Chinese logistics sectors to continue strong growth, new report claims

Despite the global slowdown in economic growth, the Chinese logistics industry is still set to experience strong growth over the next five years, according to 'China Logistics' the latest report published today by Transport Intelligence. However there will be considerable variance in rates of growth across the segments.

Fastest growing will be the Chinese International Express industry which is forecast to expand on average at around 23% a year up to 2012. This is significantly lower than in previous years, when several of the major players claimed growth rates of 35-40%. However given the economic environment this still represents significant progress and justification of the major investment plans of the leading integrators.

The Contract Logistics sector will also experience similar rates of development. Ti expects the market value to reach $22.2bn by 2011, representing an average annual compound growth rate of 21.7%. Outsourcing will be an important factor in this figure, as domestic logistics service providers increase their sophistication and foreign owned enterprises continue their penetration of the market.

The Freight Forwarding sector faces the greatest challenge, exposed as it is to the vagaries of trade volumes, the fluctuating cost of oil and highly volatile freight rates. Despite this Ti believes that the market will see annual average growth rate of about 13.5% between 2007 and 2011.

Commenting on the findings of the report, John Manners-Bell, Ti's Chief Executive said: 'Given that much of the developed world is on the brink of recession, it would be easy to write off prospects for growth in China on the false assumption that the market is solely dependent on Western consumers. Although China is certainly not completely de-coupled from its export markets, the country's economic growth – forecast this year to be 'only' 9.5% – has in recent years developed its own domestic dynamics. With the government planning to stimulate its economy further by investing in the coming year some of its huge reserves, China is a good bet to ride out the recession.'

For more information about China Logistics, follow the link, or contact Sarah Smith on ssmith@transportintelligence.com or on +44(0)1666 511880.