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How China Has Taken over the Logistics Industry
As a communist nation, it would appear odd that China would embrace the market economy, but it has. What the global superpower lacks in experience, knowledge, and production (as least when compared to more experienced nations like America), it makes up for in wealth.
China is buying its way into the logistics industry, especially the automotive industry.
It was only a matter of time. With over 1 Billion residents, China needed to develop stellar logistics and supply chain practices in order to feed and provide for its citizens.
Having done that, it is natural that China would look outward and attempt to take over a significant market share of foreign markets. By virtue of its fragmented logistics market, the nation can spread itself thin in terms of geographic coverage, without jeopardizing the industry as a whole.
Chinese Logistics Companies Embrace Big Data
All around the world, companies are slowly waking up to the immense value that data plays. From being able to research competitors to creating databases on the automobile exports and import industry, sifting through data can help you make your logistics operations more efficient, and more profitable.
China understands this. China Auto Logistics embraced the use of data in 2015 when it “[began] to develop an advanced database aimed at capturing all available information on ‘the parallel imported vehicle’ industry in China.”
What a company can do nationally, they can do internationally. It will not be a surprise if, within the next 5-10 years, logistics companies that follow China Auto Logistics’ lead come out ahead of the competition.
Chinese Logistics is Still in a Developmental Process
Chinese logistics companies are fighting for market dominance in a market they did not create. They’re “hungry.” The willingness to succeed, and the passion required to develop the discipline to succeed, are paramount, regardless of the industry.
A company must never lose sight of its vision and goals. This applies to both new companies, and companies that grow over time.
For a recent example, consider Apple. Historically, Apple has been known as a supplier of premium software and hardware. Apple devices were meant for “professionals.” You did not have to install anything like driver disks, or worry about core software compatibility. Everything just “worked.” Recently, Apple has made some questionable decisions regarding its downgrading of computer ports, as well as detached headphones (earphones).
While the focus is still on offering premium devices, Apple is marketing to a younger crowd, rather than the same professionals that have used their products for decades. The result is that Apple has reduced its focus on “out of the box” functionality, and relied on technological superiority and innovation as a market leader and influencer.
Lessons We Can Learn
Chinese products, like the Huawei are now catching up, and may replace Apple if the latter is not careful. The same is true for the automotive logistics industry. American logistics companies may hold the advantage now, but they will need to continue holding it, if they do not want China to take over.
The American economy has always thrived on the idea that it is bigger, better, and far more advanced. But, is this something that we can claim anymore? The rise of China has seen them takeover manufacturing, their technology continues to improve rapidly, and they are challenging the American logistics industry like never before.
The simplest way to do so is through “pain” and “gain.” When it comes to logistics, either alleviate a client’s “pain” (or logistical problem), or provide a client with “gain” (provide them with a logistical solution). Chinese logistics companies want to do better, every company does. If we are not careful to continue providing market needs, we will be left behind.