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An Evaluation of the Factors That Determine Carrier Selection in Southern China

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An Evaluation of the Factors That Determine Carrier Selection in Southern China University of Huddersfield Repository Wong, Peter Chi Chung An evaluation of the factors that determine carrier selection Original Citation Wong, Peter Chi Chung (2007) An evaluation of the factors that determine carrier selection. Doctoral thesis, University of Huddersfield. This version is available at http://eprints.hud.ac.uk/id/eprint/713/ The University Repository is a digital collection of the research output of the University, available on Open Access. Copyright and Moral Rights for the items on this site are retained by the individual author and/or other copyright owners. Users may access full items free of charge; copies of full text items generally can be reproduced, displayed or performed and given to third parties in any format or medium for personal research or study, educational or not-for-profit purposes without prior permission or charge, provided: • The authors, title and full bibliographic details is credited in any copy; • A hyperlink and/or URL is included for the original metadata page; and • The content is not changed in any way. For more information, including our policy and submission procedure, please contact the Repository Team at: [email protected]. http://eprints.hud.ac.uk/ An evaluation of the factors that determine carrier selection in Southern China By WONG Chi Chung, Peter A thesis Submitted in Accordance with the Requirements for the Degree of Doctor of Philosophy School of Applied Sciences The University of Huddersfield 2007 DECLARATION I hereby declare that the thesis entitled “An evaluation of the factors that determine carrier selection in Southern China” is original and has not been submitted for other degrees or the like in this University or any other institution. It does not contain any materials, partly or wholly, published or written previously by others, except those references quoted in the text. ___________________ WONG Chi Chung, Peter ii ABSTRACT The selection of freight transport mode in cities like Hong Kong, with little land, is in some respects obvious. The deciding criterion for mode/carrier selection is based on the selection of either the lowest total transport cost or the shortest transit time for the cargo. The peculiar nature of each transport mode, namely; rail, sea, road and air, will definitely earn their own places when shippers need to make a decision on their shipments. The nature of the cargo will also affect the choice of carrier/mode when they are transported in break bulk. Fortunately, the invention of ISO containers in the late 1950s eliminated and overcame the shortfall in some transport modes. With the extensive usage of ISO containers hereafter, shippers can now enjoy a much freer choice of transport mode. When China started its open-door policy in the late 1970s, many local (Hong Kong) manufacturers relocated their factories to the Pearl River Delta (PRD) due to the low labour and land costs. Delivery of shipments was mainly carried out by Hong Kong freight forwarders as they had been in business with the shippers for decades. Road transport was the only mode choice available at that time due to the inflexibilities in other transport modes such as sea and rail. Progressively, these factories were relocated northwards at a later time due to the gradually increasing labour and land costs. Freight forwarders were then faced with a prolonged delivery time due to the stringent Customs regulations in China as well as a progressive increase in the physical distance between the factory and the loading port in Hong Kong. The continuous developments in adjacent ports in Southern China offered freight forwarders an opportunity to revise the route of consignments so that the lowest cost and shortest transit times were achievable. Nowadays, consignments from the PRD region iii can be transported to the loading ports via at least three transport modes, namely, sea (barge), road (truck) and rail. In addition to physical constraints in the mode/carrier selection, the mode choice in China is further complicated due to the inflexible Customs regulations and government policies on tax rebates. Considerable research has been done on mode and carrier selection for bulk cargo in Western countries. However there is no explicit study on the mode choice in China. This thesis studies factors that will affect the shippers’ mode/carrier choice and ascertains the unique key factors that will affect their mode/carrier choice in the PRD for their overseas consignments. From this study, it was observed that shippers irrespective of the consignment size and cargo value prefer to use a loading port that is reliable and efficienct in operation. This is the first thesis written about carrier mode choice in China applying systematic and rationale methods to express the mode selection criteria in PRD area. The results were achieved by using the pairwise comparison method - Analytical Hierarchy Process (AHP) method so that rigidity of the results is academically accepted. Nevertheless, further study on the mode choice can be carried forward through assessing buying behaviour and the shipper-carrier relationship. iv ACKNOWLEDGMENTS I would like to thank Professor Colin Bamford for his guidance and patience in my PhD study. Without his understanding and tolerance I could not have finished writing up this thesis. I must also thank Dr Anthony Whiteing of Leeds University, second supervisor of my PhD study, for his advice and support during the initial stage of the programme. My sincere thanks goes to my colleague, Dr Jimmy J.N. NG for his unconditional support in arranging various meetings with shippers and freight forwarders in Hong Kong, Guangzhou and Shenzhen. These meetings have provided to be valuable in writing up this thesis. I greatly acknowledge Professor Hong Yan in my department at PolyU for his time to give advice and proofread my AHP model and conclusion. I also thank my colleagues Dr T. L. Yip for showing me how to carry out the process of data mining and precious suggestions on this thesis. I must also thank the members in the Executive Committee of both Institute of Seatransport, Hong Kong and Shenzhen Maritime Shipping Association for their time and supports in attend the meetings and comments on this project. I would like to dedicate this thesis to my parents, my wife and my daughter, Beatrix for their support over the past five years. v TABLE OF CONTENTS CHAPTER ONE – INTRODUCTION ............................................................................................................... 1 1.1 CONTEXT OF RESEARCH.................................................................................................................... 1 1.1.1 The Greater Pearl River Delta................................................................................1 1.1.2 The Development of Greater Pearl River Delta.....................................................3 1.1.3 The role of Hong Kong in PRD .............................................................................4 1.2 AIMS AND OBJECTIVES....................................................................................................................... 6 1.3 METHODOLOGY.................................................................................................................................... 8 1.4 CHAPTER OUTLINE............................................................................................................................ 10 1.5 LINKS BETWEEN AIMS AND OBJECTIVES, CHAPTER STRUCTURE AND METHODOLOGY.................................................................................................................................. 12 CHAPTER TWO – THE PEARL RIVER DELTA......................................................................................... 13 2.1 INTRODUCTION................................................................................................................................... 13 2.2 BACKGROUND OF THE PEARL RIVER DELTA........................................................................... 15 2.3 PEARL RIVER DELTA......................................................................................................................... 16 2.3.1. General Profile of each city .................................................................................18 2.3.1.1 Shenzhen.............................................................................................................19 2.3.1.2 Dongguan.........................................................................................................20 2.3.1.3 Guangzhou ...........................................................................................................22 2.3.1.4 Zhongshan............................................................................................................22 2.3.1.5 Huizhou................................................................................................................24 2.3.1.6 Foshan..................................................................................................................25 2.3.1.7 Jiangmen ..............................................................................................................25 2.3.1.8 Zhuhai ..................................................................................................................25 2.3.2 The industrial zones in selected cities..................................................................26 2.3.2.1 Shenzhen..........................................................................................................28
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