For decades, Militzer & Münch has been operating in numerous countries along the New Silk Road, with mainly the logistics market in China posing a big challenge. For cultural reasons, decision processes follow a different pattern than in Europe. Militzer & Münch commissioned the University of Applied Sciences in St. Gallen to draw up a logistics market study on the Belt and Road Initiative (BRI).
Decision processes at Chinese top management levels are highly complex. The results of the analysis are intended to allow progress not only in China, but to help continue operating successfully along the New Silk Road — and are equally interesting for other logistics companies on the Europe-China trade lane.
A key finding: 80 percent of the logistics orders in China in connection with the Belt and Road Initiative are awarded to Chinese firms. There is little chance for European logistics companies in China directly — opportunities present themselves mainly in countries where China is not or just minimally active. Trust, built over long years of relationships and partnerships, is the most important factor for a contract to be awarded in China.
For logistics service providers, operating local branch offices is essential to successfully build relationships. Having local management or local partners — especially with Chinese State-owned Enterprises (SOEs) or companies closely networked with SOEs — is the best way to understand cultural differences.
The analysis also revealed that the Middle East is the region with the highest BRI investments (43 percent), followed by South East Asia and Russia. These findings confirm Militzer & Münch’s strategy of increasingly operating in these regions via own country units.
The market study was conducted by a project team from the St. Gallen University of Applied Sciences and Shanghai University, based on an alleged investment sum of 1.067 trillion USD and 420 BRI projects.