The COVID-19 pandemic impacted the freight forwarding market due to lockdowns and entry restrictions imposed by the neighboring countries. After the easing of lockdown restrictions, freight forwarders witnessed significant growth in the country, and the pandemic created an opportunity to freight forwarders to adopt digital technologies to meet the increasing demand.
Moreover, to face the multiple challenges posed by the pandemic, China's logistics sector is adopting digital technologies to boost efficiency. In addition, the country's government also supports digital third-party logistics platforms and develops a batch of digital platforms and supply chain enterprises with global influence.
Furthermore, Chinese freight forwarders are leveraging digital technologies to help boost logistics efficiency in regions affected by the pandemic. For instance, Full Truck Alliance, a Chinese truck-hailing company, utilizes digital technology to provide apps that connect many truck drivers with merchants. The digital platform also enables truck drivers to find goods quickly and reduce empty-load rates and fuel consumption. However, in 2022, according to the General Office of the State Council, China released its first five-year plan to modernize its logistics sector by the end of 2025. The plan includes promoting the digital transformation of the logistics sector, increasing the quality and efficiency of services, etc. Thus, digital transformation is likely to drive China's freight forwarding industry.
China Digital Freight Forwarding Market Trends
Rise in E-Commerce Sector Driving the MarketChina currently owns one of the world's strongest e-commerce sectors. In 2021, despite the pandemic disruption, retail e-commerce sales in the country amounted to more than USD 2.7 trillion, and it is expected to reach approximately USD 3.5 trillion by 2024. In addition, as per industry experts, the country holds more than 40% of the global market share in e-commerce sales and handles more e-commerce transactions than France, German, Japan, and the United Kingdom.
Moreover, in September 2022, as per the China Federation of Logistics and Purchasing (CFLP), the country's e-commerce logistics index increased to 108.1 at a growth rate of 50%, which is higher than the threshold line. This rebound can be attributed to the steady recovery of household consumption, rapid growth in energy and logistics, and restoration of the logistics supply capacity in the country. Moreover, in Q4 2022, domestic e-commerce platforms and freight forwarders improved their infrastructure to enhance delivery quality and efficiency.
In addition, industry experts projected growth in e-commerce sales, majorly driven by the Double 11 shopping festival in the country. Most of the e-commerce platforms started presales for this event. October 2022, presales on JD Worldwide, JD's import business platform, experienced a growth rate of more than 170% compared to the same period in the previous year. However, with the growing sales, online customers expect order accuracy, same-day or same-hour delivery, and free returns. In addition, e-commerce companies are exploring ways to reduce order delivery times and operational costs. The e-commerce industry drives the demand for transparency, affordability, convenience, speed in delivery, and compelling frictionless returns. In order to cater to these increasing e-commerce sales, most freight forwarders are moving toward digitization of their services to maintain transparency.
Increasing Air Cargo Shipments Expected to Drive the MarketChinese air cargo witnessed an upward trend. For instance, in 2022, Shanghai Pudong International Airport's inbound and outbound cargo flights reached more than 17,800 in Q3 2022, at a growth rate of nearly 34% compared to Q2 2022 and increased by 6.6% when compared to the same period of the previous year. In addition, from Q1 to Q2 of 2022, Hangzhou Xiaoshan International Airport completed an air cargo throughput of 478,000 tons, including 78,300 tons of air cargo in the international segment (Hong Kong, Macao, and Taiwan).
Moreover, as per the China Academy of Civil Aviation Science and Technology, in early 2022, the air cargo volume slightly declined when compared to the pre-pandemic levels. After April 2022, the volume showed an increasing trend. In addition, growth in e-commerce has driven air cargo shipments in the country. International trade in China has also created a strong demand for air cargo, fueling the digital freight forwarding industry in the country.
Meanwhile, according to customs data, China's cross-border e-commerce import and export scale has increased nearly 10 times in the past five years. In addition, the outbreak of the pandemic fueled cross-border e-commerce in the country, further boosting air cargo demand. However, as per the Civil Aviation Administration of China, in September 2022, air cargo shipment volume amounted to more than 510,000 tons. Thus, the increasing air freight volume will drive digitalization adoption in the logistics sector.
China Digital Freight Forwarding Industry OverviewThe report covers the major players operating in the Chinese digital freight forwarding market. The market is highly competitive, with none of the players occupying the major share. The market is fragmented, and it is expected to grow during the forecast. The major players in the Chinese digital freight forwarding market include DHL, Flexport, Agility Logistics, and Freightos.
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Table of Contents
1.2 Study Assumptions
1.3 Scope of the Study
2.2 Research Phases
4.2 Value Chain / Supply Chain Analysis
4.3 Insights on Investment Scenarios
4.4 Insights on Government Regulations and Initiatives
4.5 Brief on Technology Development in Online Freight Forwarding and Digital Platforms
4.6 Overview on E-commerce Logistics and Freight Forwarding in China
4.7 Impact of COVID-19 on the Market
5.4 Industry Attractiveness - Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Customers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitutes
5.4.5 Intensity of Competitive Rivalry
6.2 By Firm Type
6.2.2 Large Enterprises and Governments
7.2 Company Profiles
7.2.3 Full Truck Alliance (Manbang group)
7.2.5 Agility Logistics Pvt. Ltd (Shipa Freight)
7.2.7 DHL Group
7.2.8 Kuehne + Nagel International AG
7.2.11 SINO SHIPPING
7.2.12 DB Schenker
7.2.14 WICE Logistics*
A selection of companies mentioned in this report includes:
- Full Truck Alliance (Manbang group)
- Agility Logistics Pvt. Ltd (Shipa Freight)
- DHL Group
- Kuehne + Nagel International AG
- SINO SHIPPING
- DB Schenker
- WICE Logistics*