FEaTuRE Logistics
ROad
By Tulei
n a busy warehouse near the railway when the market is scattered with thousands that in Europe there are around 5000 reg-
I
station in Zhengzhou City, Henan of players, many that exhibit low efficiency istered companies providing road transport
Province, Fan Jinxing and six other rates and low levels of expertise. services and around 7000 to 8000 in the US.
workers have been loading big plas- Despite intimidating odds and numbers, This is compared to around 780,000 logistics
tic bags of cargo onto trucks since companies are still working to expand in this companies based in China. This means that
8am. This is a common daily scene mirrored bloodthirsty market. Some even think that the competition in China between different
all down South Shuncheng Street where the opportunity for road delivery has come players is cutthroat and the logistics sector
about 20 logistics companies of different as the financial downturn forces many com- has often been accused of “disorganized
sizes are closely crammed together on 500 panies to give up local air transport due to competition.”
meters of road. “Each day, we load at least high costs. Mui- Fong Goh, general manager “Normally, we charge less than RMB10
two trucks,” said Peng Shimeng, a small-time of A.T. Kearney, Beijing a US-based consult- ($1.46) for one piece from Zhengzhou to
logistics boss who has worked in the busi- ing company says that the road transporta- Xinxiang, less than 100 kilometers distance,”
ness for eight years. “Most of them run to tion market in China reached $265 billion as said Peng, adding that the price is lower than
other parts of the province by the next day, of 2008, and there are plenty of players who other big players. His smaller business em-
and some to Shandong Province every other want a piece of the action. ploys about 100 people and uses 20 trucks,
day.” all rented. However, TNT-Hoau and DP
Road transport in China is big business Driving competition Express, two large players with business
and currently occupies a majority of trans- When it comes to their business, charge around China, are able to charge RMB100
port volume in the country. According to the rates are the defining competitive factor , ($14.65) and RMB60 ($8.79) per cubic meter
Ministry of Transport, the 2008 road freight especially in this sensitive market where it is of goods, respectively, for the same distance
volume was 19.17 billion tons, accounting hard to unify prices due to a variety of opera- from Zhengzhou to Xinxiang. “Along our
for 73% of the country’s comprehensive tors with different levels of service and exper- logistics street, most small operators charge
transport system. However, the nation’s road tise. Xu Shuibo, CEO of TNT-HoauXu said similar prices, with fluctuations of RMB1-2
networks still has a long way to go, especially in the logistics meeting held in Zhengzhou ($0.15 or $0.30) for more or less for the same
44 MARCH/APRIL 2010 www.supplychains.com
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