LSPs continue to invest in China

Unsurprisingly, global logistics service providers (LSPs) are continuing to invest in China.

The past couple of months has seen a particular burst of activity from the likes of Logwin and Kerry, but also Panalpina, Kuehne + Nagel and DB Schenker as they look to develop their presence in the country.

Of these, Kerry’s strategic development in China is of particular interest. Kerry is of course a Hong Kong-based company and has had a well established presence in China for some years, however its latest project in Zhengzhou, Henan Province illustrates how central and western China’s economy is developing. The 47,000 sq m logistics centre is being built in the newly opened ‚Singapore International Logistics Industrial Park‘. Kerry’s managing director for Mainland China explained that "China’s coastal provinces have refocused to attract manufacturers of higher value-added products and there has been a migration of production to the central and western regions due to lower land and labour costs, we see the potential to transform Zhengzhou into one of China’s manufacturing and processing hubs".

Sited on the Yellow River, Zhengzhou is also at the cross point of two key east-west and north-south railway lines alongside road links and a large airport. This makes it attractive to manufacturers looking to exploit lower cost labour beyond China’s coastal cities, yet who need fast access to both global suppliers and markets. In particular, Foxconn is reported to be using Zhengzhou as both a production location and a logistics platform for the assembly of Apple products.

In wider terms, Zhengzhou is looking to position itself as a centre for logistics businesses; in part by establishing a number of logistics parks around the city.

The approach of Panalpina is slightly different, with the forwarder’s new 10,000 sq m Tianjin consolidation centre located approximate to a large container port; complimenting its existing sea and air freight driven operations. Panalpina is looking to use such facility to drive its ‚value added services‘ businesses, however it is also acting as a platform for the automotive component business of Bosch in Northern China.

Both examples illustrate how the operations of global (as opposed to local Chinese) LSPs are deepening their presence in the country. Although many forwarders, in particular, still rely on a sales-office presence to drive business, the time is approaching when these companies will need to develop a stronger on-the-ground presence in central China to be sure of gaining a sustainable foothold in the market.

Quelle: eyefortransport
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