Study On Logistic Cost Control For Transnational Procurement In CREC Ethiopian National Railway Project

In today’s economic globalization, more and more Chinese construction enterprises went abroad to enter the overseas project contracting market with their own strength, and became the backbone of China’s foreign economic cooperation. The scope of their participations covered the transportation, energy, communications, water conservancy and other fields. As an important part of the overseas projects, procurement logistics is an important channel between domestic supplies and overseas projects. Not only good procurement logistics can ensure that domestic supplies meet the needs of overseas projects on time, but also protect the success of these entire overseas projects. On October 25,2011, China Railway Group Limited and the Ethiopian Railway Corporation signed a contract EPC project, which includes the national railway projects and light rail project. The total cost of project is $2.1 billion. In this context, this paper elaborates procurement logistics, cost analysis and control concepts, and introduces the China Railway Ethiopian railway project profiles, and analyzes all aspects of procurement logistics costs one by one. It puts forward costs control measures of procurement logistics in Ethiopian railway project. The studies have shown that:Transportation costs are maximum procurement logistics cost of Ethiopian railway project. Domestic ports transport, maritime transport and overseas land transport are the main factors of transport costs. In addition to the cost of handling warehousing, logistics management costs and fines outside, supplies repackaging will affect the project procurement logistics costs.The costs control strategies, which include selecting the strength freight forwarders, as early as possible escalation of requirements planning, strictly supplies packaging, enhancing pass rate of customs inspection, can reduce the procurement logistics cost of Ethiopian railway projects, and provide scientific references of procurement logistics decision of China construction companies’overseas engineering.