The business logistics sector has undergone tremendous growth in China in recent years, and its rapid development has made lives easier while effectively boosting economic growth.
However, there are still obstacles hampering the sector’s development. Many businesses, particularly in small cities, are seeking more incentives to help facilitate logistics in areas such as cross-border trading, and bring down their costs.
Wang Weidong, an official in charge of cross-border e-commerce in Shushan district of Hefei, capital of Anhui province, said that the volume of such business in the city has grown significantly in recent years.
However, Hefei’s international air cargo capacity is not sufficient. In fact, the only international cargo flight available in the provincial capital is one that operates twice a week to Chicago in the United States.
There is no air cargo agency in Hefei and this complicates matters for local companies who need to get their goods on the outbound flights to Chicago, which originate in Shanghai. By the time they arrive in Hefei, there’s little cargo space left.
To get around this problem, some companies send their goods to Shanghai to get them on the flights before they arrive in Hefei, but doing so adds to operational costs.
Zheng Haitao, owner of an e-commerce business in Shushan, said that the lack of air cargo space is a sore point in Hefei.
“The space for goods on the flights is extremely limited, and the pricing is not transparent,” he said.
Wang said the government is working hard to tackle the issue and enhance the provincial capital’s international cargo capacity.
“Without solid infrastructure, it will be harder to formulate market competitiveness for these logistics businesses,” he said.
A new national action plan announced in a guideline earlier this month promotes efforts to facilitate international logistics. The plan made it clear that efficiency will be improved by improving global logistics channels and easing customs clearance for cross-border trade, highlighting the vital role that business logistics plays in connecting domestic and global markets.
Some local businesses are also striving to make the process more intelligent, a direction included in the new action plan.
In 2013, Wang Jun started Wuhu Jiuheng Packaging Technology, a pallet production business in the province’s Wuhu city.
The company originally started off making ordinary wood pallets. Now, the pallets are equipped with chips, which enable businesses across the entire logistics chain to track the status of shipped goods.
Wang Yong, a professor at the KTH Royal Institute of Technology in Sweden, said that although the development of logistics infrastructure and networks in China remains uneven, the process is becoming increasingly intelligent.
While the demand for business logistics is expanding rapidly, the country still lacks modern businesses with a competitive edge, he said, adding that the sector needs to become more environmental friendly.