PORT congestion is keeping logistics cost high, resulting in logistics costs that are twice as high as in the developed world.
Port congestion keeps logistics cost high, twice that of developed world
PORT congestion is keeping logistics cost high, resulting in logistics costs that are twice as high as in the developed world, says Rizhao Port Group chairman Du Chuanzhi, a member of the National People's Congress.
A port is like a crossroad. A crossroad is the most crowded part of a city, Mr Du said.
In the past five years, there were 602 new 10,000-tonne capacity berths built in China, he said. Throughput of the whole country totalled to 7.93 billion tonnes last year. But complex handling, low efficiency and poor connections between ports and other means of transport created costly congestion.
Since China rolled out a logistics revival plan in 2009, the industry has been in a state of rapid growth with the aggregate value of its operations reaching CNY177 trillion (US$28.4 trillion) in 2012, three times of the annual GDP. But the cost of such operations takes up 18 per cent in the GDP - twice as high as in the developed countries, he said.
Mr Du said, for every per cent decrease in logistics costs in terms of GDP, will generate CNY520 billion in economic benefits. If costs fall to 13 per cent of GDP, then CNY2.5 trillion will be saved.
Mr Du suggested that more effective connections between different means of traffic, such as road, rail and waterway, should be developed to lower costs.
