The content of this report will be updated with the latest scenarios based on the global COVID-19 Pandemic
The China freight and logistics market has been on a constant rise since the past few years and is expected to grow at a CAGR of more than 6% during the forecast period. The factors such as transportation, government’s regulation, warehousing and storage, IT supporting and infrastructure are likely to impact the growth of China Logistics industry. With Asia- Pacific region leading the global logistics market in 2018 with market size of 2425.91 billion euros and China being the biggest contributor in the region, the future prospects for the industry are promising.
Key Market Trends
Largest Logistics Market in the World
As the global economy continues to expand, the global logistics industry will continue to play a critical cross-functional role ensuring smooth transport of goods between industries during the production cycle and delivery of finished goods to consumers. Currently the Logistics market in China is the largest in terms of market size not only in Asia- Pacific region but around the world as well and is likely to grow further. To facilitate this growth trend, China’s government has set clear goals for the future. By massive investments in infrastructure and the implementation of the Belt and Road Initiative (BRI), which aims at overcoming "bottleneck logistics," China is leading the world not just in the logistics market but also in providing other countries with logistic solutions technologies. The initiatives like Made in China and Created in China are revamping the Chinese global reputation in terms of quality and service. In 2018, the exports increased by 25% to a total of 7.9 trillion yuan. Also 6,300 trains traveled between China and Europe via China Railway Express, marking a 72% increase over 2017. These initiatives show China’s strong ambition to remain the leaders in the global logistics market.
Booming E-commerce Industry uplifting the Third-party Logistics (3PL) Market in China
One major trend in the Chinese market is increase in overseas shopping. The preference for overseas shopping is increasing in China due to the increased internet penetration. Consumers have access to various communication devices and payment methods and have become familiar with the mechanics and benefits of shopping online. In addition, the Internet has raised awareness of new online shopping destinations across the globe. Online shopping user base and the total amount of online shopping are showing strong growth momentum in China.
In 2018 the cross-border e-commerce transactions have increased by 25% share and now amount to a total of 7.9 trillion yuan. E-commerce companies like Alibaba Group, JD.com, and NetEase have also some of the major cross-border e-commerce business sites. To adapt to the changing demands, the service providers are going for an efficient solution in the form of Third-party logistics(3PL) companies. 3PL also allows vendors to focus on other activities to promote their business while the logistics are handled by 3PL service providers. The 3PL industry in China is still in the growing stages with traditional companies still being preferred over 3PL service providers. In 2018 the 3PL market in China generated a revenue of 203.2 billion US$ and is further expected to grow at a rate of over 10%.
The industry is highly competitive and quite fragmented with many players existing in the China’s freight and logistics market. The participants in the market include foreign-owned companies, in-house logistics operations and Chinese-owned transport companies. Some of the existing major players in the market include – DB Schenker, UPS, Deutsche Post DHL, FedEx Corp., Yusen (NYK) Logistics, XPO Logistics, China Ocean, Shipping (Group) Company (COSCO), Xiamen Xiangyu Group Co. Ltd., Jizhong Energy, International Logistics Group Co., Ltd., Sinotrans & CSC Holdings Co., Ltd., S.F. Express and CEVA Logistics.
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