- China has just launched a logistics group with a combination of five state-owned companies with a charter capital of about 4.7 billion USD.
- The new company will strengthen China’s cross-border logistics business and improve integrated services related to different modes of transportation.
- The move also reflects Beijing’s restructuring drive to promote competition in the transportation sector.
China Logistics Group
China Logistics Group (charter capital is about 4.7 billion USD) was established through the combination of China Railway Materials Corporation and four subsidiaries of China Chengtong Holdings, including Warehousing and Transportation of Materials. China Country; CTS International Logistics; China Logistics and China National Packaging.
The State Asset Supervision and Administration Commission (SASAC) and state investment company China Chengtong both own 38.9% each. And China Eastern Airlines, Cosco Shipping and China Merchants Group are onboard as strategic investors in the new China Logistics Group, holding stakes of 10%, 7.3% and 4.9%, respectively.
The group will provide a wide range of logistics services, including warehousing, distribution, packaging, intermodal transportation, and cross-border e-commerce. They currently own 120 specialized railway lines, with routes connecting Asia and Europe. It also has 42 warehouses designated for future deliveries, other storage facilities covering 4.95 million square meters, and a transportation network consisting of 3 million licensed vehicles in 30 Chinese provinces and all major continents.
Promote rail transport
According to Mr. Hao Peng, Director of SASAC, “The company should promote digitalisation, intelligent transformation and cross-border integration of traditional logistics businesses and help improve the stability and competitiveness of China’s supply chain.”
With a perfect combination and owning many large warehouses and many specialized railway lines, this logistics group will be a promise to China’s railway materials and cross-border trade. The action also reflects Beijing’s restructuring drive to promote competition in the transportation sector.
Efforts to create this giant logistics mark an important step in a campaign to merge assets among China’s state-owned enterprises, boosting efficiency and creating competition in the logistics sector and rail transport in particular.