Succeeding in the post WTO China logistics market.
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The WTO opens the following areas to foreign investment
as of Dec. 5th, 2005:
• Freight Forwarding
• Rail Freight
• Warehousing
• International Express
• Domestic Express
• Trucking
The following will help foreign companies get a foothold
in the ever changing and growing China market:
• Proper Representation: Whether working with
an agent or your own representative office in China,
having at least one employee stationed in China that
knows your US staff and understands what customer requirements
are often makes the difference. Companies often forget
that good communication comes at a premium and the successful
business will address avoidable service failures in
advance.
• Audit Locations & Operational Assets: In
selecting and working with offices or service partners
in China, one must pay due attention to where the partner
is located and if their location, facility and scale
can properly service operational requirements. Too often
US logistics companies find their China service partners
may subcontract to multiple agents, which who they have
varying levels of control and dependability. If warehousing
is required, then on-sight inspections are a must since
most warehouse facilities lack standard safety and material
handling equipment.
• Monitor Performance Levels Closely: Service
Providers in China suffer high rates of turnover in
staff and with them may experience wide fluctuations
in operational competencies for customs clearance, space
booking, cartage administration and warehousing. If
you see the beginnings of service deterioration, be
sure to work with the provider to find immediate resolution
and reduce shipment volumes to levels the provider can
manage. Since recruiting, training and rebuilding operations
departments take time, waiting for improvements may
take longer than service providers are willing to admit.
US logistics companies should always have strong alternate
providers ready to pick up the slack if needed.
• Determination Pays Off: As the saying goes,
“in China, everything is possible but nothing
is easy.” Do not assume that operations standards
and normal solutions that work in the US or elsewhere
can be applied to China. China service providers themselves
may not be fully aware of government regulations that
frequently change without notice. Personal relationships
play a very important role in resolving conflicts as
well as avoiding them. Be prepared to spend more time
double checking through multiple information sources
before arriving at conclusions and making decisions.
As elsewhere, perseverance and networking within the
industry pays off.
