By Wei Jigang, DRC

2018-2-27

Logistics modernization is a process of shifting the traditional logistics onto modern and future logistics. Promoting logistics modernization is significant for enhancing economic operation efficiency, promoting economic growth, advancing industrial structure adjustment and upgrading, and improving people’s livelihood. Currently, as China’s logistics and express delivery industry is not highly modernized, efforts need to be made to boost the modernization of logistics including the concept and model, the infrastructure facilities, the elements and technological equipment, the organization and operation, the logistics system and green logistics.

We need to abandon the backward concepts and change the business model. The logistics and express delivery industry needs to equip itself with advanced concepts, forgo the outdated traditional concepts and replace them with a systematic, innovative and long-term mindset. The government needs to view the development of the express delivery industry against the landscape of the entire human civilization progress. China’s logistics modernization needs to transform the business model across the board, and replace the traditional enterprise-centered model with the consumer-centered one and in a systematic, integrated and professional manner.

We need to strengthen infrastructure facilities and structure optimization. Infrastructure is the cornerstone of logistics modernization. We need to strengthen China’s logistics infrastructure building and structural optimization, and promote connectivity and social synergy of logistics infrastructure, so as to cultivate a logistics infrastructure network with strong functions, appropriate scale, scientific layout and high-end technology to ensure efficient, reliable and safe operation. The rural logistics network is a weak link in China’s logistics modernization. We need to strive to improve rural logistics, express delivery and distribution network system, strengthen the building of end-of-pipe outlets, and construct an advanced rural logistics system to form an integrated urban-rural modern logistics service system for the benefit of farmers, so that goods and materials can efficiently flow between urban and rural areas with outlets and logistics service covering all townships and villages.

We need to center on the core element and upgrade the technological equipment. Logistics modernization is a people-centered strategy. China is still inadequate in terms of logistics human resources scale, structure, capabilities and mobility. We need to build up the logistics discipline and training system, and form a multi-level human resources development system combined with college and vocational education and social training. Logistics technology and equipment application is one of the key factors of logistics modernization. We need to accelerate the utilization of modern logistics technology and equipment, systematically upgrade the traditional equipment and keep enhancing the logistics productivity. Meanwhile, we need to promote the integrated application of bar code, BeiDou Navigation Satellite System, radio frequency and other technologies, realize IT application and information sharing among all the links of logistics, enhance transparency of the entire business procedures and the integration of supply chain management, and utilize the innovations of emerging technologies such as Internet of Things, cloud computing and big data in logistics operation management. China’s smart logistics has made a good start with a swift progress. We need to further promote the in-depth integration of logistics industry and digital technology in the entire process and overall supply chain, and fully advance the logistics automation, digitalization and intelligent development. Intelligence is a high-level application of logistics automation, IT application and digitalization, which should be made the main goal for logistics modernization. In light of logistics standardization, we need to mainly strengthen the standardization of pallets, containers and other facilities, the standardization of packaging, loading and unloading, transport and other operation procedures, as well as the standardization of coding for the logistics units and nodes, digital sheets and other information.

We need to improve organization and operation, and enhance quality and efficiency. High-quality and highly efficient logistics organization and operation is a key symbol of logistics modernization. We need to accelerate logistics companies’ optimization of procedures and operation modes. Efficient supply chain management is an important orientation of logistics industrial development. We need to guide enterprises to take market demand as the orientation, to take realizing the win-win result for upstream, downstream and final consumers as the goal, and to effectively integrate the logistics of trade, goods, information, funds and business, so as to form synergy between enterprises and between companies and users, and promote the optimization of supply chain logistics and continuous reform. It is equally important to propel the synergy between logistics and relevant industries. We need to speed up the overall cohesion and synergy of logistics industry and other industries, and advance the development of related industries, so as to create a big room for the development of logistics industrial development. Continuous innovation is the lasting driver of logistics modernization, while the nature of innovation lies in commercialization of new ideas. We need to reinforce logistics companies’ status as innovative entities, strengthen a series of innovation in concepts, systems, services, business models, organization, procedures, management and technology, so that the logistics industry can create more value to continuously meet the demand of economic and social development. Emergency logistics capability is also a main benchmark of logistics modernization. We need to formulate a sound emergency response mechanism, a sensitive early-warning mechanism, a regulated emergency shifting mechanism and a reliable security regulation mechanism with sound coordination. We need to flesh out emergency material management capability, form a flawless emergency logistics information system and database, and establish capable emergency logistics departments, so as to enhance, to the largest extent, emergency logistics efficiency and security capability.

We need to realize green development in light of environmental management. China attaches high importance to green logistics development. However, due to its late start, the green logistics development still faces a series of problems. Therefore, it is imperative to incorporate environment management into the logistics system, accelerate the development of green purchasing, green transport, green warehousing, green packing, green delivery and relevant green logistics means, and improve the recycling logistics and waste logistics system. We also need to establish a cycle system of logistics linking companies’ purchase, production, sales, recycling and waste disposal, guide them to take modern logistics management as the means to make model innovations and improve services. Meanwhile, we need to support enterprises to put advanced technology into wide application, so as to reduce resource consumption and lower environmental sacrifice as much as possible and realize the optimization of logistics efficiency and benefits as well.

We need to improve the institutional mechanism and encourage fair competition. We need to further optimize the logistics market system, improve market rules, nurture market entities, optimize the market structure, deepen reform of the monopolized industries, check ill competition, and form a credibility-based and open-oriented modern logistics market system with orderly and lively competitions. In the future, we need to establish a systematic logistics management system across the board, an authoritative supervision system, an efficient government service operation mechanism, and a sound logistics legal and policy system. We also need to define the boundary of governmental functions according to the progress of logistics modernization and at different stages of market evolution, so as to form a locking force between government and market.