China earns huge revenue from its logistics industry with Road Freight accounting to >60% of total revenue, 2020- What is the future of China Logistics?

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China’s NEVs units have grown by 250-fold in past 1 decade and exceeded 1.5% of the country’s total vehicle stock in 2020, says a report by Ken Research

1. In 2020, road freight generated the highest revenue in transportation industry of china followed by sea and inland freight

China Logistics Market

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 In 2020, Road Freight accounted for nearly 75% of the total revenue generated in China Transportation Industry owing to its large network of Roads and Highways. In 2019, China pumped over RMB 3 trillion investments into the transportation sector, adding about 8,000 km of railways and over 320,000 km of highways. Road Freight Industry in China is moving towards multimodal transportation to improve efficiency and reduce energy consumption and greenhouse gas emissions.

2. Current Trends in the Road Freight Industry- Rise in Digital Technologies, Green Transportation and Increasing LTL Share.

China Logistics Market

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High penetration of mobile commerce has led to large disruption in B2B segment, due to high acceptance rate of Chinese businesses, to carry out businesses online. Success stories such as that of Manbang and Yunquna speak volumes of the success in the segment.

China has been able to reach an important milestone. By the end of 2020, it has been able to put around 5 million new energy vehicles (NEVs), including battery electric and plug-in hybrid on its roads.

Though FTL is still dominant in the country occupying more than 50% market, the ability to reduce costs, driver strain and time to deliver are the biggest reasons why companies are favoring Less than truckload (LTL) method over full truck load (FTL) shipping.

3. China has imposed a mandate on automakers requiring that electric vehicles (EVs) make up 40% of all sales by 2030.

China Logistics Market

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In 2020, out of the total NEV Vehicles plying on Chinese Roads, around 10% belonged to logistics Industry of China.

Tier 1 cities with developed logistic infrastructure such as Beijing, Shanghai, Shenzhen, Guangzhou, Suzhou etc. accounted for the largest proportion of NEV sales for logistics in China. In March 2021, Shenzhen city accounted for more than 15% of the NEV Commercial Vehicle Sales in China.

Strong Government policies such as “Three-Year Action Plan for Winning the Blue-Sky Defense War” implemented by various cities of China have boosted the adoption of NEVs in the country.

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