Logistics has demonstrated strong resilience, helping the economy stabilize and rebound.

In the first half of the year, driven by sectors such as industry and consumer spending, logistics demand improved significantly, and the market demonstrated robust growth. Total logistics demand across the economy expanded by 3.1%, while total revenue in the logistics sector increased by more than 6%.

In the first half of 2022, amid a complex and challenging macroeconomic environment and sporadic outbreaks across multiple locations, the logistics sector as a whole rose to the occasion, overcoming difficulties to ensure the steady functioning of the national economy. Particularly during the second quarter, when both supply and demand faced severe disruptions, logistics enterprises worked tirelessly to maintain smooth operations and facilitate the flow of goods, stabilize production, and safeguard people’s livelihoods—laying a solid foundation for stabilizing growth and fostering recovery in industrial and supply chains. In the first half of the year, driven by sectors such as industry and consumer spending, logistics demand improved significantly, and the market demonstrated robust growth: total social logistics demand increased by 3.1%, while the logistics industry’s total revenue expanded by more than 6%.

Operations are stabilizing and rebounding.

Logistics demand is accelerating its recovery.

(1) The recovery of logistics demand has demonstrated strong resilience.

In the first half of the year, the total social logistics volume nationwide reached RMB 159.6 trillion, up 3.1% year on year at comparable prices—a 0.1 percentage-point improvement over the January–May period—indicating an overall steady recovery in logistics demand. Overall, since April, the international environment has remained complex and challenging, domestic COVID‑19 outbreaks have been frequent and sporadic, and downward pressure on the economy has intensified. Against this backdrop, the total social logistics volume managed to post positive growth despite these headwinds.

From a quarterly perspective, logistics demand in the second quarter was weighed down by pandemic-related factors, leading to a sharp deceleration in growth—down 5.3 percentage points from the first quarter. On a monthly basis, April saw a pronounced pullback in logistics demand due to the pandemic and other factors. As epidemic control measures continued to improve and a series of policies aimed at stabilizing growth began to take effect, the year-on-year growth rate of total social logistics volume stabilized and rebounded in May and June, with June posting a 3.6% increase—the highest level since the start of the second quarter.

In comparison with GDP, the growth rate of total social logistics volume in both the first half of the year and the second quarter outpaced that of GDP. Despite being weighed down by unexpected factors such as a complex and challenging international environment and domestic COVID‑19 outbreaks, the scale of logistics demand remained substantial. The sector’s long‑accumulated material foundation and the clear advantages of an ultra‑large market size have provided strong support, with continued recovery in logistics helping to stabilize and bolster economic growth.

Figure: Comparison of the Year-on-Year Growth Rates of Total Social Logistics and GDP

By sector, industrial goods logistics demand has been steadily recovering, while logistics demand related to consumer spending has maintained positive growth. Together, these two components contributed 2.7 percentage points to the overall growth of total social logistics, accounting for nearly 90 percent of the increase. Meanwhile, logistics demand for recyclable resources—reflecting reverse logistics—has sustained a robust annual growth rate of around 30 percent.

(II) The supporting role of industrial logistics demand has strengthened.

In April, industrial production came under significant pressure due to the sudden outbreak, with logistics demand falling 2.9% year-on-year to a temporary low. As China’s epidemic control situation improved overall and policies aimed at stabilizing growth were progressively implemented, industrial production gradually stabilized and rebounded, with the growth rate of industrial logistics demand rising for two consecutive months in May and June. Overall, in the first half of the year, the total value of industrial goods logistics increased by 3.4% year-on-year, maintaining steady growth; however, the pace of expansion remained below that of typical years, and further recovery is needed.

The trend of industrial upgrading persists, with robust growth in logistics demand driven by new growth drivers. New drivers and emerging business models continue to expand at a brisk pace. In the second quarter, logistics demand for high‑tech manufacturing rose 5.7% year on year, outpacing the overall industrial logistics volume by 5.0 percentage points. Logistics demand in sectors such as lithium‑ion batteries, electronic components, and integrated circuits all posted growth rates exceeding 20%, underscoring the continued leading role of these new growth engines.

(3) Logistics demand for consumer goods remains on a steady growth trajectory.

In the first half of the year, the total volume of goods logistics for enterprises and households increased by 2.7% year on year, with the growth rate broadly in line with that of January–May. In June, consumer‑related logistics demand continued its recovery, supporting steady growth in logistics for daily‑life goods; however, the consumer market remained under sustained pressure in the first half, and the growth rate of total goods logistics for enterprises and households remained significantly below pre‑pandemic levels.

In the first half of the year, nationwide online retail sales of physical goods rose 5.6% year on year, accounting for 25.9% of total retail sales of consumer goods—up one percentage point from January–May. This indicates that, amid the pandemic, consumer habits have shifted online, with the share of e‑commerce continuing to grow. The postal and express delivery sector, closely tied to online shopping, maintained overall growth: in the first half, the national volume of postal and express deliveries exceeded 51 billion parcels, up 3.7% year on year, while rising demand for new‑format logistics has provided strong support for safeguarding people’s livelihoods.

(4) Divergence in the logistics of bulk commodity imports has emerged.

Commodity prices, after reaching elevated levels, have begun to moderate, while import logistics volumes have continued to decline. In the first half of the year, the total value of import logistics fell 7.3% year on year, with the decline widening compared to the January–May period. Since June, domestic demand has remained in a recovery phase, and, compounded by the high base effect, the total value of import logistics contracted 12.0% year on year.

From the perspective of the structure of import logistics volumes, commodity imports have shown mixed performance. In the first half of the year, imports of iron ore and copper products improved slightly, while declines in crude oil and coal deepened further. Imports of industrial manufactured goods remained largely unchanged, as downstream demand has yet to fully recover; sectors such as automobile manufacturing are still in a recovery phase, and the import volumes of machine tools, automotive chassis components, integrated circuits, and other items continue to trend downward. 2

Policy implementation continues.

Accelerate the enhancement of supply capacity

Since April, various departments have steadily advanced the implementation of policies aimed at stabilizing growth and ensuring smooth and unimpeded logistics. On the one hand, regional travel‑restriction policies have been actively enforced: transit limits for freight vehicles in low‑risk areas have been lifted, logistical bottlenecks in manufacturing and distribution have been addressed, and support for logistics hubs, infrastructure, and logistics enterprises has been strengthened, thereby safeguarding the smooth flow of domestic circulation. On the other hand, government agencies have introduced targeted measures to ensure seamless customs clearance for foreign trade, facilitate rapid clearance for exporting firms, and boost the efficiency of international logistics, thus facilitating the smooth operation of global supply chains.

(1) Logistics revenue continues to expand, and business sentiment is accelerating its recovery.

In the first half of the year, the logistics industry’s total revenue reached RMB 6.0 trillion, up 6.1% year on year, with the growth rate accelerating by 0.3 percentage points compared to January–May. This indicates that policies aimed at ensuring smooth and unimpeded logistics are beginning to yield results, as logistics supply is recovering more rapidly and the market size is showing strong signs of recovery. In terms of recovery momentum, transportation‑related logistics revenues have emerged as the primary driver, with rail, waterway, and multimodal transport all posting robust growth and making a significant contribution to the overall expansion of the logistics sector’s total revenue.

In the first half of the year, the logistics industry’s prosperity index averaged 49.4%. In the second quarter, affected by sudden outbreaks, the average index fell to a recent low of 48.4%. As previously accumulated logistics demand continued to be released and work and production resumed steadily, the logistics prosperity indices for May and June rebounded for two consecutive months, with the pace of recovery accelerating. In June, the business volume index stood at 52.1%, up 2.8 percentage points from the previous month, reaching one of the highest levels so far this year.

(II) Logistics supply and demand are steadily recovering, with service prices remaining stable while trending upward.

In the first half of the year, logistics service prices fluctuated and rebounded, with mixed trends across different modes. In maritime shipping, international freight rates remained elevated due to the pandemic; particularly since June, as the Yangtze River Delta fully resumed work and production, port container throughput recovered strongly. As a result, China’s Export Container Freight Index averaged 3,288.77 points in the first half, up 59.1% year on year. Meanwhile, coastal bulk shipping saw price declines as inventories of commodities such as coal stayed at high levels and import volumes slowed. China’s Coastal Bulk Freight Index averaged 1,110.69 points in the first half, down 11.7% year on year. On the road transport front, with the epidemic situation continuing to improve in June and measures to ensure smooth logistics and unimpeded flow steadily implemented, both supply and demand improved in tandem, driving freight rates higher while remaining generally above the level of the same period last year. China’s Road Logistics Freight Index averaged 100.9 points in the first half, up 1.0% from the same period last year. Looking at the intra‑year trend, the indices for the first and second quarters were 99.7 and 102.1 points, respectively, with the second quarter posting a month‑on‑month increase of 2.4%. This pattern is broadly consistent with previous years, though the magnitude of the rebound has widened slightly, partly driven by persistently high oil prices.

Operations continue to face significant challenges.

The vitality of market entities remains to be strengthened.

(1) Logistics demand remains relatively weak, and the momentum for recovery still needs to be strengthened.

From an external perspective, the momentum of global trade growth has weakened, with the China Federation of Logistics and Purchasing’s Global Manufacturing PMI new export orders index remaining below 50% for four consecutive months. Internally, in June, more than half of enterprises still reported insufficient market demand, indicating that the recovery of market demand in certain sectors continues to lag behind.

From a structural perspective, demand in subsectors such as basic chemicals and mechanical‑electrical equipment manufacturing, as well as in certain regions where logistics have been affected by the pandemic, remains on a downward trajectory and has yet to fully recover. Across industries, the recovery of logistics demand and business volume is uneven: sectors like road transport, warehousing, and express delivery are showing strong momentum, while aviation and pipeline transport remain relatively sluggish. Overall, although total social logistics volume posted consecutive month‑on‑month gains in May and June, growth remains subdued and has not yet returned to pre‑pandemic levels, suggesting that sustained and stable recovery in future logistics demand will continue to face considerable pressure.

(2) Supply chain operations have not yet fully resumed, and logistics costs continue to rise.

In the first half of the year, total social logistics costs rose 6.1% year on year, outpacing the growth rates of both total social logistics volume and GDP during the same period. The ratio of total social logistics costs to GDP stood at 14.8%, up 0.1 percentage point from the first quarter of this year and from the first half of 2021. Overall, since April, logistics operations have yet to return to normal levels due to the pandemic, with logistics costs remaining elevated. Moreover, the coordination of supply chains and industrial chains during the recovery phase still requires further improvement.

From the perspective of changes in cost composition, the share of the transportation segment declined by 0.5 percentage points compared with the same period last year, while the storage segment increased by 0.7 percentage points, indicating that, in the current economic environment, logistics activities have contracted, coordination between production and sales in the manufacturing and distribution sectors remains sluggish, and overall social inventories have risen. Specifically:

First, although the transportation sector was temporarily affected by the pandemic, it has rebounded relatively quickly, demonstrating strong resilience. By mode of transport, railway freight volumes have maintained robust growth since 2022; in particular, China–Europe Railway Express services have overcome multiple challenges to ensure safe and stable operations, with a cumulative total of 7,514 trains and 724,000 TEUs shipped in the first half of the year, and monthly train departures remaining above 1,000 for 26 consecutive months. Road freight traffic experienced some setbacks but has gradually returned to normal levels since June. Meanwhile, waterborne logistics efficiency has steadily improved, with the “linked loading and unloading” model between ocean-going vessels and Yangtze River inland shipping vessels advancing steadily; since June, port throughput and service quality at Shanghai, Nantong, and other ports have seen significant enhancements.

Second, social inventories remain at elevated levels, and the linkage between production and sales has yet to fully recover. By the end of May, inventories held by industrial enterprises above designated size approached RMB 16 trillion, maintaining a robust year-to-date growth rate of 16–17%. The inventory-to-revenue ratio rose by 2 percentage points compared with the same period last year, reaching one of its highest levels in recent years. Meanwhile, the turnover of finished goods inventories continued to decelerate, lengthening by 1.3 days year-on-year and by 0.2 days from the end of March. The persistence of high inventory levels and the slowdown in finished‑goods turnover indicate that the supply chain connecting upstream and downstream producers and consumers has not yet fully rebounded from the impact of the pandemic.

(3) Profits of logistics enterprises have not shown any significant improvement.

Since the beginning of this year, logistics operations have been affected by multiple factors, leading to significant fluctuations in corporate performance. Since May, key logistics enterprises have seen improvements in both business scale and growth rates; however, since June, operating costs have risen sharply across the board, while profit margins and overall profitability have remained largely unchanged.

First, logistics enterprises maintained steady revenue growth. In the first half of the year, key companies reported an increase in logistics revenue, up 7.1% year on year, with the growth rate accelerating by 0.4 percentage points compared to the first quarter. By sector, supply-chain and warehousing firms posted robust growth in logistics revenues, outpacing transportation companies. Among transportation firms, waterway carriers continued to enjoy strong momentum, while road transport operators reversed a previous decline and began to recover.

Figure: Growth in Logistics Revenue of Key Logistics Enterprises in the First Half of 2022

Second, operating costs for logistics enterprises continue to rise. In the first half of the year, these costs increased markedly: from January to June, the cost per 100 yuan of revenue among key enterprises kept climbing, up 1.6% year on year—4.6 percentage points higher than the increase recorded from January to May. Particularly since June, as logistics firms have entered a recovery phase and previously accumulated demand has been released in a concentrated burst, operating expenses have surged. Notably, labor costs, raw material and fuel expenses, and pandemic‑control expenditures have all risen sharply. Since June, oil prices have fully entered the “nine-yuan era,” surging more than 30% compared with the start of the year, with especially pronounced cost increases in sectors such as waterway, air, and road transport.

Third, logistics enterprises continue to face substantial operational pressures. In the second quarter, cost‑push inflation intensified, yet high costs—such as fuel and labor—have not been promptly passed on to market prices. This is particularly true in sectors with highly homogeneous services, like road transport, where price recovery has lagged significantly; in May and June, the increase in China’s road freight rate index fell far short of the rise in fuel prices. Against this backdrop, profit margins for logistics firms have come under further strain, with year‑on‑year profits continuing to decline. Notably, industries such as air and road transport, where fuel costs account for a large share of total expenses, have seen even sharper declines in profitability.

Looking ahead, as efforts to effectively balance epidemic prevention and control with economic and social development gain momentum, the impact of policies and measures aimed at stabilizing the economy continues to unfold, suggesting that the national economy will remain within a reasonable range and that logistics demand is likely to rebound in tandem. However, in the third quarter, with the increasing influence of extreme seasonal factors such as high temperatures and the rainy season, logistics activity will enter its traditional off‑peak period. Coupled with ongoing pandemic risks and other uncertainties, operational efficiency is expected to become more volatile. Going forward, it will be essential to fully implement policies designed to ensure smooth and unimpeded logistics flows, address bottlenecks in industrial and supply chains, and maintain steady growth across the year in logistics demand, logistics revenue, and business scale. Total social logistics volume is projected to expand by approximately 4%–6% for the full year.