The Beijing Olympics marked the debut of modern Chinese culture on the global business stage. Global press coverage of the international sporting event raised awareness of the new realities of Chinese life: large cities, environmental challenges, and newly affluent consumers. Despite experiencing the effects of the global economic slowdown, Chinas economy still holds promise both for manufacturers and for marketers. Third party logistics companies can help clients get past the gatekeepers and into the homes of Chinese buyers.

According to one recent report, logistics costs account for up to one fifth of the Chinese gross domestic product. Navigating Chinese bureaucracy as a buyer of wholesale goods has challenged import/export experts for decades. Selling to the Chinese market is even tougher. Therefore, many companies now rely on third party logistics companies to transact business in this exciting economy. Although some global logistics providers tout their presence in China, a new breed of highly specialized 3PL experts has emerged to serve the needs of international businesses.

Advantages of Using Third Party Logistics Services in China
Even companies with their own internal logistics operations have admitted defeat when it comes to cracking the Chinese market. According to industry analysts, third party logistics companies provide highly specialized knowledge and experience that cant always be duplicated in-house. Specific benefits of Chinese-based third party logistics providers include:

• No language barrier. Native speakers can help build relationships and trust with business partners and with government officials.
• Fast passage through Customs. Partnering with a local firm can help clients speed through initial reviews and ongoing inspections.
• Key market insight. Just as third party logistics companies in the United States leverage locations and technology, strong Chinese 3PL vendors help clients with distribution and roll-out strategies.

Local presence makes a major difference for companies trying to do business in China. Although costs for experienced, local, logistics companies may seem prohibitive at first, experts note that an investment in sound partnership can mean the difference between long term success and a fast failure.

What to Look for in a Chinese Third Party Logistics Provider
Because of high demand for effective Chinese logistics companies, the field of prospective vendors has been flooded with hungry newcomers as well as fly-by-night businesses and outright scammers. Industry analysts recommend requesting information only from prospective vendors that share four critical traits:

• Verifiable track record. Legitimate, experienced logistics companies maintain an online presence in both Chinese and English. Trusted vendors offer both testimonials and third-party audits of their results.
• Consistent customer service. The most successful 3PLs in China maintain the same high standards at their field operations centers as they do in the home office.
• Strong ethical standards. Bribery and corruption still run rampant in some Chinese business communities.
• Reliable tracking and auditing. A strong third party logistics provider can account for all inventory and intellectual property throughout their relationship with a customer.

Although third party logistics providers can handle most tasks, global business consultants often recommend that their clients maintain a physical presence within China. This way, local staff can prevent miscommunications from turning into disasters. Likewise, clients can use site visits and local offices to ensure compliance with brand and product standards. With help from 3PL companies, growing a business behind the Great Wall can be productive and profitable.

Sources

3PL Wire

Logistics Management

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