Executive Briefings

Chinese Logistics Sectors to Continue Strong Growth, New Report Claims

Despite the global economic slowdown, the Chinese logistics industry is still set to experience strong growth over the next five years, according to China Logistics; the latest report by Transport Intelligence published November 25. However, says the report, there will be considerable variance in rates of growth across the various segments of that industry.

The fastest growing sector, it states, will be the Chinese International Express industry which is forecast to expand at around 23% a year on average up to 2012. That is significantly lower than in previous years, when several of the major players claimed growth rates of 35-40%. Given the economic environment, though, that still represents significant progress and justification of the major investment plans of the leading integrators.

The Contract Logistics sector will also experience similar rates of development, continues the report. Ti expects the value of that market to reach $22.2bn by 2011, representing an average annual compound growth rate of 21.7%. Outsourcing will be an important factor in that figure, as domestic logistics service providers increase their sophistication and foreign-owned enterprises continue their penetration of the market.

The Freight Forwarding sector faces the greatest challenges, predicts the report, exposed as it is to the vagaries of trade volumes, the fluctuating cost of oil and highly volatile freight rates. Despite that, Ti believes the market will see an annual average growth rate of about 13.5% between 2007 and 2011.

Commenting on the findings of the report, John Manners-Bell, Ti s Chief Executive, said: "Given that much of the developed world is on the brink of recession, it would be easy to write off prospects for growth in China on the false assumption that the market is solely dependent on Western consumers. Although China is certainly not completely de-coupled from its export markets, the country s economic growth - forecast this year to be only 9.5% ! has in recent years developed its own domestic dynamics. With the government planning to stimulate its economy further by investing in the coming year some of its huge reserves, China is a good bet to ride out the recession."
Transport Intelligence

Despite the global economic slowdown, the Chinese logistics industry is still set to experience strong growth over the next five years, according to China Logistics; the latest report by Transport Intelligence published November 25. However, says the report, there will be considerable variance in rates of growth across the various segments of that industry.

The fastest growing sector, it states, will be the Chinese International Express industry which is forecast to expand at around 23% a year on average up to 2012. That is significantly lower than in previous years, when several of the major players claimed growth rates of 35-40%. Given the economic environment, though, that still represents significant progress and justification of the major investment plans of the leading integrators.

The Contract Logistics sector will also experience similar rates of development, continues the report. Ti expects the value of that market to reach $22.2bn by 2011, representing an average annual compound growth rate of 21.7%. Outsourcing will be an important factor in that figure, as domestic logistics service providers increase their sophistication and foreign-owned enterprises continue their penetration of the market.

The Freight Forwarding sector faces the greatest challenges, predicts the report, exposed as it is to the vagaries of trade volumes, the fluctuating cost of oil and highly volatile freight rates. Despite that, Ti believes the market will see an annual average growth rate of about 13.5% between 2007 and 2011.

Commenting on the findings of the report, John Manners-Bell, Ti s Chief Executive, said: "Given that much of the developed world is on the brink of recession, it would be easy to write off prospects for growth in China on the false assumption that the market is solely dependent on Western consumers. Although China is certainly not completely de-coupled from its export markets, the country s economic growth - forecast this year to be only 9.5% ! has in recent years developed its own domestic dynamics. With the government planning to stimulate its economy further by investing in the coming year some of its huge reserves, China is a good bet to ride out the recession."
Transport Intelligence