the support of distribution centers or through shipments of FCL directly to customers’
facilities.
The Logistic department in China does not participate in the decision-making and has a superficial
knowledge of the European part of the logistic chain.
Companies usually make the difference on the kind of infrastructure they need depending on:
� When the goods are in a transit country, companies require facilities in bonded areas.
� When the goods need processing (assembly, packaging, etc) or for further distribution,
companies require facilities in logistic parks with good land connections.
On the other hand, when Chinese exporters are starting in a new market within Europe, before
organizing their own distribution center, they demand warehousing space to freight forwarders to
storage some goods to ensure a good service to new customers, reliability and to shorten delivery
times, etc…Later, if the business is working, they will create their own distribution center.
CEIBS Port of Barcelona Chair of Logistics 53