China logistics boom in 2012

China's logistics industry experienced boom year in 2012. That's according to the China Federation of Logistics and Purchasing. But on the downside, the agency also warns of the unfavorable environment for some of the sector's key players.

According to the fresh data released by the Federation, China's logistics volume totaled more than 177 trillion yuan, or 28.4 trillion US dollars, in 2012. That's nearly ten percent higher compared to the year earlier. The federation also notes, the rise of online retail is a major contributor to this logistics boom.

Cai Jin, Vice President, China Federation of Logistics & Purchasing, said, "Consumer related logistics have jumped by more than 23 percent. The growth is obviously faster than in other sectors. That reflects a fast growing demand in the market."

The CFLP says reducing logistics costs is a major issue that needs to be addressed. According to the agency, China's logistics costs account for around 18 percent of the country's GDP. That's almost double the levels seen in the United States and European countries.

Cai Jin, Vice President, China Federation of Logistics & Purchasing, said, "China's logistics costs' percentage in GDP is twice the levels of some developed countries. But China's modern logistics industry is lagging far behind these countries. Therefore, in this sense, China's logistics industry has much room to reduce costs and improve efficiency."

The federation also notes an unfavorable environment for logistics firms, as their profitability is being threatened by rising labor and fuel prices, and high road charges.