The rise of the 3PL
China's OEMs have typically relied on their own captive logistics arms. Efficiencies have risen, but logistics is a specialist activity not typically a core competence of an OEM.
So China is expected a move towards the model, typical in the rest of the world, of using 3PLs. And even where a logistics operation is retained by the OEM, that operation is likely (in a selective way) to seek external customers.
These and other themes will be the focus of the 7th Automotive Logistics China conference. Bringing together carmakers and logistics service providers of all types, it is the proven forum for gaining introductions and doing business in what will become the world's largest auto market.
| SPECIAL CO-OPERATION FOR 2010 Finished vehicle logistics sessions |  |
Automotive Logistics has teamed with the China Federation of Logistics and Purchasing (CFLP) to organise special sessions on finished vehicle logistics, which run throughout Day 2 of the conference. This incorporates the previously-separate meeting arranged directly by the CFLP. There is a one-day delegate rate for China-based attendees to attend these sessions, and a further discount for delegates from companies which are CFLP members.
Reasons to attend recommendations from past attendees | - Hear presentations from expert speakers and listen to case studies from your peers about their achievements.
- Learn the latest structures and techniques explained by LSPs.
- Meet new logistics partners, suppliers and clients who are seeking the opportunities to do business better.
- Understand the latest government, regional, infrastructure and regulatory developments.
- Get a fresh perspective - and extend your personal network - for solving long-standing problems.
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'Sluggish and inefficient' cannot deliver the Chinese dream
Feedback at the 2009 Automotive Logistics China conference left little doubt that China is the true land of opportunity for the automotive industry and its suppliers during the global recession. Carmakers and tier ones such as FAW Group, Dongfeng, Geely and Magna called for expanded logistics services including milkruns and railway transport.
But delegates to the conference, held from 20-22 April in Shanghai, heard that the logistics sector remains fractured into small players often owned by domestic OEMs and, partly as a result, is perceived as sluggish and inefficient. Global LSPs, meanwhile, have yet to penetrate the Chinese automotive market in a substantial way.
| Spurred by government incentives, Chinese domestic car sales grew around 3% in the first quarter of 2009, reaching a record 2.68m sales and 2.57m in production, outpacing the US as the world's largest new car market. And the demand for logistics services remained steady - a survey at the conference revealed that 55% of respondents saw the current market prompting increased levels of logistics and supply chain outsourcing. But while the market is buoyant compared to Europe or the US, the automotive logistics industry has still been severely impacted in China by the financial crisis. Firstly, car sales growth is modest by Chinese standards. | |
And according to government official Wei Yong, Division Chief for Transport and Logistics at the National Development and Reform Commission, the growth in the logistics sector declined by 30% this year, with 60% of logistics companies experiencing a contraction. Port throughput is significantly down, following the drop in exports. Richard Ma, from the Port of Tianjin, told Automotive Logistics that car volumes were down around 50% at that port to 30,000 units through the first two months of the year.
The Chinese government incentive programmes have helped, however. Sales tax has been halved for smaller cars - raising sales more than 20% in this segment. The government has also unveiled a plan to help the logistics industry with infrastructure developments, special logistics zones and multimodal transport. But Mr Wei offered few details and little about the timing of the strategy.