China Logistics Market: Moving North | An Aranca Infographic

China Logistics Market: Moving North | An Aranca Infographic
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China's logistics industry expanded around 10% year-on-year (yoy) and reach around 195 trillion Yuan in 2013. China's logistics market is fragmented with a large number of logistics enterprise. Expansion activities by foreign, local and continued government support has driven the growth of the Chinese logistics market.

Transcript of China Logistics Market: Moving North | An Aranca Infographic

  • 1. Chinas logistics market : Moving northChinas logistics market is estimated to grow at around 10% year-on-year (yoy) and reach around195 trillion Yuan in 2013, primarily driven by improved services, growing industrialization,expanding domestic retail market and continued government support16.7% Estimated CAGR of Chinas total logistics value 200813E (Tn Yuan)971251582008 2009 2010 2011 2012 2013EEstimated share of transportation cost in the total logistics value (2013)51.3%52.6% 55.3% 53.5% 53.0% 52.1% 51.3%34.7%12.7%32.9% 33.8% 35.0% 35.1% 36.2%11.8% 12.7% 12.0% 12.8% 12.5%2008 2009 2010 2011 2012 2013ETransportation Cost Inventory Cost Management CostGood time for growthRecent expansion activities by foreign and local players, and continued government support towardimprovement of logistics services has further driven the growth of logistics industry in the country.The manufacturing sector remains key to Chinas economic development. The logisticsvalue of industrial products is estimated to account ~91.4% share of the total value in 2013.China logistics prosperity index, LPI (AprilDecember, 2013)*Quarter 2013LPIApril 1354.8July 1352.4Oct 1353.6Dec 1352.4Note: An LPI reading above 50 indicates overall expansion in the logistics sector; below 50 indicates overall contraction.Source: China Federation of Logistics & Purchasing (CFLP), The Fung Business Intelligence Centre, Aranca AnalysisKEY CHALLENGES!A fragmented marketChinas logistics market is fragmented with a large number of logistics enterprises. Road transport enterprises accountfor the largest share of the logistics market, in terms of the number of enterprises (790,000 during 201112).A long way to goAlthough Chinas economic growth has been driven by increasing demand for logistics services, the countrys logisticscapabilities still remain at an early stage of development when compared to other developed economies like the US andthe European Union.Compiled by: Mayur VarandaniInfrastructure development projects are largely undertaken incoastal areas. Inland areas still lag the appropriate infrastructure.Warehouses in China are relatively sub-standard and do notmeet the international standards. Also, poor warehouse layoutdesign and insucient material handling equipment have aectedthe eciency of operations.High toll fees imposed by the government for recoveringconstruction costs of roads and bridges has further aected theindustrys growth.Although there is an increasing number of graduates in logisticsand transport, the supply of skilled labor still remains a keychallenge for the industry.2014 Aranca. All Rights Reserved. www.aranca.comIf you wish to reproduce or use this infographic in any format, please email us at syndicate@aranca.com17719590Source: China Federation of LogisticsPurchasing (CFLP), The Fung Business Intelligence Centre, Aranca AnalysisSource: China Federation of LogisticsPurchasing (CFLP), The Fung Business Intelligence Centre, Aranca AnalysisSource: China Federation of LogisticsPurchasing (CFLP), The Fung Business Intelligence Centre, Aranca Analysis