China's logistics companies still face heavy pressure as demand slows

China
A China Federation of Logistics and Purchasing (CFLP) study show that in January and February business had suffered slowing demand, rising costs and shrinking profits.
During these two months, China's social logistics value, the value of all logistics operations, grew 10.6% year on year to CNY23.5 trillion (USD 3.73 trillion), 3.9 percentage points slower. Industrial product logistics value increased 11.4%, 2.7 percentage points slower. Import cargo logistics value went up 0.9%, 17.6 percentage points slower.
China Logistics Information Centre's analysis points out that the slower growth in social logistics value was caused by slower economic growth and the Chinese New Year holiday still remained steady on the whole.
Meanwhile, social logistics costs, the cost of all logistics operations, climbed 12.3% with transport costs increasing 11.8% to CNY700 billion.
China again raised fuel prices by CNY 600 per tonnes, which is the sharpest increase since 2008. Commenting on this, CFLP said the fuel price hike will bring severe impact to the logistics companies, especially those offering transportation services.
The logistics sector survey posted on the same day show that in January, operating revenue of these companies dropped 15.6%. Their core business revenue fell 4.7%. Logistics industry's PMI, the price index of the industry, dropped three percentage points month to month to 48.5%, indicating a high cost and low rate circumstance in the industry.
Source: http://www.transreporter.com/