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Contract manufacturing
Logistics inside of Europe - substantial source of competitive advantage

Logistics inside of Europe – substantial source of competitive advantage

Long delivery times, a significant amount of funds that need to be frozen in products, communication problems with the supplier and administrative solutions that are far from European standards

Logistics inside of Europe: Poland vs China

These are just some of the disadvantages of importing goods from China. It is time to recall which things entrepreneur should consider when choosing Asian logistics solutions and whether there is a viable alternative for him.

The problem with choosing a profitable form of delivery

The delivery process from China to Poland is long and complex. A minimum of 6 weeks and 12-14 thousand zł for one container – this is the time and cost that the entrepreneur must pay for the popular maritime form of transport. When it comes to air transport, which is characteristic for smaller scale operations, the time is decreasing (up to about 2 weeks) and the fees are disproportionately increasing. In addition, at the destination airport you need to hire customs agency that will prepare the necessary documents, collect the goods and deliver them directly to the recipient. The rail transport developed under the New Silk Road has recently gained in importance. It is faster than a ship and cheaper than an airplane, but by faster we still mean about 40-50 days, and we compare prices to the most expensive form of delivery.

No matter which mean of transport we choose, the parcel is serviced by dozens of entities in different countries, which makes their organization a challenge even for powerful market players. For smaller enterprises such a process may turn out to be simply too complicated, which means that they usually decide to generate new expenses, shipping companies.

Hidden fees and barriers

Entrepreneurs taking into account import from Asia should bear in mind that the way their goods have to travel is not only transport from point A to point B. In addition to the trip itself, customs and additional charges are imposed on companies in the case of cross-border logistics (i.a. China Inspection and Quarantine Bureau). Transport companies are treated according to diversified categories of VAT, rates and complicated exemptions, which increases the price of the service and consequently, the costs incurred by entrepreneurs. Logistics companies are also subject to intense control by the administration, inter alia, by inspection of the cargo contents or the need to install monitoring at the client’s expense.

Chinese climate for the IT industry

Chinese regulations in the IT technology sector differ significantly from global standards. On the foreign entrepreneurs side, this generates high costs associated with the need to adapt the service to the Asian market. Restrictions in access to websites make it necessary to look for own sources of needed pieces of information, which in practice may prove to be extremely difficult and time-consuming. It should not be forgotten that when goods reach our hands, in the case of mass transit, a significant part of them may have defects and damages that require the customer to sort them at the arrival. It also happens that during the certification process, local units require disclosure of information about the device details, which under European conditions would be a company secret protected by intellectual property rights. Therefore, there is a risk of obtaining key information concerning a given product and company by competing entities.

Poland or the center of Europe

The central location of Poland on Old Continent’s map is one of the arguments that mostly appeal to European entrepreneurs who own production near the Vistula River. Efficient logistics is added value that is one of the strongest competitiveness elements. Lack of obstacles and proximity to key markets in this region creates the opportunity to reduce costs and improve deliveries, whose pace gains more and more importance for client. The cooperation critter between the client and supplier determines also the need for efficient communication in current affairs and service. This thing is natural in the Polish region and in the China context almost impossible to implement. Talking about transport from Asia, it becomes a problem to fulfill basic consumer rights, such as guarantee assumptions made on time, access to products or the ability to quickly and cheaply transfer them to clients.

Poland or the center of Europe

Choosing production place is for entrepreneurs one of the keys to gain market advantage. Among other things, hence the idea of production in China and Asian countries, which is intended to reduce costs and expand the company’s operations. However, the problem arises when the goods have to be transported to the European client or customer. Time, fees, complicated administrative standards and lack of communication with the supplier. It is worth considering the choice between relatively cheap production and the issue of efficient logistics, which has recently gained importance like no other competitor’s factor.

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Krzysztof Jakubczak

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