Study Of The Strategic Transformation Of China's Freight Forwarding Business

A freight forwarder is an organizer and planner of international transportation. freight forwarding has become a new service industry in China with the development of its foreign trade since the country's reform and opening policy two decades ago. But on the whole, it is still a growing industry in its small size and a low level of specialization.Corporate strategy is simply defined as a process which a corporation applies certain resources to attain certain goals under certain environment. At present, the internal and external environment of freight forwarders has been dramatically changing, which will impact greatly on its management and development. Under such circumstances, a candid research as how to determine corporate strategy and gain competitive advantages has both theoretical and practice significance for freight forwarders.Economic globalization, China's joining WTO and logistics industry development will bring about significant influence on forwarding industry. After China's accession to WTO, on the one hand, the dramatic increase in the volume of import and export will expand the vast demand for forwarding service, thus will broaden the potential opportunity for its development. On the other hand, market liberalization will definitely usher in a large number of potential strong competitors. Meanwhile, as a result of economic globalization ,internal trade and investment among transnational corporations (TNCs) has added up to 2/3 of the total volume of the world trade and investment, which these consignment will likely to be undertaken or carried on FOB terms by the global leading integrated logistics providers . In views of networks and functions, only large-sized enterprises such as SINOTRANS, COSCO are in a position to transform traditional business to "Third Party Logistics" (TPL), it is very hard for quite a number of small and medium-sized forwarders to gain the market share from the increasing forwarding and logistics service. Taking all these into considerations, it's a trend that TNCs will dominate the market and the domestic forwarders will have to breakup, integrate, divest and conglomerate.Upon above analyses and the industry situation, we can make conclusions that the freight forwarders must adjust and reconstruct the business strategies . they are directed on the five interdependent strategies: scale operation, specialization service, developing logistics, cultivating the extensive network and strategy alliance. Large freight forwarders will have to integrate and allot resources and make strategy alliance with their foreign counterparts so as to gain a firm foothold in the position of TPL suppliers. The tunnel light for small and medium-sized forwarders would be aiming for segmented specialization and unique features.The thesis is also discussed on how to implement the above-mentioned strategy. First of above, favorable conditions are created including reforming the administrative system, standardizing the business order, transforming the organization and renewing the marketing concept . On the next , combination with the detailed cases, the author lay emphasis on the thinking and ways of scale operation , specialization service and developing modern logistics...