As trade negotiations drag on between the U.S. and China, China still continues to be a focus for many logistics and transportation providers. The trans-Pacific lane has long been a highly competitive one but as tariffs and reduced demand for Chinese manufactured goods take a toll on rates and volumes, forwarders and transportation providers are looking to domestic China and other Chinese trade lanes for growth opportunities.
According to the China Federation of Logistics and Purchasing, China’s logistics sector posted a 6.4% year-on-year increase in 2018, with the value of goods carried at 283.1 trillion yuan (US$42.3 trillion). In comparison to 2017, this was down by 0.2%.
A move away from an export-dependent economy has been underway for a number of years as China looks to stimulate domestic growth, connect deeper with its Asian neighbors as manufacturing expansion opportunities grow in such countries as Vietnam, Malaysia and Thailand and to also reduce its trade dependency on the U.S which represented 18% of its total exports in 2018.
To address some of these changes, forwarders and carriers have introduced various services. Among these providers include the following:
GEODIS recently launched a full cargo service from Hong Kong (HKG) to Guadalajara, Mexico. According to GEODIS, HKG is its hub for China and Southeast Asia-originated cargoes to Mexico, Latin America, the U.S. and Europe. The service is expected to support expedited shipments of automotive parts from Asia including for lithium-ion batteries.
Time critical logistics firm time:matters expanded its presence in China by adding seven stations to its same-day air transport network. The move will allow the logistics firm to offer services to and from stations in Shanghai, Shenyang, Beijing, Nanjing, Qingdao, Chengdu and Guangzhou and will connect to large hubs in Europe and the U.S. Its newly created forwarding subsidiary, time:matters Shanghai International Freight Forwarding, will manage the operations.
DHL Global Forwarding is taking a multi-modal approach as it recently expanded its rail services between Asia and Europe as well as combined air and road in its Asiaconnect+ service. Introduced in 2011, the service originally connected Singapore, Malaysia and Thailand through road freight. Today, the service has expanded and includes air connecting Malaysia, Singapore, Thailand, Vietnam and China through a cross-border network.
SF Express introduced its Wuxi (WUX)-Chongqing (CKG)-Frankfurt Hahn (HHN)-WUX three-times-weekly scheduled flights, which expand upon the company’s goal to grow its international freight coverage to Europe. In the first 10 months of 2019, SF Airlines opened eight new intra-Asia destinations as well as Europe including the Chengdu-Inchon, Zhengzhou-Kuala Lumpur, Nanning-Ho Chi Minh and Shenzhen–Delhi route. With this network, SF Express enhanced its coverage to Southeast Asia, Central Asia and European countries.
In the past month, FedEx Express expanded its FedEx International First service by adding 14 APAC origin markets bringing the total to 25. Considered the fastest option within the FedEx international network, FedEx International First is a premium time-definite, customs-cleared and door-to-door express service with a pre-defined delivery commitment for shipments up to 68 kilograms per package.
FedEx also expanded its International Economy service destinations in Europe, opening 68 more lanes from APAC to Europe. FedEx International Economy service is described as an “affordable, cross-border, customs-cleared, door-to-door service with competitive delivery dates. The service allows customers to save on less time-sensitive deliveries without sacrificing reliability.” Karen Reddington, president, Asia-Pacific, FedEx Express commented, “Asia and Europe are now leading trade partners, with US$1.5 trillion of annual merchandise trade. The expansion of FedEx International Economy service destinations in Europe helps Asia-Pacific small- and medium-sized businesses who trade with Europe better capture global opportunities.”
Reddington further commented that “Asia-Pacific remains an engine of the global economy, powering the growth of global trade. The accelerated development of Asia-Pacific businesses has spurred increased need to reach global customers in a time-definite manner.”
Meanwhile, UPS reduced its time in transit with a guaranteed delivery date for its Worldwide Expedited service as well as time-definite deliveries for international shipments to 205 new postal codes in Indonesia, Korea and Taiwan and also reduced transit time by one day for businesses exporting from North Malaysia to Asia, Europe and the U.S.; from North Thailand to Europe and the U.S.; and from Asia to China with UPS Worldwide Expedited Saver service.
UPS also Expanded its UPS Marketplace Shipping to 101 Asian markets. According to UPS, UPS Marketplace Shipping offers businesses an automated way to process their e-marketplace orders by streamlining the order management and shipping processes.
“With service improvements such as guaranteed delivery timing and shorter transit time for UPS Worldwide Expedited, most businesses shipping within Asia will now have their shipments delivered in as little as two business days,” Ross McCullough, President, UPS Asia-Pacific Region, said. “This offers an end-to-end service alternative for freight forwarding shippers in the region looking for a scalable solution as they venture into new markets.”
Trade barriers, changes in manufacturing and consumer demands will usually result in shifts in trade lanes. The key for forwarders and carriers is to be proactive rather than reactive to such market changes so as to provide recommendations as well as the right solutions to customers at the right time without incurring unnecessary costs.
In addition, as more supply chain providers target the small-to-medium sized enterprises (SMEs), expect more service offerings specifically designed for this group. These services will likely involve not only the traditionally strong trade lanes such as trans-Pacific and trans-Atlantic, but also those within and connecting to emerging markets as these countries embrace e-commerce and technology offerings.Like This Post