Samsung Electronics, stung by the sudden demise of compatriot Hanjin Shipping, has moved to diversify its supply chain tactics. The giant conglomerate has signed a preliminary agreement with Russia’s railway authority to ship its goods and parts to Eastern Europe via the Trans-Siberian Railway.
Samsung Electronics said the move will reduce the lead time from 35 days by sea to just 18 days.
“Shortened lead times will bring Samsung more benefits, including stable inventory control, and immediate and efficient adjustments when product models change,” the Korean firm said in a statement.
Goods will be sent by ship from factories in South Korea and China to Vladivostok where they will then head by train to Slovakia, Hungary and Poland.
“Through close collaboration with Russian Railways, Samsung will endeavor to build up a more efficient and economical logistics network and diversify transportation routes to mitigate unexpected global risks,” Samsung said.
When Hanjin Shipping went bankrupt at the end of August, Samsung Electronics was left with around $38m of cargoes stuck on stranded ships in international waters prompting a major rethink in how the conglomerate goes about its global distribution systems