Reconstruction of global supply chain in the epidemic era and changes in demand for low-cost logistics in China

1. Impact of the epidemic on the global supply chain and reconstruction trend

Prioritize supply chain resilience: The epidemic exposed the vulnerability of the global “just-in-time” (JIT) supply chain. Enterprises began to shift from efficiency priority to “resilience priority”, promoting regionalization, diversification and nearshoring of supply chains.

Rebalancing of costs and risks: The superposition of geopolitical factors (such as Sino-US decoupling) and energy crisis has prompted enterprises to re-evaluate the weight of “low cost” and “fast timeliness”. Some industries may sacrifice timeliness to reduce risks.

2. Changes in international logistics demand: from “fast timeliness” to “low cost”?

Short-term fluctuations and long-term differentiation:

High value-added goods (such as electronic products and medicines): still rely on air transport and fast logistics, and timeliness requirements are rigid.

Commodities and durable goods (such as furniture and clothing): The proportion of low-cost logistics such as sea and rail has increased, and enterprises are more inclined to reduce costs by extending the inventory preparation cycle.

Inventory strategy adjustment: enterprises increase “safety inventory”, reduce sensitivity to transportation timeliness, and demand for cost-effective routes such as China-Europe Express increases.

3. Advantages and challenges of China’s low-cost logistics

Advantages:

Improved infrastructure: China has 7 of the world’s top 10 ports, with significant advantages in shipping costs; China-Europe Express (17,000 trains to be launched in 2023) provides an alternative to land transportation.

Scale effect: China’s manufacturing clusters reduce unit logistics costs, and cross-border e-commerce (such as SHEIN and Temu) rely on low-cost logistics to expand overseas markets.

Challenges:

Regional supply chain diversion demand: The rise of near-shore manufacturing in Southeast Asia, Mexico, etc. has weakened China’s total export logistics volume.

Green barriers: The EU carbon tariff (CBAM) may push up traditional shipping costs and force China’s logistics to transform into a low-carbon one.

4. Key industry cases

Cross-border e-commerce: Temu, AliExpress and other platforms occupy the market through the “affordable free shipping” strategy, relying on the extremely low-cost model of China Post and sea freight LCL.

Automotive industry chain: BYD and other automakers transport electric vehicles through the China-Europe Express, which is 30 days faster than sea transport and costs only 1/4 of air transport, reflecting the balance of “cost performance”.

5. Future trends and suggestions

Layered logistics network: high time efficiency (air transport/China-Europe Express) and low cost (sea transport) are parallel, and enterprises choose according to product characteristics.

Digital cost reduction: AI optimizes freight routes (such as Maersk uses AI to reduce carbon emissions by 15%), and blockchain improves customs clearance efficiency.

Policy window period: China needs to consolidate RCEP regional logistics cooperation to hedge the impact of “de-risking” of European and American supply chains.

Conclusion

International logistics demand is not a one-way shift to “low cost”, but a “pyramid differentiation” in the reconstruction of resilience: high time efficiency at the top, low cost at the bottom, and seeking balance in the middle. China’s logistics industry needs to take “low cost + controllable time efficiency” as its core competitiveness, and at the same time respond to the challenges of new trade rules through greening and digitalization.