In February 2009, the logistics industry was included in the country's revitalization plan for 10 key industries – the only tertiary industry on the list.

Logistics: Part of Overall Revitalization

By staff reporter LIU QIONG

THE distance from Guangdong to Jiangsu and Shanghai is about 1,800 kilometers. Everyday Xu Hao's Longnan Logistics Company transports 10 truckloads of goods. One truck carries more than 30 tons of foodstuffs or cosmetics valued at RMB 500,000-1 million, earning a profit of tens of thousands of yuan. "It is slack season now," said Xu Hao. In the busy season from Mid-Autumn Festival to Spring Festival, his company transports an average of 15 truckloads of goods per day.

    With many years experience in the logistics industry, Xu Hao has accumulated a large number of clients. In 2009, he has obviously felt the impact of the global financial crisis, since his business has shrunk by one fourth. Xu Hao's company is a medium-sized logistics company in Shantou City, Guangdong Province, with more than 100 trucks. But competition is fierce. He told this reporter that there are several hundred similar companies in Shantou.

    "It is beyond my expectations," said Xu Hao after hearing about the approval of the inclusion of the logistics industry on the list of the 10 key industries in the revitalization plan by the State Council. "I hope this will give the logistics industry, which is in a difficult situation, opportunities to readjust and reorganize."

Stevedores working at a container wharf in qingdao in August 2007.

The Revitalization Plan

    "As an important branch of the service trade, the logistics industry is not only an important link between the nine key industries of iron and steel, automobiles, shipbuilding, petrochemicals, textiles, light industry, non-ferrous metals, equipment manufacturing and IT, but also an important link between these industries and domestic and international markets," explains Liu Tienan, deputy director of the National Development and Reform Commission.

    This assessment warmed the hearts of logistics personnel experiencing hard times. The logistics industry has felt the direct and obvious impact of the financial crisis. The bankruptcy of Shanghai's Yitong and Guangdong's Xiangying Express are examples. ZJS Express, a domestic private express leader, has also been cutting staff, since its business growth has slowed from 40 percent to 15-20 percent.

    According to statistics of the China Federation of Logistics and Purchasing (CFLP), in 2008 China's logistics volume totaled RMB 89.89 trillion, an increase of 19.5 percent year on year, but a drop of 6.7 percent in growth speed. According to Wang Zuo, deputy president of China Society of Logistics, at present more than 40 percent of the logistics enterprises report decreases in profits or even operate at a loss. In certain areas medium-sized and small logistics enterprises have begun to quit the logistics market.

    "Even though we won't see the effect immediately, we are gratified that the logistics industry has been identified as a key industry to be revitalized and its importance in economic life has thus been emphasized," Xu Hao told this reporter.

    Like other branches of the tertiary industries, for a long period of time the logistics industry has been suffering "trade discrimination." "In the eyes of many people, the logistics industry is doing nothing but transportation," complained Huang Wei, deputy president of Shunfeng Express. Before the promulgation of the revitalization plan, quite a number of people said that the probability of the logistics industry being included in the plan was low, due to its small overall scale and its minor role in stimulating the economy.