Where are logistics costs high and how can they be reduced?

At the 13th China Logistics Investment and Financing Conference and the 2nd Chengdu-Chongqing Regional Supply Chain Development Conference held on 26 May, Huang Qifan, vice chairman of the Finance and Economics Committee of the 12th National People's Congress and former mayor of Chongqing, pointed out as follows.

According to the National Bureau of Statistics, last year, the total cost of social logistics in China accounted for 14.7 per cent of GDP, down 1.3 percentage points compared with 16.0 per cent in 2015. But horizontally, the indicator is not only higher than that of the United States (about 7 per cent) and the European Union (about 6 per cent), but also nearly 5 percentage points higher compared with the 10 ASEAN countries, which is about 10 per cent.

"Five percentage points is 6 trillion." Huang Qifan said, "Our business enterprise profits account for about more than 10 per cent of GDP, roughly more than a trillion dollars. If the 6 trillion saved from logistics costs is turned into corporate profits, then business development will be greatly accelerated."

Logistics cost reduction and efficiency has been on the line, how to break down the task, as soon as possible to smooth the gap with neighbouring countries?

Huang Qifan analysis, last year, the composition of the total cost of 17.6 trillion social logistics, including 9.6 trillion of logistics and transport costs, more than 5 trillion of logistics and warehousing costs, as well as a variety of enterprises, departmental management costs expenditure costs totalling more than 2 trillion. Specific operational ideas can also start from these three aspects.

Logistics transport is not economic, first of all, from the transport of goods is not economic.

As Huang Qifan said, from the current stage of China's industrial industrial structure there are logistics transport is too large, too much energy consumption, waste recycling circular economy is not in place. One of the most direct problem is that, as the source of industrial industry of all kinds of raw materials used to account for a relatively high.

According to the data he gave, last year, the global amount of resources developed from underground was about 25 billion tonnes, and our country used 13 billion tonnes, accounting for roughly a little more than 50 per cent, but the industrial output value of our country is only 30 per cent of the global total value.

As our productivity has not yet reached the level of the world's industrial powers, we consume too many resources as a large industrial country, and this will be reflected in excessive logistics and transport.

In addition to the higher consumption per unit of material, there are two similar problems: on the one hand, China's energy consumption per unit of GDP is similarly high, about 1.5 times the world average; on the other hand, the recycling capacity of waste products is low, especially the recycling of all kinds of industrial products, equipment, and terminals.

Huang Qifan pointed out that China's industrial recycling rate of about 10 per cent, while economically developed countries is usually 40 to 50 per cent, which is a "huge mine".

In Huang Qifan's view, these three aspects are related to the industrial structure and productivity development goals, and the logistics system is also related. If we can effectively achieve the optimisation of the three aspects, will not only promote the "dual-carbon" goal to achieve success, but also will greatly reduce the total cost of social logistics accounted for. According to his estimation, the reduction will be in the range of 2 to 3 per cent.