China Federation of Logistics and Purchasing: The ratio of total social logistics costs to GDP in 2024 will drop to 14.1%, the lowest level in history

According to a report released by the China Federation of Logistics and Purchasing, the total social logistics costs as a percentage of GDP in 2024 is 14.1%, a decrease of 0.3 percentage points from the previous year, reaching the lowest level in history. Throughout the year, there has been a steady decline in each quarter, indicating that the logistics cost for every 100 yuan of GDP has decreased from 14.4 yuan to 14.1 yuan. Based on the current GDP scale, this corresponds to a savings of over 400 billion yuan in logistics costs, indicating a reduction in social logistics costs during the economic operation process. The current decline in the ratio of total social logistics costs to GDP is the result of a combination of factors such as policy promotion, economic optimization, and improvements in logistics quality and efficiency. In the next stage, further breakthroughs are needed through optimizing industrial layout, co-building supply chain systems, and upgrading logistics services to effectively reduce the logistics costs for the entire society.

In 2024, the Central Committee of the Communist Party of China and the State Council attach great importance to logistics development. The fourth meeting of the Central Financial and Economic Commission and the third plenary session of the 20th Central Committee made strategic deployments, and the General Office of the CPC Central Committee and the General Office of the State Council jointly issued the "Action Plan for Effectively Reducing the Logistics Costs of the Whole Society." The National Development and Reform Commission and other departments have implemented comprehensive policies and coordinated efforts to effectively promote the improvement of the logistics operating environment. From the perspective of statistical indicators, the ratio of total social logistics costs to GDP is usually used as the core indicator to measure the efficiency of logistics costs in the whole society, and its changes reflect the relationship between the comprehensive effectiveness of China's logistics system and the quality of the real economy's operation to some extent.

Figure 1 Quarterly Ratio of Total Social Logistics Costs to GDP (%)

From the economic environment perspective, transformation and upgrading are the economic foundation for the decline in the ratio of social logistics costs in China. In 2024, the structure of China's economic development is improving, with new driving forces emerging, and the proportion of the tertiary industry steadily increasing. While the proportion of the secondary industry remains stable, the manufacturing sector continues to develop towards high-end, with the value-added rate in the industrial manufacturing sector appreciating by nearly 30%, an increase of nearly 10 percentage points over the past decade. Economic factors such as industrial upgrading and the increase in the proportion of the service industry have driven a decrease in the scale of unit logistics GDP demand and freight volume (i.e., the GDP created by the same physical freight volume and logistics costs has increased), achieving certain results in high-quality economic development.

Figure 2 Comparison of Trends in Freight Volume, Total Social Logistics, and GDP Data

From the business environment perspective, policy-driven initiatives and improved infrastructure have played a positive externality in reducing costs and increasing efficiency. In 2024, under the guidance of multiple policies, the importance of modern logistics and the acceleration of high-quality logistics development have become a consensus across society. The policy environment has been optimized, and the supporting system for modern logistics continues to improve. Throughout the year, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Action Plan for Effectively Reducing the Logistics Costs of the Whole Society," making comprehensive deployments from multiple aspects such as deepening institutional and mechanism reforms, promoting the integrated development of industrial and supply chains, improving the national logistics hub and channel network, and strengthening innovation-driven and quality improvement efforts The upgrade of hardware environment and the externalities of logistics infrastructure are gradually becoming prominent. Currently, China's comprehensive transportation network, including highways, railways, and civil aviation, is becoming increasingly 完善. The construction of national logistics hubs is accelerating, and the collection and distribution system of port and station hubs is gradually upgrading. The optimization of infrastructure environments in multiple fields has laid a good foundation for expanding transportation scale, improving transportation efficiency, and developing multimodal transport.

Driven by policies and other factors, logistics restrictions and approvals in various fields and regions have been simplified, with the rate of related management institutional costs decreasing by 1%, and the ratio of management expenses to GDP decreasing by 0.1 percentage points compared to the previous year.

From the perspective of logistics services, structural adjustment and technological innovation are the intrinsic driving forces for efficient logistics operations. In 2024, the supply and demand of logistics will be well matched, with stable service scale and improved service quality, especially in the collaborative promotion of structural adjustment and technological innovation. In terms of transportation structure, the proportion of highway freight has declined, and the development potential of efficient transportation methods continues to be released. The annual civil aviation cargo volume increased by 22.1% year-on-year, and the proportion of air transportation methods increased by 0.2 percentage points compared to the previous year. The annual waterway freight turnover increased by 8.8% year-on-year, with the proportion of waterway freight turnover increasing by 1.5 percentage points. The efficiency of air and water transportation has improved, while the proportion of highway freight turnover has decreased by 0.6 percentage points, showing the effectiveness of long-distance transportation shifting to water. In terms of technological innovation, information sharing across links has helped to tighten the connection of intermodal transport. The interconnection and sharing of information are steadily advancing, with data sharing mechanisms gradually established between key ports and railway yards, and the level of digital connection in key logistics areas has been strengthened, promoting the positive development of collaborative transportation methods. The annual container rail-water intermodal transport volume increased by about 15% year-on-year, and the proportion of multimodal transport and agency-related activities increased by 0.3 percentage points compared to the previous year.

Figure 3 Composition of freight turnover in 2023-2024 (%)

However, it is also important to note that there is currently insufficient effective domestic demand, and there are growing pains in the transition from old to new driving forces. Continuously promoting effective reductions in overall logistics costs faces certain challenges, and the next stage still needs to release potential in multiple fields.

There is uncertainty in industrial layout during the economic transformation period, and logistics services still need to maintain strong resilience. From an industrial perspective, the external environment is complex and severe, leading to changes in industrial layout. Since the beginning of this year, trade barriers have significantly increased, with some countries frequently imposing trade restrictions on Chinese products. The trend of some industries shifting towards multi-regional and multinational layouts has become evident, and the average transportation distance of industrial chain operations has lengthened, with the annual average freight distance nearing 450 km, a slight increase compared to the previous year.

From a regional perspective, the balance of regional logistics development still needs further improvement. The national unified market is steadily advancing, but regional and structural differences in logistics still exist. The number of logistics entities and service levels in the central and western regions still need further enhancement to promote a more balanced distribution of logistics services. From a structural perspective, the supply of traditional transportation services remains relatively sufficient, and structural optimization still requires adjustment cycles. Currently, there are still over 7 million highway freight carriers in China, with the proportion of highway freight volume maintaining around 70%, indicating a large scale of highway transportation, and the transportation structure still requires adjustment and optimization cycles Continuously promoting "public transport to rail" and "public transport to water" is a key measure to optimize the freight structure, and it is necessary to continue to strengthen the conversion of logistics for bulk commodities such as coal and ore to railway and waterway transportation.

The supply chain system of industrial and commercial enterprises needs to be improved, and the concept of co-building with logistics still needs to be consolidated. In recent years, the logistics management level and socialization degree of industrial and commercial enterprises in China have been gradually improving, with the outsourcing ratio of key industrial and commercial enterprises' logistics business exceeding 65%, and the order volume growth rate of logistics enterprises' supply chain services exceeding 10%. An integrated supply chain system is gradually being constructed. From the revenue composition of leading logistics enterprises, the current proportion of integrated logistics business revenue is only about 20%, and related types of business are still in the cultivation period. In the future, it is necessary to strengthen the integration and innovation of logistics enterprises with the supply chain of industrial and commercial enterprises, expand business increments, and promote cost reduction across the entire logistics chain through process optimization, facility sharing, and information docking.

There is still price competition in some areas, and the profitability of logistics service entities needs improvement. Currently, logistics entities in some areas face many operational difficulties, with business homogenization in road transportation, express delivery, and water transportation leading to a "price-for-volume" cycle. Insufficient collaboration between upstream and downstream of the industrial chain and imperfect information sharing mechanisms make it difficult for localized cost reductions to be transmitted to overall efficiency improvements. Research shows that among the service types of key logistics enterprises, information services and planning, as well as integrated services, have relatively good profitability and sustainable development potential. In the future, it is necessary to further expand the demonstration effect, guide the establishment of service standards and price guidance mechanisms in the field, and encourage the transformation of logistics services from homogeneous competition to value creation.

The growth of overseas cost investment has accelerated, and the international competitiveness of logistics enterprises needs further enhancement. In the face of an increasingly complex international environment, the resilient development of China's manufacturing exports has raised higher requirements for cross-border logistics services. Driven by this, logistics enterprises are promoting international supply chain infrastructure construction through measures such as laying out overseas warehouses for cross-border e-commerce logistics and actively participating in the construction of international freight corridors. However, due to factors such as intensified geopolitical risks, high localization compliance costs, and standard differences, logistics enterprises face multiple pressures in their international development. In the future, it is necessary to strengthen infrastructure connectivity, optimize the alignment of international rules and standards, deepen international logistics cooperation between large industrial and commercial enterprises and logistics enterprises, and collaboratively promote the reduction of international logistics costs