China's logistics industry has kept expanding, and it needs to improve and extend its global footprint faster to meet domestic companies' operating capability, especially in light of the escalating trade war with the U.S., analysts said.
China's logistics industry's index stood at 52.8 in May, remaining in expansion territory, indicating that the logistics business continues to prosper, according to a report released by the China Federation of Logistics and Purchasing (CFLP) Monday.
Consumer demand is strong, inventories are being drawn down, and logistics efficiency has improved, said the report.
Meanwhile, FedEx, a U.S.-based international logistics company, diverted and rerouted Chinese telecom company Huawei's packages to the U.S. without authorization, coming at a time when the U.S. government continues to attack Huawei.
Illegal operations might exist in FedEx at such a critical time. "It is also a signal for Chinese logistics companies to enhance their services to catch up with domestic giant enterprises' demand, such as Huawei," He Hui, an official with the China Logistics Information Center, told the Global Times Monday.
"If FedEx's alleged illegal operation is confirmed, both domestic and other foreign express firms could take over the market," He said, noting that even with a relatively large market share of China's international express business, FedEx is not irreplaceable.
China's listed logistics-related companies closed higher on Monday. For example, Shanghai-listed Sinotrans closed at 5.36 yuan (78 cents), up 3.47 percent, and Guangzhou Jiacheng International Logistics closed at 19.16 yuan, up 3.01 percent.
Annual revenue of Fedex in China is about 18 billion to 20 billion yuan, or around 31 percent of the market, and the company also tops China's international logistics market, according to estimates by a research institute at Sinolink Securities on Monday.
If the Chinese government imposes sanctions on Fedex, SF Express could seize part of its business. However, that won't give a big boost to SF Express' revenues, according to Sinolink.
International delivery business accounts for a small portion of China's logistics industry, and it's more important for domestic express companies to strengthen services, including talent cultivation, equipment upgrading and customer development, Xu Yong, a veteran industry expert, told the Global Times Monday.
