What truly constitutes the core competitiveness of the large‑item logistics industry?

Release date:

2021-04-29

Author:

Jinhua Logistics

In recent years, major express delivery companies have accelerated their expansion into the large‑item logistics sector, and with product and service homogenization intensifying, competition has become increasingly fierce. How to transform and upgrade has thus become a common challenge facing the industry. He Dengcai, vice president of the China Federation of Logistics and Purchasing, told a Cailian Press reporter, “No matter how we transform, demand remains at the core. Only by extending our services, deeply integrating with industries, and becoming organizers of industrial and supply chains as well as enhancers of value chains can we unlock new growth opportunities for the sector.” Due to the unique characteristics of size and weight, large‑item logistics differs significantly from small‑ and medium‑sized parcel delivery. It features longer service chains, higher professional requirements, and complex warehousing management—factors that, to some extent, raise the barriers to entry in this market. As a result, large‑item logistics has become an important avenue for leading express delivery firms to build competitive moats and explore business diversification. In recent years, freight and express companies with scale and financial strength have steadily entered the field, further intensifying competition in the large‑item logistics sector. Reportedly, in trunk‑line transportation, price wars among players have reached a boiling point, particularly since 2021, when some companies have pursued rapid revenue growth by accepting orders even below cost, placing considerable pressure on the industry. Many industry insiders agree that product homogenization is one of the sector’s most pressing challenges. Currently, the dominant business models include trunk‑line transport, warehousing and distribution, and last‑mile delivery, yet service standards remain uneven across the board. On the demand side, the large‑item logistics market boasts enormous potential, creating a stark contrast with the intense competition prevailing within the industry. Supply chain management services refer to the design, planning, control, and optimization of logistics, commercial flows, information flows, and capital flows throughout the supply chain, leveraging modern information technologies. These services integrate previously fragmented functions—such as order management, procurement execution, customs clearance and tax rebates, logistics management, financing, data management, trade operations, and settlement—into a unified, end-to-end solution. “Extending the supply chain” is set to become a major trend. With vast market potential on one hand and fierce competition on the other, how can the industry break through its current impasse and open up new avenues for growth? A review of available materials reveals that the sector’s exploration of new business models currently falls into two main directions: one involves horizontal replication across industries, expanding the number of business segments; the other entails vertical extension along the supply chain, deepening integration with related industries at both B‑to‑B and B‑to‑C levels to deliver scenario‑based services to customers and consumers. Commenting on these industry-wide efforts, He Dengcai stated, “The convergence of the industrial internet and the consumer internet is undoubtedly the way forward. From front‑end R&D, raw materials, and components, through production, to sales—covering commercial flows, logistics, information flows, and even capital flows, culminating in final recycling—fully connecting the entire value chain presents tremendous opportunities, but also poses a formidable challenge.”

In recent years, major express‑delivery companies have accelerated their expansion into the large‑item logistics sector, and with product and service homogenization intensifying, competition has grown increasingly fierce. How to achieve transformation and upgrading has become a shared challenge across the industry. He Dengcai, vice president of the China Federation of Logistics and Purchasing, told a reporter from Cailian Press, “No matter how transformation unfolds, demand remains at the heart of the matter. Only by expanding our services, forging deep integration with industries, and assuming the roles of organizer of industrial and supply chains as well as enhancer of value chains can we unlock new avenues for growth in the sector.”

Due to the unique dimensions and weight of large‑size goods, big‑item logistics differs significantly from small‑ and medium‑sized parcel delivery. It features a longer service chain, higher professional requirements, and more complex warehouse management, which to some extent raises the barriers to entry in the large‑item logistics sector. As a result, big‑item logistics has become a key strategic option for leading express‑delivery companies to build competitive moats and explore business diversification.

In recent years, express and courier companies with scale and financial strength have steadily entered the market, intensifying competition in the large‑item logistics sector. Reportedly, in the trunk‑line transportation segment—particularly for point‑to‑point services—the industry’s price wars have reached a fever pitch. Especially… 2021 Since last year, some companies have been chasing short-term sales volumes, even accepting orders below cost, which has placed significant pressure on the industry.

Many industry insiders believe that product homogenization is one of the sector’s major pain points. At present, the industry’s business models primarily revolve around trunk‑line transportation, warehousing and distribution, and door‑to‑door delivery, with widely varying standards across these services.

On the demand side, the large‑item logistics market boasts enormous potential, creating a stark contrast with the intense competition prevailing in the industry.

Supply chain management services refer to the design, planning, control, and optimization of logistics, commercial flows, information flows, and capital flows within the supply chain, leveraging modern information technologies. These services integrate previously fragmented functions—such as order management, procurement execution, customs clearance and tax refunds, logistics management, financial facilitation, data management, trade operations, and settlement—into a unified, end-to-end solution.

“Supply chain extension” will become a development trend.

On the one hand, there is vast room for market expansion; on the other, the industry faces fierce competition. How can companies break through these challenges and unlock new avenues for growth? After reviewing available data, our reporter found that the industry’s exploration of new business models currently falls into two main approaches: one is horizontal replication across sectors, focusing on expanding the number of business segments; the other is vertical integration along the supply chain, extending upstream or downstream. B end, C End-to-end, deeply integrated with related industries, to deliver scenario-based services to customers and consumers.

Regarding the industry’s explorations, He Dengcai stated, “The convergence of the industrial internet and the consumer internet is undoubtedly the direction of the future. From front-end R&D, raw materials, and components, through manufacturing and sales, to the integration of commercial flows, logistics, information flows, and even financial flows—and ultimately, recycling—seamlessly connecting the entire value chain presents vast opportunities, yet it remains a formidable challenge.”