China's logistics sector shows improved momentum as business confidence steadies

China's logistics sector demonstrated growing resilience and year-high market optimism driven by improved efficiency and capital turnover in June, despite sustained high operational costs, according to a report by China's leading industry association.

In the month, the main business cost index for logistics enterprises stood at 52.5 percent, according to the latest industry index from the China Federation of Logistics and Purchasing (CFLP), released on Sunday. Throughout this year, the cost index has remained at a relatively high level of around 52 percent, reflecting persistently elevated operating costs.

On the profit front, small and micro enterprises recorded a slight month-on-month increase, while large enterprises saw a modest decline, further narrowing the profit margin gap between large, medium, and small enterprises.

Upticks were also recorded in the equipment utilization, capital turnover rate and inventory turnover frequency indices, which rose by 0.2, 0.1, and 0.2 percentage points respectively compared with the previous month.

These improvements show companies are running more efficiently and have better cash flow, demonstrating that they can handle supply chain disruptions while driving their own growth, according to the report.

He Hui, vice president of the CFLP, attributed the momentum to China's unrelenting construction of the "six networks," namely the water network, the new-type power grid, the computing power network, the next-generation communication network, the urban underground pipeline network and the logistics network.

"Looking ahead at subsequent development, the country's continued promotion of the six networks will support the quality improvement of existing equipment and facilities across various sectors, as well as the construction of new facilities. As one of the key components of the six networks, the Internet of Things will continue to be strengthened, enhancing the adaptability and supporting capacity of logistics equipment and facilities for industrial development," said He.

Industry experts also said that government efforts to improve multi-modal shipping, speed up city deliveries and fix delayed supply chain payments are streamlining business operations across the country. These policies are boosting confidence, with the June business outlook index holding steady at a year-high 55.9 percent.

China's logistics sector shows improved momentum as business confidence steadies

Passenger and freight ferry services in the Qiongzhou Strait resumed on Saturday night after the impact of Typhoon Maysak weakened.

Qiongzhou Strait, the waters between south China's island province of Hainan and Guangzhou Province, are crucial for the passage of goods and local produce from the Hainan Free Trade Zone into the mainland, as well as serving tourists traveling to the tropical island.

The services were suspended on Friday morning to brace for Typhoon Maysak, the 10th typhoon of the year, which made landfall on the coast of south China's Hainan Province on Friday evening.

As of 15:00 on Saturday, about 3,200 vehicles were waiting for service resumption on both sides of the strait.

In Haikou, capital of Hainan, a long line of trucks were seen waiting at the parking lot of Nangang Port, some loaded with fresh produce such as flower seedlings and fruits.

"I came here this afternoon. My truck is fully loaded with jackfruit, which will be spoiled in a couple of days," said Liang Zhenfang, a truck driver.

Port staff and volunteers set up a temporary supply distribution site, delivering food and bottled water to drivers and passengers waiting in the parking lot.

In addition, port dispatchers and maritime officers provided guidance for trucks to make sure they are safely loaded onto ships in an orderly manner.

"We have switched to an emergency dispatch mode and opened a special channel at the port for vehicles transporting key materials, such as fruits, vegetables, green agricultural products, and fresh agricultural products, so that they can board ships and depart as soon as possible," said ferry terminal manager Cai Shaojia.

Ferry services resume in Qiongzhou Strait as typhoon wanes