DHL Global Forwarding Releases White Paper ‘China Plus X’

DHL Global Forwarding has released a white paper titled ‘China Plus X: The New Global Supply Chain’. The report highlights the growing importance of multi-shoring strategies that go beyond the classic ‘China Plus 1’ approach and focus on diversifying production and sourcing locations across multiple countries. This way, companies can make their supply chains more resilient to global disruptions and strengthen their operational flexibility.

(Bonn) In recent years, geopolitical tensions, trade barriers, and events such as the COVID-19 pandemic have made it clear how fragile supply chains can be. The white paper highlights several countries in Southeast Asia, Southern and Eastern Europe, as well as the Middle East and South America as potential strategic alternatives and complements to China. These countries are not only investing in their infrastructure but also offer an increasingly trade-friendly regulatory environment.

“The future of global supply chains lies in a flexible, sustainable, and diversified structure designed for resilience. DHL Global Forwarding supports companies with a unique global network and local expertise to successfully navigate this transformation. With our extensive portfolio of logistics and transport solutions, we provide our customers with the tools they need to realize their ‘Plus X’ strategy and focus on long-term stability,” explains Niki Frank, CEO of DHL Global Forwarding Asia Pacific.

Five Key Factors for Successfully Implementing a ‘Plus X’ Strategy

The white paper outlines five essential criteria that play a crucial role in selecting suitable production and supply chain locations. A robust transportation infrastructure is critical as it encompasses the capacity, quality, and transit times essential for efficient logistics. Countries like Vietnam and Mexico are significantly investing in their transport networks, which form the backbone of their supply chains. Additionally, a comprehensive analysis of the cost structure is essential; this includes evaluating logistics costs, labor costs, and the overall return on investment (ROI) associated with relocating production to a specific country. Similarly, the quality of a country’s infrastructure—both digital and physical—plays a crucial role in this assessment. This involves aspects such as broadband capacity, available transport facilities, and expected developments like new airports or rail lines that may be important for alternative sourcing strategies. The availability of skilled labor is another important factor. Countries like India are investing in training programs to prepare professionals for future industries such as semiconductor manufacturing. Finally, a good understanding of the regulatory environment is indispensable. This includes factors such as taxes, tariffs, and trade agreements that can significantly impact costs and operational efficiency. Emerging ‘Plus X’ countries are actively working to create favorable trade relationships, thereby offering increasingly trade-friendly environments to attract foreign investments. In this context, a long-term commitment to these locations is important, as establishing a diversified production base often requires significant upfront investments.

Strong Partner for Complex Supply Chains

With its comprehensive service portfolio, DHL Global Forwarding helps companies make their supply chains not only efficient but also future-proof. This includes multimodal transport solutions that combine the advantages of different transport modes. For example, companies can reduce costs and optimize delivery times by combining sea and air freight.

Furthermore, DHL Global Forwarding offers specialized consulting services to assist companies in developing their ‘Plus X’ strategies. These range from assessments of transport capacities in potential destination countries to analyses of regulatory requirements and optimization of warehousing and distribution networks. With a global network in over 220 countries and territories and teams with local expertise, DHL can develop tailored solutions that meet the individual needs of companies.

Deployment of Innovative Technologies

Another particular strength of DHL Global Forwarding is the use of innovative technologies to enhance transparency and efficiency. Through digital platforms like myDHLi, the company provides its customers with real-time information about their supply chain, seamless shipment tracking, and more efficient process management. This combination of technology and expertise makes DHL an indispensable partner for companies looking to diversify and strengthen their supply chains.

Download the white paper here

Photos © DHL