M&M: Growing significance of China’s decision makers in logistics

In China, Chinese enterprises are contracted for 80 per cent of logistics services within the Belt and Road Initiative (BRI)

M&M: Growing significance of China’s decision makers in logistics

The Militzer & Münch Group has analysed and iluminated the logistics market along the New Silk Road, with the objective to get a deeper insight into the decision processes of logistics projects in China, and to determine the share logistics services have in the Belt and Road Initiative (BRI).   

The logistics provider was able to observe, that there is currently a shift of decision makers in the global logistics market. “Today, logistics is mostly decided upon in Europe and the U.S.”, says Dr. Lothar Thoma, CEO M&M Militzer & Münch International Holding AG. “In the future, these decisions will increasingly be made in China, as big Chinese enterprises are gradually conquering the world market and developing their own supply chains.” 

In China, 80 per cent of logistics contracts within the framework of BRI are awarded to Chinese enterprises. “There is little chance for European logistics companies in China directly – opportunities can be found partifularly in those countries where China is not yet or scarcely operating”, says Dr. Lothar Thoma. “We seize these opportunities in Kazakhstan and in Central Asia, for instance.” 

To be awarded a contract in China, some peculiarities apply: among others, a ten-percent down-payment on the contract sum has to be made, the share capital of the logistician is reviewed, as are his business reports and his credit rating. The size of the company and the cost of the service are taken into account, too. Another important factor in China is trust in the logistics services provider, which grows from long years of relationship and partnership.

Among others, developing partnerships with state-owned enterprises in China or with Chinese enterprises that are networked with state-owned entities is crucial here. Also helpful when developing business relations is when third parties are involved, for instance when Chinese enterprises outsource their logistics.  


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