Director notes need for full logistics chain

Despite challenges from the global economy, China's logistics industry has maintained stable growth in 2011, said He Liming, director of the China Federation of Logistics and Purchasing.

He said first half-year revenue generated by the logistics sector reached 74.4 trillion yuan, a 13.7 percent increase over the same period last year.

Fixed asset investment also grew significantly, but "it increased at slower rate" than it has over the previous decade.

"Development of the logistics industry faces challenges in 2011 and beyond because of changing international economic conditions, the pressure from increasing labor costs and slowing export growth," the director noted.

To maintain profitability, many Chinese logistic companies increased prices this year.

SF-Express, one of the nation's largest, announced it hiked prices 2 to 4 percent in some parts of China from Oct 8.

He said to maintain sustainable growth, companies should improve service and strengthen self-discipline. "Mergers and acquisitions should be encouraged to utilize scarce resources and improve efficiency," the director noted."Efficiency in China's logistics industry has room for improvement," he said.

China's ratio of logistics spending to GDP is well above the average in developed countries, which is about 18 percent.

Chinese logistic companies have problems including nonstandard supply chain equipment, low truck availability, long loading times and too much hand loading. He said a complete modern industrial chain would help profitability.

The central government has released several guidelines this year to support healthy growth in the logistics industry including reduced taxes, further favorable land policies and more convenience for transport vehicles.