China remains the world’s largest logistics market for 7 straight years

Beijing: China maintained its position as the world’s largest logistics market for the seventh consecutive year in 2022, the Chinese news agency, Xinhua, reported.

The total revenue of the country’s logistics sector came in at 12.7 trillion yuan (AED7 trillion) last year, according to the China Federation of Logistics and Purchasing.

China’s top 50 logistics companies raked in about 2 trillion yuan in revenue last year, the federation noted, saying that a batch of internationally competitive enterprises has started to emerge in the market.

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To build a modern logistics system, China should work on the digital transformation of its logistics infrastructure, including railways and ports, and promote the integration of resources in the sector, the federation said.

Social logistics expanded to 347.6 trillion yuan in 2022, the data revealed.

About China Logistics Industry

According to the 2022 Agility Emerging Markets Logistics Index, China has the largest logistics market in the world, based on logistics opportunities and business fundamentals. Much of this is attributed to the country’s growing logistics infrastructure; an extensive network of warehouses, and storage facilities paired with advanced IT services. Over the past decade, the Chinese government has substantially invested in the logistics industry, amounting to 181.6 billion yuan (approx. 29 billion U. S. dollars) in 2021. The corresponding market value of China’s logistics industry has doubled in this period, surpassing 335 trillion yuan in 2021. Such rapid growth is closely linked to currently booming domestic and cross-border e-commerce business. The e-commerce logistics industry has expanded swiftly, with 2021 revenue exceeding 850 billion yuan. Notably, the outbreak of the COVID-19 pandemic provided an opportunity for the e-commerce logistics industry’s accelerated growth. However, the government’s dynamic zero-COVID policy has affected the manufacturing and exporting hubs, putting constraints on the global supply chain. Reduced shipping capacity due to container congestion at ports caused a significant spike in container freight rates. In September 2022, China’s logistics industry prosperity index (LPI) showed that the country’s logistics industry gained a slight rebound from previous months.

Belt and Road Initiative (BRI) strengthening China’s global logistics leadership
First announced in 2013 as China’s global connectivity strategy, the Belt and Road Initiative (BRI) has already invested a significant amount in transportation and logistics infrastructure worldwide. This massive project has not only propelled China to become a global logistics leader but also a provider of logistics infrastructure and technology to others. Enhanced logistics performance can lower logistics costs for the BRI countries and enable them to access international procurement networks. This is particularly beneficial for low-income countries.
BRI has ushered in a new era of trade, where China’s imports and exports with countries participating in the BRI project have grown around 1.5 times since March 2015, as reflected by the Belt and Road Trade Index. Three Chinese logistics giants, namely Xiamen Xiangyu Co., Ltd., HNA Technology Group, and COSCO Shipping Holdings Co., Ltd., ranked in the Forbes list of the top 10 global transportation companies. In addition, China State Railway Cor., Ltd., COSCO Shipping Holdings Co., Ltd., and S.F. Express Group, were included in the list of top 10 global freight forwarders in 2021.
Next-generation logistics headed toward smart logistics
With digitalization and the development of technologies, such as artificial intelligence and cloud computing, China’s logistics industry has been transferred from labor-intensive to autonomous and upgraded from traditional mode to smart logistics in many areas. As of 2020, the market size of China’s smart logistics industry grew to 54.4 billion yuan. Another 52 billion yuan of funding was added to the smart logistics sector a year later, of which automated or unmanned driving technology received the highest investment amount of 25.6 billion yuan.
Smart Logistics mainly operates on three pillars: third-party (3PL) logistics, freight forwarding, and heavy transport. It transforms the way the logistics industry operates by improving efficiency and reducing inventory. Amid the rising trend of online shopping, smart logistics helps the courier sector deliver parcels faster while reducing costs and improving safety and security. Known as the market “intelligent logistics brain”, Alibaba’s Cainiao logistics services earned over 46 billion yuan in income in the fiscal year 2022.

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