Kerry Logistics — Paving the New Silk Road

Abstract

China’s logistics spending was roughly 14.5% of its GDP, higher than other developing countries like India and South Africa. With economic growth slowing, there was a need for more efficient logistics systems to move production resources at lower costs so that Chinese firms could remain competitive. Kerry Logistics, a third party logistics service provider, had grown rapidly in China and by now had established business centres in 32 provinces. Although it had many foreign clients who wanted to move goods in and out of China, it had difficulty gaining the trust of local clients who wanted a logistics firm with extensive local network. Kerry also wanted a share of the booming e-commerce delivery business but the market situation here was chaotic, unregulated and in a cut-throat price war. As its business was trade driven, there was an urgency to start extending its network along China’s “Belt and Road” initiative.