The central government is vigorously promoting the development of a modern circulation system, and the logistics and express delivery sectors still need to step up their pace.
Release date:
2020-09-11
Author:
Jinhua Logistics
The logistics sector, which connects thousands of industries, is now poised to seize new opportunities for growth. According to a Xinhua News Agency report, the Eighth Meeting of the Central Financial and Economic Affairs Commission, held on September 9, underscored the need to coordinate the development of both the physical infrastructure and digital systems of a modern circulation network, foster and strengthen internationally competitive modern logistics enterprises, and bolster freight capacity along high-speed rail lines and in international air cargo. The meeting also called for improving the modern commerce and distribution system and cultivating a group of globally competitive modern circulation firms.
The logistics sector, which connects thousands of industries, is now poised to seize new opportunities for growth. According to Xinhua News Agency, the eighth meeting of the Central Financial and Economic Affairs Commission, held on September 9, underscored the need to coordinate the development of both the physical infrastructure and digital systems of a modern circulation network, foster and strengthen internationally competitive modern logistics enterprises, and bolster freight capacity along high-speed rail corridors and in international air cargo. It also called for the refinement of a modern commercial distribution system and the cultivation of a cohort of globally competitive modern circulation firms.
How do the leading logistics and express delivery companies view the new opportunities and challenges? “This conference has underscored the critical role of the circulation system in national economic development, charting a clear course for the long-term growth of the logistics sector,” said Wang Zhenhui, CEO of JD Logistics, to the Shanghai Securities News. Meanwhile, several leading express‑delivery giants have already accelerated their transformation toward smart, digital operations—precisely the path necessary for building a modern circulation system.
New positioning: Efficiently connecting domestic and international production factors.
Xiong Weibei, Assistant to the President of Cainiao Network, expressed great enthusiasm: “In China, express delivery and logistics have become an essential infrastructure—much like electricity, water, and gas. Their high efficiency and low cost not only underpin domestic and international e‑commerce consumption but also drive consumer spending across multiple channels through superior service.” In his view, with the state prioritizing the development of a modern circulation system as a strategic task, more social capital can be drawn into the logistics sector, accelerating the construction of this modern system and jointly building a digital logistics infrastructure.
“The logistics industry is a foundational, strategic, and pioneering sector that underpins national economic development. This conference has underscored the critical role of the circulation system in driving national economic growth, charting a clear course for the long-term advancement of the logistics sector.” In light of logistics’ positioning within the new development paradigm, Wang Zhenhui stated that logistics and express‑delivery companies can both accelerate supply-chain transformation and help realize inclusive, equitable access to logistics services.
Wang Zhenhui explained that the logistics supply chain encompasses a series of links, including production, distribution, circulation, and consumption. Logistics and express‑delivery companies can connect both the production and sales ends, thereby effectively supporting the transformation of traditional industries and further unlocking market potential. At the same time, under the new development paradigm, it is not only necessary to achieve efficient aggregation of logistics resources and enhance circulation efficiency through optimized resource allocation, but also to reduce barriers to circulation, standardize logistics data, and leverage industry‑wide economies of scale. Moreover, logistics and express‑delivery firms can play a vital role in promoting balanced regional development and facilitating the efficient flow of factors across different regions, as well as between domestic and international markets.
According to a senior executive at the group, in the face of the new landscape, logistics and express‑delivery companies can not only help reduce overall distribution costs and achieve end-to-end supply‑chain management—from factory to consumer and from farm to table—but also accelerate their global network deployment, connect more producers and consumers worldwide, and jointly foster the growth and prosperity of global trade in services.
Tangible Results: “New Species” Broaden the Industry’s Horizons
Since the 18th National Congress of the Communist Party of China, China has made significant progress in building its circulation system; the national backbone distribution network has been steadily improved, and new business forms and models have continued to emerge in the circulation sector. During the fight against the COVID‑19 pandemic, the circulation industry played a crucial role.
It stands out as a quintessential example in the fight against the epidemic. In addition to leveraging an integrated smart logistics system that combines “sky network, ground network, and information network” to ensure the full‑scale delivery of anti‑epidemic supplies, SF Holding took the lead this year in deploying drones in Wuhan, Shiyan, and several other regions to provide small‑batch, multi‑shipment, point‑to‑point logistics solutions for medical and daily‑life supplies. To date, these drones have accumulated over 730 flight hours, covered more than 22,000 kilometers, and transported over 20 tons of goods.
The listed company, positioned as an intelligent logistics service platform, has initially established a nationwide backbone distribution network. According to Zhu Jiangying, Senior Vice President and Secretary of the Board at Transfar ZhiLian, the company operates 64 highway ports spanning 27 provinces, autonomous regions, and municipalities; in the first half of this year, it hosted 11,177 logistics enterprises, with a cumulative vehicle throughput of 15.27 million trips.
Leveraging a digitally driven innovation model, Cainiao Logistics has pioneered the integration of C2M supply chains with industrial clusters. “By leveraging big data—alongside platform traffic incentives and seasonal market dynamics—we provide factories with forecasts for production, sales, and warehouse‑inbound inventory planning, thereby reducing supply‑chain fulfillment costs, accelerating inventory turnover, and improving on‑stock rates,” said a Cainiao Logistics spokesperson. The company projects that over the next three years, it will serve 10 industrial clusters each with an output value exceeding RMB 10 billion, as well as 1,000 factories each generating more than RMB 100 million in annual revenue.
Guanghui Logistics, headquartered in Xinjiang, has reaped the benefits of its early foray into cold-chain logistics. The company reports that its Beizhan Cold-Chain Logistics Base (Phase I), completed in late 2019, began operations at year’s end. Earlier this year, the project’s operating entity, Huilingxian, was designated a key supplier of epidemic‑prevention materials for Urumqi. In July, Huilingxian established links with production bases for vegetables, fruits, and livestock products, effectively ensuring that Urumqi residents could meet their household needs during the pandemic.
Logistics-listed companies, meanwhile, are applying blockchain technology to logistics operations.
Commentary on “Obstruction”: Accelerating the Transformation to Intelligent Digitalization
However, the modernization of China’s distribution system remains limited, and numerous bottlenecks still urgently need to be addressed.
Driving intelligent, information‑based, and digital transformation and upgrading has also been “incorporated” into the future development plans of numerous logistics and express‑delivery companies. SF Holding disclosed that its second‑half‑year strategy will focus on both network expansion and technological advancement.
A listed company engaged in third-party logistics disclosed that it will closely align with the development of the Belt and Road Initiative, actively integrate into Xinjiang’s efforts to become a “transportation hub” and a “commercial and logistics center,” and establish a globally integrated supply-chain service network. Building on its existing operations, the company will vigorously expand its air freight and international intermodal rail‑road services, while continuously strengthening its operational foundation and enhancing the seamless integration and coordination across all business segments.
On the issue of how the industry can effectively ensure smooth flow along the industrial chain, Zhu Jiangying argues that, on the one hand, by focusing on “self-reliance and addressing weak links” on the supply side and leveraging the platform‑based, networked strengths of logistics enterprises, we can robustly promote the integrated synergy between production‑service industries and manufacturing‑distribution sectors, thereby driving industrial structure upgrading. On the other hand, by emphasizing “strengthening competitive advantages through the digital economy” on the supply side, logistics firms should continue to advance digital and intelligent technologies, enabling the “visibility, traceability, and controllability” of factor flows, accelerating cost reduction and efficiency gains across the supply chain, and effectively enhancing the competitiveness of manufacturing enterprises.
Recommendation
Leave a message for inquiry
Our customer service department can provide you with information and answer your questions, and you can also visit our FAQ section.