The barriers to entry into the Chinese logistics industry are high. On the one hand, China implements protectionist laws to aid government-run logistics companies. On the other hand, due to the fierce competition on the Chinese market, profit margins for private companies are very tight. Under these conditions, private logistics companies must reposition the quality and scope of their services according to individual client needs.
Because the cost of labor is low in China, investments in IT are often not on the agenda. It is simply cheaper to continue to do certain jobs manually. Companies such as AKL, which are investing in these technologies, must convince their clients of the benefits of supply chain innovation in China – despite the additional costs.
Free download: Read the complete article in SAP SPECTRUM Issue 1 | 2011.