Supply Chain Solutions to Upstream Buyer Consolidation with Green and Resilient Supply Chain Designs in the China-Europe Containerized Cargo Flows

The Asia-Europe container trade is second only to the Transpacific trade in the world in terms of volumes transported. The typical structure of the supply chains associated with this trade is that containers are stuffed in China and the cargo is subsequently cross-docked at a major European logistics hub or closer to the customer for further shipment to the final retailing point. This may be one of the reasons why short sea container shipping has only a limited market share of intra-European cargo flows, since once the cargo is unloaded from containers, it is more likely to be forwarded by land-based modes of transport. Paving the way for a greater proportion of cargo to be cross-docked in China rather than in Europe, may prove to be more cost-efficient and less environmentally damaging than the typical solution. Based on interviews with central actors on the Chinese and European side of the supply chains, this chapter discusses the strengths and weaknesses of the typical solution and alternative solutions such as upstream buyer consolidation. Ultimately, a realization of the potentials related to a shift from the typical design of these supply chains to new alternatives, is dependent on an identification of key decision makers and their gains and losses related to the various solutions. The main decisions related to the design of the supply chains under the alternative solutions seem to be on the European side. Therefore, most shipments of consumer goods from China to Europe seem to be bought with FOB-type of terms. It also seems that European or global LSPs interact with buyers in the design of the supply chains, and that the disadvantages of Chinese LSPs in international logistics network and relations with potential European customers limit their role in this respect. Cost efficiency, lead times, agility and environmental performance of the alternative supply chain design is central to the choice of designs, as is an assessment of potential risks related to the China-Europe container trades. Recent disruptions related to carrier financial robustness has put the issue of building up a resilient supply chains a key issue, which is also relevant in this setting.