Market Access Report: Logistics

Jones Day

China's imports and exports surged to US$620 billion in 2002, ranking fifth in the world. Logistics costs related to the acquisition, storage, movement and disposition of goods in China hit US$1.9 trillion in 2001, or approximately 20% of the country's GDP, compared to approximately 10% of GDP for more developed markets such as the United States. In the past three years, the majority of China's logistics service providers enjoyed revenue increases of more than 30% per year, and over 90% of multinationals in China contract at least a portion of their logistics business to third party logistics service providers. Nevertheless, the lack of an integrated multi-modal logistics industry, a shortage of skilled professionals, distribution networks that tend to be regional rather than national, and the inability of China's transportation infrastructure to keep pace with the country's economic development, continue to hinder supply chain operations in China. Internal and external inefficiencies and correspondingly high costs have been the result.