China inland transport suffers roadblocks
China may be a magnet for international shippers, but getting goods from the port areas to interior destinations still proves challenging.
“There is state-of-the-art service, but you have to pay a high price for it,” said Garland Chow, associate professor at the University of British Columbia, during a Council of Logistics Management meeting in Chicago.
Logistics costs for shipments to China range from 16 to 20 percent of the total cost, compared with 9 to 10 percent in the United States and Europe.
Chow told shipper attendees that road conditions in China are no longer the issue. The country is rife with transportation logistics breakdowns because of local protectionism, excessive tolls, a fragmented trucking sector, and use substandard road equipment.
China’s rail network is the second most popular transport mode in the country. “The system is heavily used because it’s cheap, not because of service,” he said.
China’s recent accession to the World Trade Organization promises change to China’s state-run rail sector, but Chow warned it would be a slow transition to a market-oriented intermodal business.