New | Booming e-commerce growth is pushing China’s logistics system to its limit, promoting calls for improvements

China’s logistics system needs to keep pace with the exponential growth in online commerce, otherwise bottlenecks and other systemic shortcomings are likely to become a daily fact of life, according to industry experts.

At current growth rates, next year’s Singles’ Day, the online shopping extravaganza intended to celebrate pride in being single, is likely to result in more than one billion packages entering into China’s domestic distribution system.

The system was already pushed to its limits. This year’s event resulted in 678 million parcel shipments, according to Chinese data company Syntun, a 66 per cent increase over last year, and phenomenal 67-fold increase in the volume of packages since 2010. The event is held each year on November 11.

KK Leung, president of UPS North Asia District said China’s custom clearance should speed up to meet the pace of cross-border e-commerce growth.

“The volume is totally different, it was hundreds of parcels one day for a local custom, but now it is hundreds of thousands a day,” Leung told South China Morning Post.

“Our target is always same day, goods coming in the morning, and get them released [from customs] in the afternoon.”

Leung said most consumer goods imported into China are subject to domestic taxes and must undergo individual parcel processing, which can be a time consuming process. This also applies to goods which are imported through warehousing facilities located in free-trade zones near shipment hubs within China.