Logistics colossus China

Logistics colossus China - A rise without borders

For years there have been many articles on the Internet and in conventional media about China, its rise as an economic power and how we in the West can best deal with it. Here, however, the main focus shall be on the logistics in the background, i.e. the driving force without which, this rise and China's further expansion in the future would never be possible. Furthermore, we compare different means of transport, discuss their advantages and disadvantages as well as the respective delivery times and round everything off with a conclusion including an outlook.

First, a few facts and figures: In 2012, a full six years ago, China's trade surplus amounted to USD 231 billion and exports to USD 2.05 trillion - an increase of 8% over the previous year's high. Three years earlier, China overtook Germany for the first time as the world's leading exporter, and in 2011 China exported 26% of its gross domestic product. China's most important trading partners are the EU and - due to current political events - the USA, as well as Hong Kong as a designated special economic zone, whose importance is slightly decreasing. All these are enormous figures, behind which, as already mentioned, there is an equally enormous logistics machinery. So let's take a look at the most important main traffic routes.

For one thing, there's sea freight. It makes it possible to transport masses of goods quickly to the customer by relatively low transport costs, which are realized by large transported quantities, as well as a generally high handling speed. Standardized dimensions enable fast handling of the goods, which in turn increases reliability. Long delivery times, as well as long pre- and on-carriage times, would be negative here, as not only the pure travel time in the container should be considered, but also the additional truck traffic to and from the port. The delivery time for container freight via ship is approx. 4-6 weeks. Rail transport should also be emphasized, the main advantages of which are environmental friendliness and speed - this is precisely where an advantage over sea freight can be seen. However, a worldwide connection is not yet possible here, i.e. no direct traffic between the point of departure and the destination, so some additional modes of delivery (e. g. truck) must be booked as a combination. Furthermore, the delivery costs are higher, as the high quantities are simply not available compared to sea freight via containers. The delivery time here is approx. 15 days.

Last but not least, the speed leader: air freight. It is the fastest of all modes of transport; high safety standards in air traffic also ensure the safe arrival of the goods. However, it is also extremely harmful to the environment, is only suitable for hazardous goods such as batteries and rechargeable batteries to a limited extent, and is very expensive due to the limited cargo space. The delivery time for goods here is about 7-10 days.

So you can see from our little insight into logistics that behind the scenes a lot of effort is needed to comfortably supply us with the goods we need. Germany, but also the EU as a whole, are becoming more and more important, as the trading partner USA is sometimes, as mentioned above, to be assessed as unstable. This does not have to remain so, but at present it reflects reality. China is also aware of this and is increasingly opening up towards Europe - so both sides can benefit from the situation. However, not only opportunities but also risks await us. For example, we can expect our know-how to migrate, a development that, if not controlled, can cost us jobs and competitiveness in the long term. It is also possible that Germany may lose its reputation as an export power in the medium to long term due to China's massive investments in logistics and infrastructure. It is therefore important to strike a balance between prosperous cooperation and caution. If we find this middle ground, however, nothing stands in the way of a reality in which both sides profit from each other.

ASEAN Consulting helps you to find exactly this middle way. China's expansion is undoubtedly one of the most significant economic ventures of recent decades, not least because of China's new Belt and Road Initiative, which will give the country a further economic boost. We act as a link between Asia and Europe, we take care of the procurement of suppliers as well as product management - on site, directly with the people. We not only have the business management know-how, but also the language understanding to support you with our broad network. Whether it is travel preparations or the search for a suitable supplier for your purchase, there is no question that we would not be able to answer. Refer to your core competencies - we take care of the rest.

Talk to us and let us be successful together!