Logistics sector set to upgrade, introduce standards

The Commerce Ministry will promote the standardization of key logistics equipment and provide financial aid to companies whose costs rise because of the new standards, officials said on Tuesday.

"In the next one to three years, we will introduce standards for some key equipment used in commercial logistics, such as pallets and bar codes," Wang Xuanqing, deputy director-general of the Department of Circulation Industry Development at the Ministry of Commerce, said in commenting on the move during a news briefing in Beijing. He didn't say how much financial aid is available.

In 2012, the logistics costs of companies in China reached 9.4 trillion yuan ($1.54 trillion). equivalent to about 18 percent of GDP, compared with the world average of 11.2 percent, according to Wang.

The nation's logistics sector is huge partly because China's energy and other natural resources are concentrated in the western and northern regions, while manufacturing and major consumer markets are centered in the eastern and southern parts.

The low threshold for entering the industry has drawn many small and medium-sized enterprises, which account for more than 90 percent of the business, leading to low efficiency. Weak use of information technology and various fees and taxes are also to blame, Wang said.

"The logistics sector is falling behind the economy's development and the expansion of consumption. The problems of high costs and low efficiency are obvious," said Hu Suojin, deputy director-general of the ministry's General Office.

One example he gave was the cost of distributing vegetables from Beijing's wholesale produce market to neighborhoods around the city. He said that cost alone was about four times as much as the expense of transporting vegetables from farms in Shandong province, about 500 km from the capital.

Flourishing e-commerce and online shopping are also increasing the challenges for the logistics sector, Hu said.

Commerce Minister Gao Hucheng said in an interview on Monday with the Xinhua News Agency that logistics operations are fundamental to China's economic growth.

Building on the central government's decisions to deepen reforms, the ministry will make comprehensive plans for improving national supply chains, especially for consumer goods and essential services.

"Laws regulating domestic trade will be pursued to establish a unified, open market with orderly competition. We will also reform the logistics mechanism in domestic trade and build sound public facilities," Gao said.

The ministry will also build up information and data platforms to enhance its service abilities as "we lack reliable data on online shopping, and some statistics involving commercial logistics are incomplete", he added.