Infrastructure in China

Current and near-term state of logistics in China

 Double digit growth was projected for the logistics industry for the next five years, starting in 2006.

·        Seaports are among the most efficient and contemporary in the world.

·        Well developed coastal regions gain the wealth of international trade while inner regions of the country have a wide economic gap in comparison.

·        Current rail system receives less than two percent of export shipping, the rest arrive by truck.

·        94% of the current international trade comes from within 150 miles of the coastline.

·        A new railway to Tibet has an impact on current flow of people, goods, and economic value.

·        Government is aware of current state of transportation infrastructure and is eager to improve the capabilities of the nation as a whole.

·        Currently, supply chain management is moving from the government to manufacturer or 3PL planning in order to increase efficiency and responsiveness.

C Current and near future obstacles for international logistics firms in China:

·        Investors are cautious about opening in Chinese market due to difficulties entering into the culture of Quinxhi.

·        Reliance on trucks for movement of goods adds costs to logistics as well as time delays of sensitive materials.

·        Logistical companies are using traditional services and are still moving towards modern logistics, service may not be in a professional method.

·        Containerization is key to current export strategy but many logistical functions are still arriving to the port by truck. This leads to heavy traffic that exceeds the current capacity and shortages of key commodities in the region.

Necessary improvements to address these obstacles:

·        Railway infrastructure to connect more parts of the country then the current road system and railway system.

·        A plan already in place includes the building of eighteen logistical centers to encourage the distribution of containerization throughout China.

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