China's total logistics value expected to grow 10pc this year

Source:shippingazette

　　CHINA Federation of Logistics and Purchasing (CFLP) made a preliminary estimation that China's social logistics value, the collective value of all logistics operations in the country, and the industry's added value, will be growing at a rate of 10 per cent in 2013, and that there's little chance that the percentage logistics cost take up in the GDP will fall, Xinhua reports. 

    In the past year, China's logistics industry experienced a steady growth as the country's economy improved. Preliminary calculation shows that the full-year social logistics value of 2012 was CNY177 trillion (US$28.37 trillion), rising 9.8 per cent year on year, but 2.5 percentage points slower than the growth in 2011. 

    Added value of the logistics industry increased 9.1 per cent to CNY3.5 trillion. Though slower year on year, the growth was still one percentage point faster than that of the tertiary industry. The added value took up 6.8 per cent in the GDP and 15.3 per cent in the added value of the tertiary industry. 

    China's logistics has been through a harsh time and managed to achieve a steady and modest growth last year, said He Liming, chairman of CFLP. But he pointed out that as the growth steadies the industry slows down and a series of underlying problems that have long been neglected during the fast development period will emerge. 

    Social logistics cost, the general cost of all logistics operations in the country, increased 11.4 per cent to CNY9.4 trillion, seven percentage points slower than in 2011. Its percentage in GDP is at 18 per cent, 0.2 percentage points higher year on year, still remaining at a high level. 

    All cost factors of the logistics industry climbed in the past year. Personnel cost increased 15 to 20 per cent. Fuel price was about three times of that in year 2000. Toll charge already took up one third of the transportation cost of a logistics operator and rent of land and warehouses in major cities rose again. From January to November, core business revenue of China's major logistics operators grew 26.5 per cent year on year, while cost jumped 31.6 per cent up. Profit rate of core business revenue was only at 3.7 per cent. 

    While the risk of the logistics market continues to increase, the growth of cost is also hard to reverse. This has put greater pressure on the logistics operators. Besides, there are problems of lower quality of service, overcapacity and ineffective connection between different types of transportation means.