Chinese Logistics Industry

What is Logistics
Logistics is that part of the supply chain process that
plans, implements, and controls the efficient, effective
forward and reverse flow and storage of goods, services,
and related information between the point of origin and
the point of consumption in order to meet customers'
Source: Council of Supply Chain Management Professionals
Evolutionary Timeline of logistics
SC sustainability
Top 3 SC challenges in the next 10
years as described by managers:
Sustainability & CSR
Risk management in global logistics
Emerging markets
Bloemhof-Ruwarrd (1995)
* Green supply chain
Lee et al. (1997)
* Bullwhip
Zin & Bowerson (1988)
* Concept of
Haulihan (1985)
* Supply chain mgt.
Bowersox (1969)
* Integrated logistics
Forrester (1958, 61)
* Physical distribution
Modern Logistics in China
 Concept of “Wu Liu”
 Modern Logistics Industry
 Started from late 1990’s
 China’s logistics industry experienced rapid growth since
China’s opening up and reform in 1978.
 In 2007, the nation’s total social logistics value reached
RMB 74.8 trillion, up 25.5% over 2006 (mainly boosted by the
logistics demand of industrial goods, imports and exports).
Modern Logistics in China
Modern Logistics in China
Modern Logistics in China
 Understanding of modern Logistics by people
 Still a lot think logistics is transportation & warehousing
 Logistics Human Resource
 By 2010, market demand for logistics professionals with
education of diploma or above: 300,000-400,000.
 People working in the industry that need training: >1 million
 Logisticians have been listed as among 12 professionals that are
in high shortage in China
In Shanghai itself, there has been a shortage of Logistics
professionals as large as 500,000.
Modern Logistics in China
Chinese Logistics Industry
-History and Structure
 History
1949-1979 Planned Economy Period
Transport and warehousing were mainly done by wholesalers
and merchant transport & warehousing companies, among
which wholesalers totaled 80% of market share.
1980-Mid 1990’s Innovation Period
 Manufacturers and retailers started to build their own
warehouses and fleets.
 Transport & warehousing companies began to provide
services directly to manufacturers.
 Government started experiment of logistics parks.
Chinese Logistics Industry
-History and Structure
 History (continued)
Mid 1990’s-Now Modern Logistics
 With foreign investment coming into China who also
brought in modern logistics principles and network
systems and increased market competition, more and
more manufacturing companies realized the importance
of logistics.
 At the same time, more and more joint venture 3PL
companies and private logistics companies appeared in
the market.
 Some manufacturing and merchant enterprises started to
turn towards logistics outsourcing. This has implied the
start of modern logistics industry in China.
Chinese Logistics Industry
-History and Structure
 Structure
Now combined as Ministry of
Transportation (rail, water, road)
 Ministry of Commerce
 Ministry of Railway
 Ministry of Communication
 Civil Aviation Administration
 Customs General Administration
 State Administration of Taxation
 The Ministry of Public Security
 State Administration for Industry and Commerce
Chinese Logistics Industry
-History and Structure
 Structure (continued)
Companies in it
 Third-party Logistics Companies
 In-house Logistics Division in Manufacturing or Merchant
 Logistics Education and Research Organizations
 Logistics Equipment and Facility Companies
 Logistics Information Service and Consulting Companies
 Logistics Real Estate Investors
Types of 3PLs in China
Chinese Logistics Industry
 Central Policies
 Current Policies
 Transport Related Policies
 Distribution Related Policies
 Foreign Investment Policies
 Taxation Policies
 Import & Export Policies
 Custom’s Regulations
 Inspection Regulations, etc.
Chinese Logistics Industry
 Central Policies
 Nine ministries jointly announced <recommendations on promoting the
development of Chinese Logistics Industry>(2004).
 It says government will improve logistics development
environment from three areas: administration, taxation
and regulation of market system.
 It also announced 7 measures to be executed.
 National Development & Reform Commission, 13 government ministries,
2 associations: Ministerial Associate Meeting System (2005).
 Logistics has been set to be one of the 10 strategic industries that need
to be greatly developed (2009).
Chinese Logistics Industry
 Municipal Policies
Shang Hai: 10th. 5-year Plan (first of the kind)
 Logistics being one of the four strategic industries
 Three areas of logistics development:
• Port Logistics (airport, deep seaport)
• Distribution Logistics
• E-commerce Logistics
 Three Logistics Parks
• Pu Tuo Logistics Park
• Pu Dong Airport Logistics Park
• Waigaoqiao Bonded Zone
Shanghai and the port
 Shanghai, Shenzhen, Qingdao, Tianjin, Guangzhou, Xiamen, Ningbo and
Dalian are listed among the worlds top 50 container ports.
 Shanghai Port: freight volume in 2005 reached 443 million tons, exceeded
Singapore Port for the first time.
Shanghai and the port
-Yang’shan Port
 A 20-year, US $14.5 billion project that aims to build
 52 berths along
 13-km waterfront
 with a draught of at least 15 meters
 at the Yangshan Deepwater Port
Shanghai and the port
-Yang’shan Port
First Stage
Completed on Dec. 10, 2005
 1.6-km total length along seashore
 5 container berths
 Total investment 6 billion RMB
 32.2 km sea bridge with 4 driveways
Chinese Logistics Industry
-Market Openness
 WTO Commitment
From 2005, areas include road freight transport,
leasing, wholesaling and retailing of general products
and their distribution, import & export truck
transportation, etc. have been opened to overseas
Chinese Logistics Industry
-Market Openness
Multinational Logistics Companies’ Development in China
Multinational Logistics Companies’ Development in China
The Impact of Economic Crisis
The total value of social logistics achieved a fast growth of 26.7% in the first
three quarters of 2008.
Impacted by the global financial crisis, China's logistics industry had dropped
since Sep, 2008, especially the sharp growth drop of port cargo turnover.
The Impact of Economic Crisis
With the further influences of global economic crisis,
China’s logistics industry will step in the period of slow
growth and structural adjustment, which will also create
new development opportunities for some 3PLs.
 In conclusion, China’s logistics industry has great
potential. The growth of total social logistics value
will be no less than 20%.

similar documents