China's logistics industry shows vitality with sound recovery momentum

Estimated reading time: 5 minutes

By Du Haitao, Han Xin, Jin Bo, People's Daily

China's social logistics rose 4.4 percent year-on-year between January and April this year to 107.6 trillion yuan (about $15.07 trillion), up 0.5 percentage points from the first-quarter figure. The China Logistics Prosperity Index stood at 51.5 percent in May.

These statistics indicate a sound recovery of the Chinese logistics industry since this year, with major indicators continuing to rise. The continuous improvement in the national economy has consolidated the sound momentum for the development of the logistics industry, offering strong support for stabilizing the economy, expanding domestic demand and promoting consumption.

At 8:00 pm on May 31, China's mid-year "618" shopping festival started. Soon after placing the order a villager from Lhoka prefecture, southwest China's Tibet autonomous region received the smart LCD TV delivered by JD Logistics, the delivery arm of Chinese e-commerce giant JD.com.

This year, the company placed pre-sale commodities at thousands of warehouses in more than 300 cities across China, which enables the goods to be delivered at the fastest speed after orders are placed.

Customs clearance is getting smoother. At the Qianwan Container Terminal of Qingdao Port in east China's Shandong province, 17 tons of polyester knitted fabric imported by a garment manufacturer in Shandong's Yantai was unloaded from a vessel and then immediately shipped to the manufacturer's factory for production.

According to an executive of a logistics company in charge of the imported fabric, a new monitoring model has been launched by customs authorities in Qingdao that introduces machine inspection and ship-side direct unloading. It decreases the procedure of container lifting and transferring, which saves time for customs clearance and reduces logistics costs, the executive said.

From the rising business volume of express delivery to the busy cargo ships frequently seen at ports, the accelerated recovery of China's logistics sector this year reflects the country's vitality.

Statistics indicate that China's courier sector saw its delivery volume exceed 50 billion parcels this year as of May 31, and the milestone was achieved 27 days earlier than in 2022. In the first four months of 2023, the country's commercial freight volume increased 7.5 percent year-on-year to 16.53 billion tons, and the cargo throughput at ports across the country stood at 5.28 billion tons, up 7.6 percent from a year ago.

The China Federation of Logistics and Purchasing (CFLP) said the total revenue of the logistics industry rose 7.5 percent year-on-year in the first four months, 0.8 percentage points higher than that of the first quarter. In particular, over 5 percentage points of the growth came from the transporting and warehousing services as well as the express delivery sector.

"Policies to expand domestic demand have come into effect, and online and offline consumption scenarios have been integrated. Restaurants, supermarkets, florists and pharmacies in neighborhoods are connected by instant logistics services. This has further driven community consumption," said Zhou Zhicheng, a researcher with the CFLP and deputy head of the China Society of Logistics.

The continuous progress of digital transformation also enriched the commercial application scenarios of intelligent logistics.

For instance, a smart control system is launched at a port in north China's Tianjin municipality, which enables customs authorities to remotely monitor berthing and cargo handling in real time.

With this system, it's easier for foreign and domestic trade cargos to share the same vessels, said Sun Yan, an executive with the port. According to the man, the system has not only lifted the efficiency of domestic feeders, but also helped launch 10 new routes for domestic trade.

New business models of logistics created by the Internet, big data, cloud computing and Internet of Things technologies are offering strong support for the stable recovery of the industry.

At an international express parcel distribution center in Shenzhen, south China's Guangdong province, parcels from overseas entered smart CT equipment one after another for customs clearance, and trucks loaded with parcels were rushing to destinations across the country.

"The delivery of express parcels calls for high efficiency. Faster distribution and lower logistics cost are what make a courier company competitive," said an executive of SF Express, a Chinese multinational delivery services and logistics company based in Shenzhen.

The foreign trade volume of the company via cross-border e-commerce jumped nearly 50 percent year-on-year in the first quarter of 2023 thanks to the innovative upgrading made by relevant departments, the executive said.

At present, logistics companies are optimistic about the development of the logistics sector, which is seeing sound momentum for recovery. China will further optimize its business environment and accelerate sci-tech innovation, so as to foster stable and sound development of the industry and safeguard the security and stability of the industrial and supply chains.