Russel Beron in Cargo News Asia reports on a recent Shanghai conference on automotive logistics which showed this sector faces similar issues to the rest of China’s logistics industry.
If projected growth materialises, the logistics framework — both within China and between China and world markets — will need to catch up quickly to match global standards. China still faces huge logistics challenges. While the government has built an extensive highway network in just 15 years, transportation delays are still common due to a lack of sophisticated technology, regulatory barriers and human resource shortages.
In China — depending which estimate you rely on — logistics costs are significantly higher than in North America and Europe. Fred Raub, GM supply chain director, said that in a part for part comparison, the logistics cost in the United States is three to four per cent while in Asia it is 10 to 15 per cent. The result is that, ‘Sometimes parts aren’t sourced in Asia because the logistics cost is too high’.
One obstacle in automotive logistics is the skills gap — the sector is not attractive to bright and ambitious individuals. Companies need to create initiatives to attract talented Chinese workers to the sector and help them build their careers.
Source: Cargo News Asia.
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