According to Economist article, logistics in India costs less than in China. Here are two examples that shows China as a mighty trading power, first is Yangshan which is in outskirts of Shanghai, is the world’s busiest container port and second is Pudong airport which is world’s third-biggest handler of air cargo. Also, there are 62000 miles of expressways and comparable length of railways which stretches across the country. After all this infrastructure one might think china to have world class logistics industry. It does not.
Logistics spending in India is 13-14% of its GDP, whereas it is roughly around 18% for China. Li Keqiang, the prime minister, recently echoed industry’s complaints that sending goods from Shanghai to Beijing can cost more than sending them to America.
Logistics covers transportation, warehousing and the management of goods. Its Chinese translation, wu liu, literally means “the flow of things”. But that flow within the country is costly and cumbersome. Much of the investment in infrastructure has gone to lubricate exports. Now, as China’s government shifts its focus to consumption at home it is finding that the domestic logistics industry is woefully inefficient.
