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Growing logistics offsets high costs
By Louise Ho |
December 14, 2011, Wednesday
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Print Edition
Print Edition
THE growing domestic logistics market and a recent e-commerce boom will help to counteract high logistics costs in China, according to auditing firm KPMG.
The Hong Kong Logistics Association estimated that logistics costs in China doubled from 3 trillion yuan (US$471 billion) in 2004 to 6.1 trillion yuan in 2009.
KPMG said in its latest report that logistics costs in China, which amount to about 18 percent of the country's gross domestic product, are higher than in many developed countries but that increasing domestic demand will help compensate for high costs.
"China's move to a more consumption-driven economy, combined with the improved accessibility of inland regions, has shifted the logistics industry's focus from being externally oriented towards the domestic market," said the report.
The report also pointed out that DHL's decision to sell its domestic express joint venture to a Shenzhen courier company, Uni-top, in July indicates the domestic delivery market will be mainly dominated by local companies.
Wang Guoqiang, chief financial officer of freight forwarder NTS, said: "For growth in private consumption to take off, China will need logistics companies that can build nationwide networks through which they can distribute goods to every city."
The report also said since 2008 the rapid development of consumer-to-consumer e-commerce in China boosted the logistics business.
The Hong Kong Logistics Association estimated that logistics costs in China doubled from 3 trillion yuan (US$471 billion) in 2004 to 6.1 trillion yuan in 2009.
KPMG said in its latest report that logistics costs in China, which amount to about 18 percent of the country's gross domestic product, are higher than in many developed countries but that increasing domestic demand will help compensate for high costs.
"China's move to a more consumption-driven economy, combined with the improved accessibility of inland regions, has shifted the logistics industry's focus from being externally oriented towards the domestic market," said the report.
The report also pointed out that DHL's decision to sell its domestic express joint venture to a Shenzhen courier company, Uni-top, in July indicates the domestic delivery market will be mainly dominated by local companies.
Wang Guoqiang, chief financial officer of freight forwarder NTS, said: "For growth in private consumption to take off, China will need logistics companies that can build nationwide networks through which they can distribute goods to every city."
The report also said since 2008 the rapid development of consumer-to-consumer e-commerce in China boosted the logistics business.
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