Why the cost of Chinese logistics is more than many developed countries?

According to one report from KPMG in 2012, the logistics cost occupies around 18% in the whole GDP, which is much more than many developed countries.

Why it happens? I think there are some reasons as following:

  1. The tax problem. The tax rates between the service industry and logistics industry are different. The verification of the sum of the invoice of the companies is based on quantity of the vehicles and other fixed assets which is unfavorable to the logistics enterprises.
  2. The fuel costs rise frequently that increases the cost pressure of the short-distance transport business city distribution business.
  3. The pontage and toll fee charge the transportation business a lot.
  4. The cost of human power is getting higher and higher.
  5. The management of the company it self also brings the problem of the increased costs.
  6. The whole logistic industry is in a low standard. That means lots of the private company even some personal vehicle contract for the transportation without any management.
  7. The industry structure in China is different from it in developed countries. Now the industry structure is still ordered as the industry, service, and agriculture while in developed countries the order is service, industry and agriculture. So the countries with the first industry of service get the less costs logistics costs than China with the first industry of industry.

In summary, the Chinese logistics industry is still on the way to develop more. We need more and more professional logistics personnel to improve this situation, to make the logistics industry more perfect.

One thought on “Why the cost of Chinese logistics is more than many developed countries?”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s