Untitled - China Europe International Business School

Organization of the logistic chain in the Chinese international trade
V.3. The main players in the logistic chain
Shippers and consignees
The trend in China towards more high-value manufacturing and the increasing competition to lower
costs at a global scale will drive the logistic outsourcing requirements for the shippers in China and the
customers in Europe. Speed to market, more sophisticated logistic services, a more reliable and
flexible logistic chain and less fragmentation in the flow of information and money are some of the
cargo owners increasing requirements.
Speed to market
Shippers producing in or sourcing from China agree about the fact that the time required for a product
sourced or produced in China to reach the European market is currently too long and needs to be
reduced. This requirement becomes especially critical in some sectors and lead to use air
transportation.
� For a European retailer sourcing in China, from placing an order to reach the store, a product
needs more than 100 days. If the sourcing process of choosing a supplier, sending samples,
quality control, etc. is taken into consideration, then the whole process can last for more that one
year.
� In the consumer electronics sector, products with a high volatility price, and fast obsolescence
after being launched, are shipped to Europe by air to reach the speed required.
Logistic chain’s integration
More and more customers in Europe are demanding door-to-door services to the manufacturing
companies in China. Therefore, companies in China have shift from dealing with several logistic
providers, usually their customers’ freight forwarder, to look for a contract with one global and
comprehensive logistic provider who can manage the whole logistic chain for their exports from China
to Europe. This global operator can be an international forwarding company (Kuehne&Nagel,
Panalpina, Exel, etc…) as well as global intermodal companies (Maersk, …). The main requirement is
to take care of all the necessary range of services to handle the flow of exports between the
manufacturing site in China and the customers in Europe. A comprehensive network within Europe is a
must. However an important presence in China is also required to ensure a smooth communication
and easy the shipments’ follow-up in the Chinese part of the logistic chain. A reputation of good service
in Europe, financial advantages and Chinese market know-how are also quoted by the companies
interviewed as important issues in the selection of this kind of Logistic provider.
Building direct-to-shop delivery containers
For certain industries like retail or garment, freight forwarders and 3PL’s are starting to build logistic
platforms in China to consolidate cargo and build containers to delivery directly to stores. Consolidating
and performing specialized value added services (labeling, CQ, ironing, etc...) in China eliminate
deconsolidation at destination in Europe creating a cost advantage.
CEIBS Port of Barcelona Chair of Logistics 58