If you’ve ruled out China for manufacturing because of long shipping lead times – it might be time to rethink! The China Express, the world’s longest railway route, is opening up smarter, cheaper, faster and more environmentally friendly freight for European businesses who manufacture in China.
Companies like Porsche are already reaping the benefits of the express rail service, cutting lead times by 3 weeks, shipping twice weekly to China by train. LeanPie are also leading the way, working directly with every stage of the supply chain in China (and beyond!) to bring lean thinking and transparency into the mix for UK and European businesses.
As the trade war between the US and China hots up, the links between China and the UK and Europe are tightening. Trade has been steadily increasing, up by 7.6% in the last twelve years, a trend which looks set to continue.
The UN estimates that European countries could stand to benefit from an extra $70billion in trade which traditionally would have passed between the US and China.
There’s lots of reasons why using China for manufacturing can mean cost-savings for businesses. With low material costs, a skilled workforce and high service levels, the speed and low cost of production in China can represent real value for businesses. But until recently, the shipping times have meant it’s simply not an option for some businesses.
A difficult choice
Dealing with China used to mean choosing between low cost production and fast delivery. Sea-freight from China to Europe can take up to 40 days – prohibitively slow for some.
The new rail freight options with the China Express open up exciting cost effective shipping possibilities for UK and European businesses. Falling between sea and air freight, the costs (around $0.60 per kg) and speed of supply mean that the true cost of manufacturing in China is kept low whilst still achieving 18 to 21 day lead times on deliveries. Experience tells us that out of the 12 day gap between shipping from China and Eastern Europe, 7 can be recovered immediately in much faster set up times in China, narrowing the gap even further.
How to take advantage of faster lead times from China
It’s all very well knowing that faster lead times are possible, but for lots of businesses who don’t have experience dealing with Chinese factories, realising these cost savings can be a difficult and confusing process.
LeanPie deal directly with many factories in China, and with in-depth knowledge of markets, pricing, materials costs and supply chains, we are perfectly positioned to bring lean manufacturing to your organisation using the China Express railway.
If you’re interested to find out how we can help your business achieve cost savings through our lean and transparent supply chain sourcing, get in touch today for a chat about what we can do for you.