Essay by kikyo_lpUniversity, Master'sB+, September 2014

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Logistics and Transportation

Homework Assignment 1#

Ping Liu




Nov.11, 2012 was a famous day in China as it was Chinese Black Friday. On this day, most of the online products on Taobao can be discounted, and sometimes they only charge 20%-40% without a shipping fee. In order to take advantage of this special discount day, I clicked the purchase button at mid-night and competed with others to have the cheap products first. However, although I placed the order very early, it took at least two weeks for me to receive these products and some of them took even longer about one month. Taobao offers the package tracking system, which can show the delivery status. However, the system always showed that the products were in the warehouses. There is a special word in China to describe this situation, named "Bao Cang", which means that express companies suddenly receive too many packages, which can hardly be distributed and delivered.

Therefore, packages are all stuck in the warehouse and it took a long time to have business return to normal. Nowadays 80% of logistic business is handled by four big third party logistics organizations, which have hundreds of branches covered in China, more staff, and advanced supporting equipment(å©·). Although logistic companies are booming in recent years due to the popularity of the E-commerce business, the problem of "Bao Cang" has never been solved, and it keeps happening every year, even though it is predictable that there will be huge incoming sales orders and three-party logistics organizations do prepare every year. It is very normal for people to have the goods one month later. Several reasons in the logistic industry lead to this situation.

Firstly, the demand highly exceeds the maximum capacity of logistic companies . In 2009 E-commerce business...