Logistics: Where will new roads lead?

PUBLISHED : Monday, 03 July, 2006, 12:00am
UPDATED : Monday, 03 July, 2006, 12:00am

In a developing market, building any type of efficient national framework or network is always a challenge, to say the least. And this is true of the logistics industry.

Much of the activity to date has been focused in the urban areas and there is little if any form of logistics system to speak of in far-flung villages, particularly in the land-locked interior and poorer provinces.

However, there may be good news looking ahead as Beijing has earmarked in the current 11th five-year programme to develop the logistics industry, investing more in infrastructure, including building more roads. Secondly, the central government has pledged to improve the lot of its millions of farmers across the country that in turn will demand logistics in a way that extends far beyond simple delivery and transport services.

Nevertheless, like many issues and industries in the mainland, all economic plans, no matter how magnificent in vision and scope, could boil down to a chicken-and-egg conundrum. How much are companies - even state-owned ones that are now also in the game according to market forces - willing to invest to open up the untapped rural market?

And, money aside, how can an efficient network be built in a country whose income scales vary from province to province, whose lifestyles differ vastly in different cities, and whose geological conditions are equally varied? China Business asks a range of industry professionals.