China’s forwarders feel the heat of rising costs as logistics sector faces change

Chinese forwarders are having to contend with rising costs as the price of labour, equipment, and energy eats into operating margins.

This is despite the country's supply chains proving remarkably resistant to the Trump administration's tariff wars.

One forwarder told that China's logistics sector was undergoing a "critical period of transformation". "Logistics enterprises are confronted with the challenge of rising costs.

The increase in oil prices, labour and equipment maintenance expenses have led to a significant surge in operating costs. "This substantial hike has further squeezed the profit margins of enterprises, resulting in mounting operational pressure."

The past year has proved tumultuous for China, which, having shown a moderate recovery at the start of the year, found itself facing down both barrels of the Trump administration desire to reconfigure the global trade order.

Despite this, the forwarder said, the logistics sector had maintained steady growth momentum, "laying a solid foundation for the development of the whole year".

"From January to August, China's total logistics volumes reached CNY229.4trn ($31 trn), characterised by stable growth and continuous structural transformation and upgrades. These figures reflect vigorous logistics development," the forwarder added. "But it also indicates that the logistics and transportation industry is in a critical period of transformation, and many new opportunities have emerged accordingly."

For small- and medium-sized operators (SMEs), the forwarder suggested cross-border activities were proving particularly profitable, but noted that this necessitated a "greening" of their operations as customers seek improved environmental credentials.