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Cold chain logistics industry expanding rapidly in China

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SF Express's cold chain logistics services. (Photo/CFP)
SF Express's cold chain logistics services. (Photo/CFP)

China's cold chain logistics industry is yet to mature, given that up to 100 small firms scattered across the country must resort to outsourcing for cross-border transport and a lack of standards in the industry leads to shabby quality of services, Shanghai's China Business News reports.

The slowly maturing cold chain logistics industry is perhaps the only major impediment in the growth of the increasingly popular e-commerce market for fresh produce.

A cold chain is an uninterrupted series of storage and distribution activities, which maintains a given temperature range, according to Li Dongqi, vice president of SF Express.

In addition to some financially powerful fresh food e-commerce operators that have set up their cold-chain logistics divisions, others have all adopted the model of collaborating with third-party logistics operators, an unnamed industry expert told the newspaper.

The expert said that the difficulties involved in the delivery of fresh food products such as the high transport costs for fresh food e-commerce companies and the lack of standards governing the generally small-sized cold chain logistics firms are among the challenges faced by new firms.

The current situation has provided a good opportunity for the cold chain logistics industry though, the expert said.

Shenzhen-based delivery company SF Express launched cold chain logistics services in September, focusing on offering one-stop transportation solutions for fresh food suppliers.

SF Cold Chain's main clients are foodstuffs companies, fresh food material suppliers, restaurants and catering businesses, and fresh food e-commerce operators, such as Tmall and Taobao.

E-commerce firms have become the most important factor driving the development of the cold chain logistics industry. In 2013, the capacity of cold storage in China was 26.73 million metric tons, up 36% from a year earlier. SF Best recorded sales of 400 million yuan (US$64.27 million) in 2013, up 536% from 2012.

In 2013, China invested more than 100 billion yuan (US$16. billion) in the cold chain industry's fixed assets, reflecting a more than 24% year-on-year growth.

Several analysts predict that the cold chain industry will maintain a 20% growth rate this year. They also project an additional demand for 30 million tons of cold storage during the next five years.

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