China's logistics value up 9.7pc in first 8 months, but costs rise 11.3pc

A NEW report from the China Federation of Logistics and Purchasing (CFLP) says the total value of all logistics operations in the country rose 9.7 per cent year on year to CNY113.9 trillion (US$18.12 trillion) in the first eight months of 2012.

But the report also said the total cost of logistics China-wide increased at a faster rate of 11.3 per cent, indicating that efficiency and quality have deteriorated, said Xinhua.

In this period, industrial product logistics value increased 10.1 per cent to CNY103.9 trillion, taking up 91.2 per cent in the total logistics operation value. Logistics value of imported goods maintained a slow growth of 4.9 per cent to CNY7.5 trillion, taking up 6.6 per cent of the total.

The total cost of logistics operations increased 11.3 per cent to CNY5.6 trillion. Its growth has been faster than that of the total logistics value since June. Even the growth is slowing down, this still means that China's logistics operations still suffer from low efficiency.

Among new costs incurred by logistics operations, transportation expenses were down but management fees increased.

In the first eight months, investment in the logistics industry fixed assets went up 15.4 per cent to CNY2.2 trillion. The growth was 0.2 percentage points faster than in the period from January to July.

CFLP said the industry has remained a modest and steady increase in this year. But express delivery and logistics of household chemicals and medical products continued to grow fast. On the other hand, the weak demand brought by the downward trend in economy has cut profits of logistics operators due to higher costs.