The ratio of total social logistics costs in China's GDP will be reduced to around 13.5 percent by 2027, said an action plan recently released by relevant central departments for reducing logistics costs.

In 2023, the ratio of China's total logistics costs to GDP was 14.4 percent, down 0.3 percentage points from 2022, reflecting an improvement in domestic logistics efficiency.

However, compared with developed countries, there is significant room for enhancement.

To bring down costs, it is essential to identify the root causes and recognize the structural issues.

To address the issue of low supply chain logistics efficiency, it is necessary, first of all, to promote the integrated and innovative development of the logistics and manufacturing industries, and optimize their layout.

To tackle the issue of unbalanced transportation structure, it is vital to deepen the adjustment of transportation structures, leveraging the comparative advantages of various modes of transport such as public roads, railways, waterways and air transport. Railway lines should also be advanced into port areas, industrial parks, and factory zones to improve the combined efficiency of comprehensive transportation.

Technological cost reduction through digital transformation is also an option.

By promoting the integration of online and offline logistics resources, updating the layout with mechanized, automated and intelligent equipment, and utilizing unmanned driving, unmanned delivery, automatic sorting and other smart technologies, logistics operation efficiency can be continuously improved.

It necessitates the joint efforts of the entire industry and society. Only by breaking through cost constraints can the logistics industry advance fast on the path of high-quality development.

SECURITIES DAILY