to see that their outbound logistics had negative profits, and only a 3–4 % profit
margin for their inbound logistics and line-feeding operations.
High toll payments contributed most to their negative profit in outbound
logistics. Actually, company B has a decision support system to schedule outbound
logistics resulting in almost no waste in truck capacity. This fact reveals just how
greatly the high toll payments have affected the survival of 3PLs. Another point we
have learned from Company B is that Chinese firms are not so willing to outsource
their logistics. Company B’s main customers (i.e., car manufacturers) actually own
a significant share of this 3PL. We found out that Company B did try, unsuccessfully,
to extend its business to other customers during the past 10 years.
Moreover, Company B owns a berth for exporting cars overseas. They have a good
land-sea arrangement for multimodal transportation, with a warehouse in a free
trade zone near that berth.