The China Federation of Logistics and Purchasing released the analysis of logistics operation from January to June 2024. In the first half of the year, the total social logistics amount was 167.4 trillion yuan, an increase of 5.8% year-on-year in comparable prices. The first and second quarters increased by 5.9% and 5.7%, respectively, continuing the fast growth trend since the fourth quarter of last year. In the first half of the year, the total revenue of the logistics industry was 6.3 trillion yuan, an increase of 3.7% year-on-year. From the perspective of logistics scale, the logistics market has entered a period of accelerated transformation as logistics demand growth accelerates.

In the first half of the year, the total air transportation turnover was 70.3 billion ton-kilometers, a year-on-year increase of 32.2%, an increase of 11.9% compared to the same period in 2019. Among them, the domestic route completed 47.04 billion ton-kilometers, a year-on-year increase of 16.0%, an increase of 16.5% compared to the same period in 2019. The international route completed 23.26 billion ton-kilometers, a year-on-year increase of 84.1%, an increase of 3.7% compared to the same period in 2019. The domestic and international transportation markets of air transportation maintained high-speed growth.

Original text:

The pace of transformation in upstream and downstream logistics demand and supply upgrades has accelerated.

- Logistics Operation Analysis from January to June 2024

China Federation of Logistics and Purchasing

China Logistics Information Center

In the first half of 2024, the overall operation of the national economy was generally stable, and the logistics demand continued to recover steadily. Since the second quarter, the transformation and upgrading of logistics services have been accelerated, which has helped to further open up the economic circulation and keep the overall logistics costs stable and downward.

I. The steady growth trend of logistics demand has accelerated the transformation of new and old driving forces.

In the first half of the year, the total social logistics amount was 167.4 trillion yuan, an increase of 5.8% year-on-year in comparable prices. The first and second quarters increased by 5.9% and 5.7%, respectively, continuing the fast growth trend since the fourth quarter of last year. Compared with the same period last year, the total amount of social logistics still maintained good growth resilience, and the growth trend of each month was relatively stable, indicating that the logistics demand and economic recovery were basically synchronized, and the steady and coordinated recovery had a good foundation. From the perspective of logistics structure, the logistics of industrial products and agricultural products maintained steady growth, and the two together accounted for more than 80% of the total social logistics amount, driving the total social logistics amount to increase by 4.9 percentage points. To provide solid logistics support for important areas such as summer grain supply and industrial production. As the green recycling transformation continues to deepen, the logistics of renewable resources have maintained fast growth, with growth rates significantly higher than other areas; the logistics total amount of consumption and imports has slightly pulled back, and the momentum of growth has slowed slightly compared to the previous period. Specific analyses indicate that various fields have shown upgrading trends in different dimensions, and the transformation of new and old momentum is steadily advancing. Each field has the following characteristics:

From the perspective of logistics structure, the logistics of industrial products and agricultural products maintained steady growth, and the two together accounted for more than 80% of the total social logistics amount, driving the total social logistics amount to increase by 4.9 percentage points. To provide solid logistics support for important areas such as summer grain supply and industrial production. As the green recycling transformation continues to deepen, the logistics of renewable resources have maintained fast growth, with growth rates significantly higher than other areas; the logistics total amount of consumption and imports has slightly pulled back, and the momentum of growth has slowed slightly compared to the previous period. Specific analyses indicate that various fields have shown upgrading trends in different dimensions, and the transformation of new and old momentum is steadily advancing. Each field has the following characteristics:

From the perspective of logistics structure, the logistics of industrial products and agricultural products maintained steady growth, with total logistics revenue of industrial products increasing by 5.8% year-on-year in the first half of the year, and maintaining a level of around 6% in the first and second quarters of the year, continuing the fast growth trend since the fourth quarter of last year. Among them, industrial upgrading led to the acceleration of new and old energy in industrial logistics. In the first half of the year, the high-tech manufacturing industry increased by 8.7% year-on-year, an increase of 1.2 percentage points faster than the first quarter. In particular, the production of communication terminal equipment manufacturing, integrated circuits, and digital product manufacturing achieved double-digit growth, and the proportion of intelligent equipment and upgrading manufacturing products in industrial logistics gradually increased.

From the perspective of logistics structure, the logistics of industrial products and agricultural products maintained steady growth, with total logistics revenue of industrial products increasing by 5.8% year-on-year in the first half of the year, and maintaining a level of around 6% in the first and second quarters of the year, continuing the fast growth trend since the fourth quarter of last year. Among them, industrial upgrading led to the acceleration of new and old energy in industrial logistics. In the first half of the year, the high-tech manufacturing industry increased by 8.7% year-on-year, an increase of 1.2 percentage points faster than the first quarter. In particular, the production of communication terminal equipment manufacturing, integrated circuits, and digital product manufacturing achieved double-digit growth, and the proportion of intelligent equipment and upgrading manufacturing products in industrial logistics gradually increased.

From the perspective of logistics structure, the logistics of industrial products and agricultural products maintained steady growth, with total logistics revenue of industrial products increasing by 5.8% year-on-year in the first half of the year, and maintaining a level of around 6% in the first and second quarters of the year, continuing the fast growth trend since the fourth quarter of last year. Among them, industrial upgrading led to the acceleration of new and old energy in industrial logistics. In the first half of the year, the high-tech manufacturing industry increased by 8.7% year-on-year, an increase of 1.2 percentage points faster than the first quarter. In particular, the production of communication terminal equipment manufacturing, integrated circuits, and digital product manufacturing achieved double-digit growth, and the proportion of intelligent equipment and upgrading manufacturing products in industrial logistics gradually increased.

From the perspective of logistics structure, the logistics of industrial products and agricultural products maintained steady growth, with total logistics revenue of industrial products increasing by 5.8% year-on-year in the first half of the year, and maintaining a level of around 6% in the first and second quarters of the year, continuing the fast growth trend since the fourth quarter of last year. Among them, industrial upgrading led to the acceleration of new and old energy in industrial logistics. In the first half of the year, the high-tech manufacturing industry increased by 8.7% year-on-year, an increase of 1.2 percentage points faster than the first quarter. In particular, the production of communication terminal equipment manufacturing, integrated circuits, and digital product manufacturing achieved double-digit growth, and the proportion of intelligent equipment and upgrading manufacturing products in industrial logistics gradually increased.

The environment for logistics development offers both opportunities and challenges, assisting in reducing costs and increasing efficiency of circulation.

Modern logistics policy support system is more perfect. In the first half of 2024, macro and logistics policies will work together to continuously reduce taxes, reduce costs, and help enterprises to relieve difficulties. This not only boosts the logistics demand, but also continues to promote the optimization of logistics business environment, improving the connection between logistics supply and demand and further stimulating the vitality of market entities. The Notice on Key Tasks of Cost Reduction in 2024 issued by the National Development and Reform Commission and other departments pointed out that it is necessary to promote the improvement of modern logistics system and adjust and optimize transportation structure to promote the improvement of quality and efficiency of logistics industry. The Notice on the Action Plan for Large-scale Equipment Replacement in Transportation issued by the Ministry of Transport and other departments lays a policy foundation for improving the supply efficiency of the logistics industry. The Decision of the Central Committee of the Communist Party of China on further deepening comprehensively reform and promoting the modernization of China clearly proposed to improve the circulation system, accelerate the development of the Internet of Things, improve the integrated circulation rules and standards, and reduce the logistics costs of the whole society. This puts forward higher requirements for reducing costs and increasing efficiency at various links in economic circulation and high-quality development of logistics.

The construction of logistics infrastructure is continuously promoted. The construction of logistics infrastructure in China is steadily progressing in two aspects, namely, accelerating the integration and construction of logistics hub resources mentioned in the "14th Five-Year Plan for Modern Logistics Development" and building domestic and international logistics channels. It also strengthens the cross-mode connection of logistics hubs, cross-regional linkage and cross-domain integration. In the first half of the year, the national fixed asset investment in transportation reached 1.7 trillion yuan. Among them, the investment in highways and water transport completed 1.2 trillion yuan and 102.5 billion yuan respectively. Railway fixed asset investment reached 337.3 billion yuan, a year-on-year increase of 10.6%. Chinese enterprises' non-financial direct investment in countries participating in the Belt and Road Initiative was US$15.46 billion, a year-on-year increase of nearly 10%.

The total social logistics cost is stable with a downward trend. In the first half of the year, the total social logistics cost was 8.8 trillion yuan, a year-on-year increase of 2.0%, which is 0.7 percentage points lower than the growth rate in the first quarter, lower than the total social logistics and GDP growth rates during the same period. The ratio of total social logistics cost to GDP was 14.2%, a 0.2 and 0.3 percentage point decrease from the first quarter of this year and the first half of 2023, respectively. In terms of the composition of total social logistics costs, the ratio of transportation costs to GDP decreased by 0.1 percentage points year-on-year, the ratio of storage costs to GDP decreased by 0.2 percentage points, and the ratio of management costs remained basically the same.

Transportation links: the supply of intermodal services is becoming more abundant. In terms of services, railway transportation has developed 17 new container types such as coil steel boxes, grain boxes, and hazardous liquid tank boxes, and vigorously developed multimodal transportation, actively promoted the "single order system" and "single box system" for multimodal transportation. In June, the national railway sent container, commodity automobile, and cold chain cargo volumes increased by 18.0%, 12.1%, and 21.2% year-on-year, respectively, all reaching new highs in the same period in history. The cross-mode linkage level in some regions has been improved, such as the implementation of the "ship-rail direct transfer" operation mode for iron ore at Qingdao Port, which directly connects the unloading operation line with the railway loading operation line, shortening the time from arrival to loading from 7 days to 2 days, greatly improving the transportation efficiency, and reducing the total freight cost.

Storage links: logistics turnover connection is getting closer. Judging from the trend this year, the inventory level is generally in a downward phase of fluctuation. As of June, the end-of-period inventory index in China's warehousing index was 48%, which remained in the contraction interval throughout the year and showed that the inventory level of most fields in circulation is relatively low. From upstream data, the proportion of inventories of industrial enterprises above designated size has slowed down. As of the end of May, inventory increased by 3.1% year-on-year, and the proportion of raw materials and other inventory has slowed down, indicating that the supply of warehousing and logistics is more reliable and efficient, and the expectations for the stability of the supply chain in both upstream and downstream fields are stable. Inventory levels of raw materials and other goods in most fields are slow.

Logistics supply is accompanied by industrial improvement, and the operating situation in various fields is good.

In the first half of the year, the total revenue of the logistics industry was 6.3 trillion yuan, a year-on-year increase of 3.7%. From the scale of logistics, the logistics market has entered an accelerated transformation period with the turning of driving forces as logistics demand increases.

From the perspective of domestic and international circulation, the radiation range of intermodal transportation by rail and sea is continuously expanding, and the multi-link express trains connecting inland logistics node cities have covered provincial capital cities, and the rail-sea express trains connecting ports and inland cities have covered major ports throughout the country. In the first half of the year, the predicted rail-sea intermodal transportation container volume at ports exceeded 5 million TEUs, a year-on-year increase of 17%; the volume of rail-sea transportation continued to maintain a stable growth trend. The scale of China-Europe freight trains has steadily expanded, with a total of 1,719 trains and 0.18 million TEUs of goods sent, a year-on-year increase of 15% and 11%, respectively.

In terms of specific fields, basic logistics services such as transportation and warehousing are transforming into comprehensive services. The industries of people's livelihood and high-efficiency upgrading still maintain a relatively fast growth. The operating situation in various fields is good.

Firstly, e-commerce logistics business has made a high rebound, and rural business has accelerated its expansion. In the first half of the year, the average operation index of e-commerce logistics was 113.1 points, the average business volume index was 127.4 points, and the average rural business volume index was 128.5 points, all exceeding the average level of 2023. The physical commodity online retail sales increased by 8.8%, and new models such as live-streaming and instant delivery emerged constantly. In June, with the support of the '6.18' e-commerce shopping festival, the total business volume and rural business volume of e-commerce logistics achieved a year-on-year growth of over 30%, and e-commerce logistics companies proactively explore new models to fully guarantee the delivery needs of businesses and consumers by reserving transportation and distribution resources in advance, increasing the application of intelligent technologies and providing customized services, and the supply capacity is further released.

Secondly, air cargo has reached a new high in recent years. In the first half of the year, the total turnover of air transportation was 70.3 billion ton-kilometers, a year-on-year increase of 32.2%, and an increase of 11.9% from the same period in 2019. Among them, domestic routes completed 47.04 billion ton-kilometers, a year-on-year increase of 16.0%, an increase of 16.5% from the same period in 2019; international routes completed 23.26 billion ton-kilometers, a year-on-year increase of 84.1%, an increase of 3.7% from the same period in 2019. The domestic and international markets of air transport have maintained high-speed growth. At the same time, supporting airport logistics maintained a good trend, and cargo throughput exceeded that of the same period in 2019. The four major airport clusters of Jing-Jin-Ji, the Yangtze River Delta, the South China Greater Bay Area, and Chengdu-Chongqing operated efficiently, with a throughput growth rate of double digits.

Thirdly, the shipping market's volume and price both rose. In the first half of 2024, the Red Sea crisis caused ships to bypass their route, combined with the effect of Europe and the United States restocking, the overall shipping market increased. In the first half of the year, the Clarkson Shipping Index had an average of 25498 US dollars per day, increasing by 5.7% year-on-year, reaching a new second-high level. A total of 1170 new ships, with 71.698 million deadweight tons, were traded globally in the first half of 2024. Calculated by deadweight tonnage, this was an increase of 15.5% year-on-year, higher than the scale of the same period in 2022 and 2023. In the first half of the year, the number of ships entering and leaving coastal and inland ports in China reached 15.2117 million, and the cargo throughput reached 9.184 billion tons, with a year-on-year increase of 14.35% and 4.85%, respectively. Shipping trade is booming, and China's domestic and international circulations are running smoothly.

Fourthly, the competition pattern of the logistics industry is intensifying, and enterprises focus on innovative development models. Since this year, China's logistics market has steadily expanded, and the competition pattern in the segmented areas continues to intensify. According to the survey data of key companies, the key enterprise logistics business revenue increased by 2.1% year-on-year in the first half of the year, and the monthly income changes fluctuated significantly year-on-year. A continuous recovery trend has not yet appeared, indicating that the micro-subjects in logistics operations are facing significant challenges and uncertainty. The various segmented areas are undergoing a critical period of transformation and upgrading, and enterprises are continuously exploring and expanding various means to enhance their competitiveness and innovation capabilities and to shift towards the integration with supply chains.

Firstly, logistics enterprises deepen their integration with industries to help achieve business growth. Currently, logistics companies actively cooperate with manufacturing, commerce, agriculture and other industries to deepen cooperation through establishing strategic partnerships to promote the collaborative development of upstream and downstream industrial chains and to expand the scope and boundaries of logistics services.

From the perspective of business type, it has extended from a traditional logistics service perspective towards procurement, production, and sales, and has driven the integration of the supply chain. According to the data of key enterprises, the number of supply chain contract orders in key enterprises increased by 24.4% year-on-year in the first half of the year, which increased by 1.8 percentage points from January to May. The trend of expanding the industrial chain may continue.

From the perspective of service scope, leading logistics enterprises are promoting internationalization in sync with manufacturing and other industries. The research data shows that the internationalization business of logistics enterprises is expected to continue its growth trend in the third quarter of this year. The international service sector is expected to grow well in cross-border e-commerce, automobiles, electronic machinery and other fields. Emerging market countries in Southeast Asia and other fields have great potential for the expansion of international businesses.

Secondly, logistics enterprises increase their investment in innovation to help link industry digitization. Since this year, the investment of logistics enterprises in technological innovation and digital transformation has been steadily growing, according to research data. On the one hand, logistics enterprises actively promote their own digital transformation, improve the intelligent level of logistics operations, help enterprises improve operational efficiency, and reduce operating costs. Top-tier companies such as S.F. Holding, JD Logistics, YTO Express, and COSCO Shipping have more than a thousand R&D teams, and LTL logistics enterprises such as YTO Express have saved nearly 90% of scheduling manpower costs and 20% of site resource costs through the use of digital systems.

Overall, the logistics operation was generally stable in the first half of the year, and it showed a state of steady progress, steady improvement, and steady accumulation. During the period of transition from old to new kinetic energy, logistics supply was flexibly adapted, and the main operators of the enterprise continuously improved their service and adaptability to further integrating into the supply chain and industrial chain. This helped promote the smooth circulation of the economy, further optimize the quality and structure of logistics services and achieved the effective reduction of logistics costs in the whole society. However, it should also be noted that in the second quarter, due to short-term factors such as extreme weather and frequent occurrences of floods and waterlogging disasters, some logistics indicators have slightly declined from the previous period, and some supply and demand challenges still exist. On the one hand, the new demand for logistics still faces pressure, and there is still structural differentiation.

According to the prediction of the early-warning survey, the logistics service business of manufacturing equipment, foreign trade, e-commerce, medicine, and other fields is expected to have better growth and improvement in the third quarter. However, traditional fields such as steel, building materials, and other fields expect weaker growth in logistics service businesses, and there are so far no clear signs of improvement in the business growth of the third quarter.

On the other hand, the improvement in micro-logistics main body profits is not obvious, and the profit level is still fluctuating at a low level. Since this year, under the background of slowing market demand and increasingly fierce competition, micro-entities have generally faced greater business pressure. From the perspective of operating costs, in June, the main business cost index rose by 0.2 percentage points compared to the previous month, rising across the eastern, central and western regions. The main business cost index of railways, air transport and postal express was over 55%. However, the income profit rate is still around 3.0%, and the operating cost pressures squeeze the profit space of logistics enterprises.

Looking at the future trend, China's economy is generally stable, and there is still great potential for logistics transformation and upgrading. According to the survey data of the enterprises, the proportion of enterprises with better expectations in the third quarter has steadily increased. The expected business activity index in the prosperity index has remained stable at above 55% for 4 consecutive months in the high prosperity range. The areas with higher business prosperity include e-commerce, medicine, clothing, and equipment manufacturing. Enterprise development expectations are stable and improving. In terms of policy support, the Third Plenary Session of the Twentieth Central Committee of the Communist Party of China made further arrangements for improving the circulation system, establishing an integrated set of circulation rules and standards, and reducing the logistics costs of the whole society, which will also promote the continued optimization of the logistics business environment and help various logistics fields to accelerate their integration and integration.

This article is selected and translated from the official website of China Federation of Logistics & Purchasing. Editor: Liu Jiayin from Cnstock.