China’s Logistics Market Set for Rapid
Expansion.
(Back
to Research & News)
Fed by the twin engines of international trade and domestic
consumption, China’s logistics industry is continuing
its rapid expansion. International trade increased by
23.2%, industrial value added output increased 11.4%
and inflation adjusted retail sales increased 12% in
2005. In addition to strong economic growth, the inefficiencies
of current distribution networks and poor infrastructure
have created substantial growth opportunities for logistics
providers that can create viable solutions to these
challenges.
Total logistics expenditures in China totaled $234 billion
in 2005, of which, only 3%, or 7.5 billion was spent
through outsourced activities. The relative small portion
spent on outsourced activities and the over spending
on total logistics expenditures as a part of GDP represents
a unique opportunity for rapid growth. China is estimated
to spend approximately 21.3% of GDP on logistics related
expenditures, compared to 8.6% for the USA. As a result
and to help correct this imbalance, the 3PL market is
expected to increase at least 20% per annum for the
next 3-5 years.
