Change in Chinese customs regulations to help streamline global retail supply chains

Change in Chinese customs regulations to help streamline global retail supply chains

FMCG SUPPLIER NEWS

ProcurementLeaders.com - Jan 23rd, 08:13

Moves by local government authorities in China to relax customs procedures will help global retail companies to streamline their supply chains, logistics experts predict.
 

The moves will make it viable for retailers in regions including the US and Europe to cut back established distribution centres close to their outlets and instead relocate sorting work to China, it is believed.

A group of logistics industry professionals have told the Financial Times that the relaxation of customs procedures in southern China and around Shanghai is prompting overseas companies to outsource increasing levels of sorting functions to so-called "bonded logistics parks" in China.

According to the Financial Times report, these tightly guarded warehouse parks give firms far more flexibility to hold goods for long periods, than they had under previous Chinese customs rules. It added that there are fewer restrictions covering bringing merchandise to and from the new facilities, and tax incentives can be claimed earlier by the retailers using them.

"As a result, growing numbers of containers leave Chinese ports packed with goods in the precise quantities and orders required at stores in their destination countries, often with price tags already attached and ready to go straight on display. The containers often go straight from destination country ports to stores, rather than the distribution centres that traditionally hold and sort goods," the FT reported.

Bruno Sidler, chief operating officer for Ceva Logistics, the Netherlands-based logistics provider, told the FT that Chinese provinces were effectively in competition against each other to secure foreign business with such facilities.

"Nowadays we have customs rules in China which are as liberal as any free-trade zone in Europe or anywhere else," Sidler said.

"Then it becomes much, much easier to run such operations."