Alternative Supply Chain Designs for Containerized Cargo from China to Peripheral Regions in Europe

The Asia-Europe container trade is second only to the trans-Pacific trade in terms of volume transported. In the typical structure of the supply chains associated with the Asia to Europe inbound container trade, containers are stuffed in China, and the cargo is subsequently cross-docked at a major European logistics hub or a distribution center closer to the customer for further distribution to the final retailing points. However, this solution may not be optimal from the perspective of total logistics cost and CO2 emissions. Upstream buyer consolidation at the origin and/or a downstream intermodal system at the destination have been regarded as potential solutions that improve the performance of supply chains under certain circumstances. The present research identifies new supply chain solutions in sea-based China-Europe cargo flows. Based on the identified new solutions, the performance of potential solutions in terms of logistics cost and CO2 emissions can be compared with those of more traditional solutions, thus revealing under which circumstances the new solutions may be preferable. The core of this research is based on case studies obtained from Scandinavian chain retailers as well as a large number of interviews with central actors in the China-Europe trades, with particular focus on cargo-flows destined for peripheral regions of Europe, represented by Scandinavia and Ireland. The findings suggest that the solutions characterized by upstream buyer consolidation and a downstream rail-based or maritime feeder-based systems may have positive impacts on logistics cost and CO2 emissions. The analysis suggests that such new solutions might be desirable as an alternative to the usual arrangements in this China-Europe container trade, in particular in situations where there are limited order quantities from each vendor, there are many different vendors located within a confined geographical region in China, where total order volumes are big enough from one region in China to achieve a sufficient utilization of consolidated containers, where cargo is characterized by small units which are not palletized, where the final retailing points are far from Central-European logistics hubs, and where the majority of the importers’ cargo-flow is sourced in China.