Strategic Analysis of the Chinese Logistics Market

Frost & Sullivan, June 2007, Pages: 148

This Frost & Sullivan research service titled Strategic Analysis of the Chinese Logistics Market provides an analysis of the key trends and future growth prospects of the logistics market as well as the third-party logistics market in China. This study also provides an insight into the major restraints that are hampering market growth and provides strategic recommendations to logistics service providers.

Rapid Economic Growth and Increasing Influx of Foreign Direct Investments Drive Demand for Logistics Services

Booming economic growth and the increasing influx of foreign direct investments (FDI) in China have driven demand for logistics services in 2006. The Chinese Government deregulation on foreign-owned logistics companies has also increased opportunities for these companies to increase their market penetration. Moreover, increasing government support related to transportation infrastructure has also aided the development of the logistics industry and its market growth. At the end of 2005, following the completion of the Chinese Government’s 10th five-year plan on transportation infrastructure, the total railway length reached 76.6 thousand kilometres and the length of highways stood at 1.9 million kilometres, with up to 41.0 thousand kilometres as express highways.

"The 2008 Beijing Olympic Games and the 2010 Shanghai Exposition are also expected to spur logistics demand domestically and internationally," notes the analyst of this research service. "Besides, the evolution of logistics and the supply chain software industry and the government’s encouragement is driving the modernization of the logistics sector in China."

Customer-focused Solutions Crucial for Market Success

Despite the lucrative growth opportunities, the complex licensing process at multi governmental levels of authorities and the fragmentation of the market are the key factors restraining growth. "The high levels of complex rules and regulations set by the national, regional, and local government authorities have made it challenging for foreign logistics service providers to move goods from one province to another," explains the analyst. "In addition, the lack of logistics expertise and poor information technology integration are hampering the growth potential of the logistics market."

In the future, improving the logistics infrastructure by integrating road and rail networks, construction of airports in second tier as well as third tier cities, and setting up of free trade zones are expected to create better connectivity to link ports and airports, creating opportunities for advanced logistics solutions. Moreover, logistics service providers would do well to streamline their operations and reengineer their management methodology with the active deployment of technology. With higher operation efficiencies and cost reduction, service providers will be able to offer more competitive prices. Service providers are also recommended to develop customer-focused solutions and pricing for various modules of services, instead of quoting a common price for all clients. Besides, establishing long-term relationships with the government, including each city transport authority as well as the central government will prove beneficial for logistics service providers.

1. Introduction
-1. Title, Disclaimer and Copyrights Certification
--1. Title
--2. Disclaimer and Copyrights Certification
-2. Table of Content
--1. Table of Content

2. Executive Summary
-1. Overview of the Total Logistics Market
--1. Market Overview
--2. Overview of the Total Logistics Market
-2. Key Industry Challenges
--1. Key Challenges for Chinese Logistics Industry Participants
-3. Major Market Drivers and Restraints
--1. Total Logistics Market – Major Growth Drivers and Restraints
-4. Overview of the 3PL Market
--1. Market Engineering Analysis
--2. Overview of the 3PL Market
-5. Key Competitive Scenario
--1. Competitive Scenario
-6. Key Strategic Conclusions
--1. Strategic Conclusions

3. Industry Challenges
-1. Major Industry Challenges
--1. Industry Challenges

4. Total Chinese Logistics Market
-1. Introduction
--1. Introduction
--2. Research Scope
-2. Definitions and Assumptions
--1. Key Definitions and Assumptions
-3. Market Overview
--1. Market Overview
--2. Market Overview – China’s GDP Growth
--3. Market Overview – China’s Foreign Direct Investments (FDI) Used
--4. Market Overview – Major Economic Development Hubs
--5. Market Overview – Government Policies and Regulations
--6. Market Overview—Transportation Infrastructure
--7. Market Overview—Modes of Transportation Systems
--8. Market Overview—Total Transportation Freight Volume
-4. Logistics Market Life Cycle
--1. Logistics Market Life Cycle
-5. Market Engineering Analysis
--1. Market Engineering Analysis
-6. Market Drivers
--1. Market Drivers
-7. Market Restraints
--1. Market Restraints
-8. Logistics Cost as a Percent of GDP
--1. Logistics Cost as a Percent of GDP
-9. Logistics Cost Composition
--1. Logistics Cost Composition
-10. Logistics Revenue and Forecasts
--1. Total Logistics Cost and Forecasts
--2. Breakup of Logistics Cost by Functional Segment
--3. Logistic Cost Composition by Functional Segment
--4. Logistics Cost Forecast by Functional Segment
--5. Logistics Cost Composition Forecast by Functional Segment
--6. Total Logistics Revenue and Forecasts (Based on Cargo Value)

5. Total Chinese 3PL Market
-1. Market Overview
--1. Market Overview
-2. Market Engineering Analysis
--1. Market Engineering Analysis
-3. Total 3PL Revenue and Forecasts
--1. Total 3PL Revenue and Forecasts (Based on Cargo Value)
-4. Total 3PL Market Size 2006 and 2013
--1. Total 3PL Market Size
-5. Market Size and Forecasts by Type of Service Providers
--1. Breakup of Revenue by Logistics Service Providers
--2. Market Size by Logistics Service Providers
--3. Revenue Forecasts by Logistics Service Providers
--4. Market Size Forecast by Logistics Service Providers
-6. Market Size and Forecasts by Functional Segment
--1. Breakup of Revenue by Functional Segment
--2. Market Size by Functional Segment
--3. Revenue Forecasts by Functional Segment
--4. Market Size Forecast by Functional Segment
-7. Major Participants in Chinese 3PL Market
--1. Major Participants in Chinese 3PL Market
-8. Growth Challenges for Local 3PL Providers
--1. Growth Challenges for Local 3PL Providers
-9. Growth Challenges for Foreign 3PL Providers
--1. Growth Challenges for Foreign 3PL Providers

6. Competitive Analysis
-1. Industry Structure
--1. Industry Structure
-2. Types of Logistics Service Providers
--1. Types of Logistics Service Providers
-3. Competitive Analysis-SWOT
--1. Competitive Analysis–SWOT
-4. Competitive Factors
--1. Competitive Factors
-5. Competitive Advantages
--1. Competitive Advantages–Foreign Logistics Service Providers
--2. Competitive Advantages–Local Logistics Service Providers
-6. Competitive Scenario and Trends
--1. Competitive Scenario and Trends

7. Opportunity Analysis
-1. Key Opportunity Analysis
--1. Opportunity Analysis
-2. Market Potential for Various Types of 3PL Services
--1. Market Potential for Various Types of 3PL Services

8. Overview of Major End-user Industries and Opportunity Analysis
-1. Retail
--1. Overview of Major End-user Industries and Opportunity Analysis—Retail
-2. Automotive
--1. Overview of Major End-user Industries and Opportunity Analysis-Automotive
-3. Information Technology
--1. Overview of Major End-user Industries and Opportunity Analysis-Information Technology
-4. Electrical Appliances
--1. Overview of Major End-user Industries and Opportunity Analysis–Electrical Appliances
-5. Pharmaceutical
--1. Overview of Major End-user Industries and Opportunity Analysis–Pharmaceutical

9. Strategic Recommendations
-1. Key Strategic Recommendations
--1. Strategic Recommendations for 3PL Service Providers

10. Profiles of Major 3PL Providers
-1. Company Profiles of Major 3PL Providers
--1. Company Profiles

11. Case Study
-1. Shanghai Lingang Logistics Park
--1. Introduction of Shanghai Lingang Logistics Park
--2. Location of Shanghai Lingang Industrial Area
--3. Major Composition of Shanghai Lingang Industrial Area
--4. Major Transportation Infrastructure in Lingang Industrial Area
--5. Yangshan Deep Water Port
--6. Railroad Connecting to Lingang Industrial Area
--7. Luchaogang Railway Terminal
--8. The Unique Functions of Free Trade Port in Lingang Logistics Park
--9. Free Port Basic Business Functions
--10. Logistics Functions
--11. International Bonded Port
--12. Domestic Logistics Infrastructure Platform for 3PL–Via Lingang
--13. Major Enterprises in the Lingang Logistics Park

12. Database of Key Industry Participants
-1. Key Industry Participants
--1. Major 3PL Providers in Chinese Logistics Market

List of Figures

Total Logistics Market: GDP and Growth (China), 1999-2006
Total Logistics Market: Foreign Direct Investments Used (China), 1999-2006
Total Logistics Market: Deregulation on Logistics Industry (China), 2006
Total Logistics Market: Chinese Government’s 5-Year Plan on Rail and Road Construction (China), 2006
Total Logistics Market: Top 10 Major Container Sea Ports (China), 2006
Total Logistics Market: Total Freight Volume by Mode of Transportation (China), 2006
Total Logistics Market: Market Life Cycle (China), 2006
Total Logistics Market: Market Engineering Measurement (China), 2006
Total Logistics Market: Market Drivers Ranked in Order of Impact (China), 2007-2013
Total Logistics Market: Market Restraints Ranked in Order of Impact (China), 2007-2013
Total Logistics Market: Transportation Operation Licensing Process (China), 2006
Total Logistics Market: Percent of Total Logistics Cost over GDP (China), 1996-2006
Total Logistics Market: Percent of Total Logistics Cost over GDP by function (China), 1996-2006
Total Logistics Market: Total Logistics Cost and Forecasts (China), 2003-2013
Total Logistics Market: Breakup of Logistics Cost by Functional Segment (China), 2006
Total Logistics Market: Logistics Cost Composition By Functional Segment (China), 2006
Total Logistics Market: Logistics Cost Forecast by Functional Segment (China), 2013
Total Logistics Market: Logistics Cost Composition Forecast by Functional Segment (China), 2013
Total Logistics Market: Total Logistics Revenue and Forecasts (China), 2003-2013
Total 3PL Market: Market Engineering Measurement (China), 2006
Total 3PL Market: 3PL Revenue and Forecasts (China), 2003-2013
Total 3PL Market: 3PL Market Size (China), 2006 and 2013
Total 3PL Market: Breakup of Revenue by Logistics Service Providers (China), 2006
Total 3PL Market: Market Size by Logistics Service Providers (China), 2006
Total 3PL Market: Revenue Forecasts by Logistics Service Providers (China), 2013
Total 3PL Market: Market Size Forecast by Logistics Service Providers (China), 2013
Total 3PL Market: Breakup of Revenue by Functional Segment (China), 2006
Total 3PL Market: Market Size by Functional Segment (China), 2006
Total 3PL Market: Revenue Forecasts by Functional Segment (China), 2013
Total 3PL Market: Market Size Forecast by Functional Segment (China), 2013
Total 3PL Market: Major Participants (China), 2006
Total 3PL Market: Growth Challenges for Local 3PL Providers (China), 2007-2013
Total 3PL Market: Growth Challenges for Foreign 3PL Providers (China), 2007-2013
Total Logistics Market: Industry Structure by Type of Participants (China), 2006
Total Logistics Market: Competitive Factors (China), 2006
Total Logistics Market: Competitive Advantages of Foreign Logistics Service Providers (China), 2006
Total Logistics Market: Competitive Advantages of Local Logistics Service Providers (China), 2006
Total Logistics Market: Opportunity Analysis (China), 2007-2013
Total Logistics Market: Top 3PL services with High Market Potential (China), 2007-2013

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