Publication: Customer-driven Rail Intermodal Logistics: Unlocking a New Source of Value for China
Date
2015-03
ISSN
Published
2015-03
Author(s)
Abstract
Rail intermodal logistics, the movement
of containerized cargo from origin to destination where a
portion of the journey takes place on rail, have gained
significance in North America over the past 10 to 15 years
based on cost and operational efficiency. In China, however,
the story has thus far been different. Considering the
length-of-haul and commodity characteristics of China s
manufacturing sector, the country has a persistently low
incidence of rail intermodal participation in domestic and
international supply chains. We find that the binding
constraints behind the low incidence of rail intermodal
services in China are most likely to be found on the supply
side, not the demand side of the equation. Specifically, the
regulatory and institutional environment, which regulate
freight tariffs and provides little or no flexibility for
China Railway Corporation (CRC) to tailor services to
customer needs, is at the root of this challenge. This note
outlines the success of railways in North America in (a)
tailoring rail intermodal service offerings based on
customer needs and willingness to pay; and (b) collaborating
with other logistics service providers so as to concentrate
on their core (rail transportation) competency, while
leaving other segments of the end-to-end intermodal supply
chain to those most efficient in those segments. The current
policy and economic environment facing CRC seems favorable
to pursuing reforms towards adopting similar practices.
Citation
“Blancas, Luis C.; Ollivier, Gerald; Bullock, Richard. 2015. Customer-driven Rail Intermodal Logistics : Unlocking a New Source of Value for China. China transport topics;no. 12. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/21677 License: CC BY 3.0 IGO.”