Latecomers warned of China¡¯s tough logistics sector

Larry Alberts, director of consultancy Oliver Wyman, a specialist in the surface transportation and energy sectors who advises companies on the Asian market and customer and business strategy, has given his view on China’s logistics market. And, if you are involved in any way with logistics in China it is worth clicking CargoNews Asia and reading the whole article.

He writes that a decade ago in China the problem with logistics was insufficient infrastructure, such as minimal available freight capacity on railroads.

As recently as a dozen years ago the geographic coverage of the railways was comparable to that of the US at the time of its civil war. Poor roads meant trucking was highly unreliable, and limited use of containers and poor warehouse conditions resulted in high rates of damage and loss to goods being handled.

Then he becomes more upbeat.

However, over the past 10 years there’s been huge investment and major improvement in infrastructure, quite visible in the roads and seaports, the expansion of the railway westward and the capacity upgrade on key trunk lines. In the 10th five-year plan, 6,000 km of railroad, 200,000 km of new roads, and more than 140 deep-water berths were planned and largely completed by 2006.

It goes on from there to give concrete advice on mergers and acquisitions and the essential due diligence. Well worth reading.