Executive Briefings

Implications of Chinese Globalization for the Logistics Industry

The next 10 years will see a seismic shift in the balance of power in global supply chains, according to John Manners-Bell, CEO of Transport Intelligence.

Chinese manufacturers are fast developing from low-cost suppliers of cheap goods for foreign OEMs into global brands in their own right.

This shift has been largely prompted by the Chinese authorities who have encouraged companies to migrate up the value chain. This is sensible in an economic environment where inflationary pressures are making it increasingly difficult for Chinese manufacturers to compete on cost alone. There is also a political imperative which sees globalization as the next logical step for Chinese companies.

This has major implications for the associated logistics market. Bringing a Chinese brand to Western consumers will mean that these companies will be increasingly taking control of their supply chains. They will establish distribution networks in North America and Europe and in some cases have already done so. This is a long way from the factory-gate strategies that all pursued in the 1990s.

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The next 10 years will see a seismic shift in the balance of power in global supply chains, according to John Manners-Bell, CEO of Transport Intelligence.

Chinese manufacturers are fast developing from low-cost suppliers of cheap goods for foreign OEMs into global brands in their own right.

This shift has been largely prompted by the Chinese authorities who have encouraged companies to migrate up the value chain. This is sensible in an economic environment where inflationary pressures are making it increasingly difficult for Chinese manufacturers to compete on cost alone. There is also a political imperative which sees globalization as the next logical step for Chinese companies.

This has major implications for the associated logistics market. Bringing a Chinese brand to Western consumers will mean that these companies will be increasingly taking control of their supply chains. They will establish distribution networks in North America and Europe and in some cases have already done so. This is a long way from the factory-gate strategies that all pursued in the 1990s.

Read Full Article