What does the future hold for China’s logistics and transport market? Well, it’s a rapidly growing sector that is hugely complex and competitive. As a global logistic and transport company with a particular focus on Asia and China, we always keep pace with the changes.
Future logistic and transport trends in China and what we do to meet the new demands
I’ve identified four future logistic and transport trends in China and what we do to meet the following new demands.
1. Increasing import to China and a shift in growth from the coast to the country
A clear trend is that the import to China is increasing as the domestic consumption rises. China is also pushing growth from the coastal cities like Shanghai into the country in order to spread the growth and take some pressure off the coastal region. This is affecting the logistics as it is vital to have a functional logistics chain, not only to and from the coastal ports, but also to and from the inland cities.
2. Continuing to be the most important exporting country for many years to come
The GDP growth in China is still expected to be at 7.5% for 2014 and China will continue to be the most important exporting country for many years to come even if the costs are increasing for labor, rents and most probably China’s fight against pollution will increase costs as well.
3. Suddenly changing rules and regulations affects the logistics services
However, we need to keep in mind that China is a different market where rules and regulation can change suddenly. One good example is the sudden introduction of VAT on logistics services, which has been changed and varied the past two years with different implementations in different geographical areas. The last information now from the government is that it should be withdrawn again from September this year. Well, let’s wait and see how it will turn out in reality.
In China there is more bureaucracy with more papers, more stamps, more permits needed requiring more manpower compared to the situation in Scandinavia.
4. Increased Internet shopping changes the supply chain
A fast growing segment in China is the Internet shopping, like Taobao, and this is pushing the logistics systems to cope with a booming number of deliveries to private homes and offices.
We also see an increasing number of customers who traditionally moved production from their home countries, for example in Scandinavia, to China and then started to import from China to their home markets. These companies are now starting to sell within China and Asia as well.
The supply chain has to be changed and for that we have several solutions. Please read about them in my next upcoming article China in Focus: Logistics and transport future trends (part 2).
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/ Niklas Olsson Greencarrier Freight Services
