China has taken over as the world’s largest logistics market, spending a whopping 12.1 trillion yuan (US$1.76 trillion) in logistics costs last year.
And it is estimated that total costs in China will be close to or exceed 13 trillion yuan (US$1.89 trillion) this year, according to Ni Wei, an executive director of China International Transportation and Logistics Expo.
“The total logistics cost of 13 trillion yuan has created a 13-trillion-yuan logistics market,” said Ni, according to Asia Times.
As transportation prices rise, companies need to find more efficient ways to get their products to customers. Just last month, Beijing-based Geek+ raised a $150 million investment round for its robotics technology that aims to enhance supply chain management and logistics. The company also offers a suite of solutions, including moving technology, automated sorting, an autonomous forklift and a cargo-to-man picking system.
“This year, we expect to grow our business by more than five times,” said the company’s CEO Yong Zheng at the time. “This round of financing will further strengthen Geek+’s continued investments in innovative products and solutions, [a] global distribution network and customer service.”
And in the United States, major companies are trying to decide between footing the costs for more expensive deliveries on their own or passing the costs to customers. Earlier this year, some companies reported that they would raise prices by an undisclosed amount, while another wanted to keep its retail price set and have retailers pay more instead. Tyson CEO Tom Hayes, for example, said at the time that the brand was negotiating cost increases with retailers and food service operators in response to shipping costs rising more than 15 percent. And General Mills told convenience store and food service customers of price increases as well, with its CEO Jeff Harmening revealing that logistic costs and wage inflation were key factors in the move.