Logistics Management

The Chinese government is about to begin construction on what will be Asia's largest rail center. It will be located in the city of Chengdu, within the Sichuan province, and will serve as a railway link to the ports of Shanghai, Guangzhou, Shenzhen, Qingdao, Lianyungang and Tianjin.

It will reduce the transport time of rail cargo from its current 5-6 days down to 2 days and is another example of the enormous scale of Chinese logistics development projects.

See the article here.

Comments (0)

Chinese manufacturers are being hit by rising raw materials prices, increased inflation and currency appreciation all at the same time. This is leading some companies to look outside China for their low manufacturing cost solution. While these trends are likely to continue, I think that China will remain a competitive and attractive manufacturing hub for much of the world for many years to come.

While input cost are on the rise, productivity gains are only beginning to be felt and companies in China should look towards increasing worker productivity as the next frontier of COGS savings.

Read the full article here.

Comments (0)

In an exciting development, the Chinese government took a major step forward in improving communication and coordination across the logistics sector. The newly formed Ministry of Transport will combine the activities formerly conducted by the Ministries of Communications and Construction, the General Administration of Civil Aviation of China (CAAC) and the State Post Bureau under one roof. This will lead to streamlined organization and control of many logistics activities, thus enabling China to drive down its logistics costs.

Unfortunately,  the Ministry of Railways was not folded into the Ministry of Transport at this time. We all hope that progress is made on that front over the months to come.

 For logistics managers concerned w...Read More

Comments (0)

The data is in from the first comprehensive wage study conducted in China and the results are instructive for US managers who source goods from China. The summary is:

• The average China hourly wage is $0.98/hr, so there is still a significant wage difference between the US and Chinese labor costs
• Benefits actually are a larger percentage of the hourly wage in China vs. the US
• Benefits rates are going up
• There is upward price pressure on wages that has and will continue to erode a portion of China's low cost manufacturing position amongst its global competitors (India, Vietnam, etc) but as they move up the value curve, China remains an attractive place to locate manufacturing and develop supplier partners.

See t...Read More

Comments (1)

The world's sea-crossing bridge is opening in June. The world's largest deep-water port facility will be operational by 2010, a rail system and highways system designed to rival the United States'. Throw in some Magnetic Levitation  trains and you have to agree with the author of this article that the scale of the infrastructure project going on in China right now is indeed "mind boggling" See the complete article here.

Comments (0)

The bad news is that China was hit by one of the worst snow storms it has seen in over 50 years. All transport and travel have been seriously disrupted with millions of Chinese workers being left stranded on the eve of Chinese New Year (China's biggest travel holiday by a long shot). The good news from a supply chain point of view is that many or even most of China factories had shutdown before the worst of the storm and chaos hit, so the disruption to production will be relatively minor. It's still no picnic over there, but the worst of it is over. See this article for more information.

Comments (0)

Often times, companies focus on FOB product cost or total landed cost, but don't properly weigh the value of having high quality suppliers. The attached article makes a strong case for why selecting the right suppliers is one of the largest drivers in determine your company’s overall success in China. This article provides a lot of food for thought and is worth the read. Find the article here.

Comments (1)

It's no secret that great sums have been flowing into China in the form of FDI (Foreign Direct Investment) for more than a decade, but now the Chinese government is thinking harder about the type of FDI that will be best for China's long term growth. 

More isn't necessarily better is a new mantra emerging and this means that companies are going to need to bring something more to the table than their checkbook to attract the favor of the governmental regulars. Logistics was singled out as an area where key management skills and expertise are still needed in droves. Find the full article here.

Comments (0)

China's largest dry bulk freight carrier; Sinotrans; is raising public funds by listing shares on the Hong Kong stock exchange. Their plans are to use this capital to invest in a larger fleet. It's clear that it’s not only the large international logistics players that see the opportunity for expansion in China still. See the article here.

Comments (0)

If your company is just dipping its toes in China, please read the article below. If your company has been doing business in China for many years, please read the article below. It's nothing new, but the message from the interview is clear and I think it can't be stressed enough. The recent problems experienced by Mattel and others aren't unavoidable, although it's always easier to unravel China in hindsight...See the article here.

Comments (0)

Over the past weekend, the largest cold chain facility was opened through a joint investment by Eimskip and the Qingdao Port Group. The partnership has plans to expand the Qingdao facility's capacity into a regional and Asian cold chain hub. China's cold chain infrastructure does not get as much coverage as some other areas, but this development is noteworthy. The China cold chain still has a ways to go, but this investment is welcome. See the article here.

Comments (0)

This article on ThomasNet is worth reading and digesting. As a supply chain leader, you need to fight for more resources in your organization to make sure that having a high-caliber supply chain is one of your company’s strategic priorities. For some more ammo, click here.

Comments (5)