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Logistics sector growth slows on bad weather

Reporter: Yang Chengxi 丨 CCTV.com

08-23-2016 16:24 BJT

Bad weather that included floods and steamy temperatures took its toll on China's logistics sector this year, especially in July.

The China Federation of Logistics and Purchasing reported Tuesday that the country's logistics volume grew slower in the first seven months of this year compared to the same period last year.

A total of 126 trillion yuan's worth of goods flew through China's logistics system from January through July. The total volume grew 6.1 percent year on year,slightly faster than the same period last year but 0.1 percentage points lower than in the first six months.

"According to historical experience, July is usually a low point for logistics. But we see some overall structural trends. Bulk commodities continues to decline but logistics for consumer goods kept growing fast," said He Hui, deputy director of China Logistics Info. Center.

Correspondingly, total costs for logistics grew 2.7 percent, that's 1.5 percentage points lower than last year.

Experts say a decline in demand has kept transportation and storage prices at low levels and that will help make the sector more economical.

He also said, "The price drop is firstly because of a drop in demand, but on the other hand, it does reflects the fact that the logistics sector is having fierce competition, driving the overall prices lower."

Experts say logistics companies can enjoy lower costs under the current industry cycle, but only by raising service levels and efficiency can companies survive competition in the future.

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