Potential solutions to upstream buyer consolidation in the China-Europe container trades : An exploratory study

The Asia-Europe container trade is the most important trade in the world in terms of volumes transported (overtaking the Trans-Pacific trade in 2014). The typical structure of the supply chains associated with this trade is that containers are stuffed in China and the cargo is subsequently cross-docked at a major European logistics hub or closer to the customer, for further shipment to the final retailing point. This may be one of the reasons why short sea container shipping has only a limited market share of intra-European cargo flows, since once the cargo is unloaded from containers, it is more likely to be forwarded by land-based modes of transport. Paving the way for a greater proportion of cargo being cross-docked in China rather than Europe, may prove to be more cost-efficient and less environmentally damaging than the typical solution. This paper discusses the strengths and weaknesses of the typical solution and alternative solutions such as buyers' consolidation and concludes that new alternative solutions are worth investigating further. The potential for shifting from the typical solution to new alternatives is dependent on the identification of key decision makers in the design of these supply chains. As such, a careful analysis of this must be undertaken and the capability of Logistics service providers (LSPs) in China assessed.