Untitled - China Europe International Business School

Organization of the logistic chain in the Chinese international trade
Freight Forwarders
Freight forwarders are reaching a global scope through alliances or consolidation through M&A,
becoming able to provide international logistic services required by more and more globalized shippers
and allowing them to negotiate with shipping lines at a global level.
So far, Chinese forwarders cannot compete with international forwarders as long as they don’t have a
well established overseas network. Forwarding companies without an international network can’t
ambition global customers.
Moreover, Chinese logistic companies seem to lack of expertise to organize sophisticated logistics for
complex supply chains. A high turnover in management positions and shortage of qualified
professionals makes logistics capabilities in Chinese logistic service providers still limited.
Shipping Lines
Shipping lines are increasingly becoming key players in the logistic chain. As they extend services and
increase their market share through consolidation, they are becoming more decisive in the
organization of the logistic chain.
In order to cope with container cargo growth in the international trade worldwide and especially in the
East-West trade, shipping lines are going through a range of measures. To ensure customers need for
more space while reducing operating costs, shipping lines are incorporating new and bigger vessels
and reducing direct calls to ports therefore increasing ports competition.
Moreover, to escape the shortage of port capacity and land infrastructure in Europe which often leads
to congestion, shipping lines are increasingly investing in Ports terminals. In an environment of high
competition, the involvement in terminal operations allows shipping lines to control operating costs
while increasing efficiency for their customers’ logistic chains. Some of the strategies are:
– Investments in neighboring ports to escape congestion in main ports (for example, investing in
Antwerp to avoid Rotterdam) or create a network of ports that allow to make-up for any incident
or delay occurred in former stops.
– Investments in ports where return-cargo is secured.
On the other hand, existing strategic alliances between shipping lines are also providing many
synergies as shared use of terminals, common operating of liner services, vessel space exchange, etc.
Finally, as seen before, shipping lines through subsidiaries are also extending their scope, enlarging
their services from port-to-port to door-to-door services to add value and differentiate from their
competitors. However, shipping lines still need to rely on forwarders to accomplish inland
transportation for a while.
CEIBS Port of Barcelona Chair of Logistics 59