Logistics firms to serve clients worldwide

The involvement of logistics companies will be expanded throughout the China (Shanghai) Pilot Free Trade Zone in the foreseeable future, offering greater efficiency and flexibility.

Logistics companies in the FTZ will offer their services around the clock because their customers will come from all over the world. And Chinese players are expected to become some of the biggest names in the field.

Since the announcement of the pilot FTZ in July, the whole logistics sector has been looking with excitement at the sector's development prospects.

Although at this stage few detailed policies have been unveiled, many administrative hurdles and regulatory restrictions are likely to be removed, which will benefit all industries.

Both intermediary trade and offshore trade will take place in the FTZ plan, offering more chances for logistics firms to upgrade and diversify their services, while also providing tailored services to specific clients.

The central government plans to make the Shanghai FTZ a testing ground ahead of China's potential entry into the Trans-Pacific Partnership.

Covering an area of 28.78 square kilometers, the FTZ was launched at the end of September after receiving final approval from the State Council, China's cabinet, in August. It is located on the basis of existing bonded zones - Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area, and the Pudong Airport Comprehensive Free Trade Zone.

Although many analysts say it is hard to predict what changes the FTZ will bring about compared with the existing bonded areas, no one doubts that significant changes lie ahead.

Since the nation's first bonded area was set up in Waigaoqiao in 1990, more than 100 similar free trade zones or areas have been established in China. All of them are under the supervision of customs authorities, with the storage period for goods set at between two and five years.

Although they are exempt from certain taxes, logistics firms have been hampered until now by having to go through time-consuming customs procedures, which has limited their efficiency.

The Shanghai FTZ changes all this as customs authorities no longer serve as a watchdog poring over the certificates of companies that operate within its bounds.

Goods can also stay there without any time restrictions. The removal of standard customs and quarantine procedures will save companies considerable time and money.

As a result, logistical costs will fall by at least 30 percent, making it possible for companies in this industry to offer more value-added services and products.

The past three decades have injected new life into the Chinese economy, and the "new opening-up" should usher in deep-seated reforms for several sectors.

By providing an open, fair and transparent environment for both domestic and international players, the FTZ will operate along the principle of "survival of the fittest," pushing domestic logistics companies to speed up their consolidation and upgrade processes to stay competitive.

Chinese logistics firms have all the potential ingredients for success. The central and local governments have paid much attention to supporting the industry, and China's vast market and huge demand will guarantee that the sector sees sustained growth.