Excerpt from: China Supply Chain and Logistics Strategy
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| November 01, 2005 | | Road Transport Between China and Europe - US East Coast | The development of reliable land bridge cargo services from China to Europe, with onward connections to the US east coast, is slowly gathering momentum. However, China has not signed up to the TIR convention, thus halting progress. In addition, other legal and political issues need to be worked out.
Increased congestion at port facilities and rising maritime freight rates have spurred greater interest in utilizing cross-border trucking which would reduce some transit times by up to 2/3rds. In addition to developments in trucking, 26 railways signed a protocol in Washington, DC to commence regular container train service between China and Western Europe, with further routing to the US east coast.
Companies which have a sustainable competitive advantage over their rivals have supply chains that are more than just fast and cost effective. As Hau Lee from Stanford preaches, to sustain competitive advantage, your supply chain must be agile, adaptable, and aligned. Consider some of the following from the concept of the “Triple-A Supply Chain”:
Agility
Unexpected external disruptions like port strikes, natural disasters, epidemics, etc may require a quick response – what is your plan B for getting China sourced product to US and European markets? Is the land bridge a viable option?
Adaptability
Economic changes in Eastern Europe may favor locating part of your supply base in this region. You should track these changes in the costs, skills, and risks, as well as assess whether the transport infrastructure is in place.
Your future customers may be located in areas near the Euro-Asian land bridge. This may require you to assess your product life cycle and tailor your supply chain to new markets
Alignment
Currently, there are significant misaligned interests between a host of NGOs and individual countries along the land bridge corridor. Necessary steps need taken on issues related to security/smuggling, costs, etc by the governments involved. A corporation will not be able to maximize its own interests until there is more cooperation with the other organizations in the supply chain.
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