The State Council executive meeting held on May 11th discussed effective measures to reduce logistics costs throughout society. The meeting proposed that modern logistics connects the primary, secondary, and tertiary industries, connecting production and consumption, domestic and foreign trade, and reducing logistics costs throughout society is beneficial for improving economic efficiency. We need to further optimize the structure of goods transportation, vigorously develop multimodal transportation, deepen the reform of comprehensive transportation system, railway freight, commercial circulation, etc., promote the digital and green transformation of logistics, fill the gaps in bulk commodity logistics, cold chain logistics, rural logistics, etc., and comprehensively promote the substantial reduction of logistics costs.
Liu Xiangdong, Deputy Director of the Economic Research Department of the China International Economic Exchange Center, told Securities Daily that modern logistics connects production and consumption, is an important support for extending industrial chains, enhancing value chains, and building supply chains, and is an important lever for promoting smooth circulation of the national economy. Reducing the logistics costs of the entire society is an inevitable requirement for building a unified national market.
"Taking effective measures to further reduce social logistics costs can link production and consumption on a larger scale, expand the scope of transactions, promote deepening of division of labor, improve production efficiency, promote wealth creation, and improve economic operational efficiency, promote reform and innovation of the circulation management system, accelerate the construction of a modern circulation system, and promote high-quality economic development," Liu Xiangdong said.
According to data released by the China Logistics Information Center, the total social logistics cost in the first quarter was 4.3 trillion yuan, a ratio of 14.4% to GDP, a decrease of 0.2 percentage points compared to the same period last year and the fourth quarter.
From a structural perspective, transportation costs account for 53.0% of the total social logistics costs, storage costs account for 34.2%, and management costs account for 12.8%. Among the three costs, the storage process has steadily decreased, while the transportation and management processes have slightly improved. The social logistics process has shifted from static to dynamic, and operational efficiency has steadily increased.
From the perspective of warehousing and logistics, the average inventory turnover index in March was 55.8%, an increase of 13.6 percentage points from the previous month. With the recovery of demand, the efficiency of warehousing and logistics turnover has rapidly rebounded. From the perspective of industrial warehousing turnover, the proportion of inventory in operating revenue of industrial enterprises above designated size decreased by 3 percentage points at the end of February, and the turnover days of finished product inventory decreased by 0.5 days year-on-year.
"The proportion of industrial inventory has been steadily decreasing, helping to improve the overall inventory level of society. The proportion of related capital occupation, warehousing and logistics storage costs has also decreased." Meng Yuan, Deputy Director of the Logistics Statistics Department of the China Logistics Information Center, said that overall, with the implementation of policies related to large-scale equipment updates and consumer goods trade in action plans, coupled with the central government's repeated proposals to effectively reduce logistics costs throughout society, logistics operations will continue to recover in a positive trend.
However, it is worth noting that the situation of enterprises increasing revenue but not increasing profits still exists. Hu Han, an analyst at China Logistics Information Center, told Securities Daily that it is necessary to continue to boost the business vitality of enterprises and implement targeted measures to alleviate the tight cash flow situation.
When it comes to how to coordinate and promote the substantial reduction of logistics costs, Liu Xiangdong said that to accelerate the substantial reduction of social logistics costs, on the one hand, it is necessary to coordinate and promote the planning, construction, and upgrading of urban commercial facilities, logistics facilities, and transportation infrastructure, promote the digital, intelligent, and green transformation of the logistics industry, break through the flow barriers of goods and factors between regions, and achieve the integration and connectivity of national logistics facilities and the rational layout of logistics hubs; On the other hand, we need to accelerate the improvement of the logistics trading market system, build national and regional commodity trading platforms, cultivate new industries, new formats, new models, and new driving forces for the development of logistics and supply chains, promote logistics enterprises to reduce costs and increase efficiency, create more convenient and reliable international logistics channels, and build a green closed-loop supply chain.