China Federation of Things website reported on February 24 that looking forward to 2023, as the epidemic prevention and control enters a new stage, the national economy is expected to improve as a whole, and logistics development will usher in good development opportunities.
The data shows that the confidence in the logistics market has been boosted, and business expectations are positive. The annual logistics operation will achieve a development trend of accelerated recovery. The total social logistics is expected to achieve a growth of about 5.5-6.5%.
Supply and demand continue to improve and logistics operation recovers steadily
On March 2, the China Logistics Industry Prosperity Index for February 2023 released by the China Federation of Logistics and Purchasing was 50.1%, an increase of 5.4 percentage points from the previous month. After the festival, the upstream and downstream activities of the supply chain became active, and most of the sub-indices rebounded. Among them, the business volume index, commodity inventory turnover index, capital turnover index, equipment utilization rate index, and main business profit index rebounded by more than 5 percentage point. It reflects that driven by the new demand, the business volume of enterprises has increased, the turnover of commodity inventory links has accelerated, the micro-management conditions have been improved, and the logistics operation has shown a steady recovery trend.
Logistics activity has picked up significantly, and the indexes in the eastern and western regions are in the expansion range. In February, the logistics prosperity in the eastern, central and western regions rebounded in an all-round way. Among them, the logistics prosperity index in the eastern and western regions reached above the 50% rise and fall line, and the month-on-month recovery exceeded 9 and 7 percentage points, respectively, and the central region rebounded by 0.6 percentage points. After the festival, the eastern region became the most active region for logistics activities, driving the national index to rebound. From the perspective of demand, the business volume index and new order index in the eastern region are 2.7 and 2.4 percentage points higher than the national level respectively; from the perspective of enterprise operation indicators, the main business profit index in the eastern region has reached 50.6%, an increase of more than 5 percentage points from the previous month, and the utilization rate of equipment The index reached 54%, an increase of more than 10 percentage points month-on-month; from the perspective of storage, the commodity inventory turnover index in the eastern region rose to more than 50%, an increase of more than 5 percentage points month-on-month.
Supply and demand continue to improve, and expectations and investment continue to pick up. The logistics supply and demand rebounded rapidly. In February, the total logistics business index rose sharply to 50.1%, an increase of 5.4 percentage points month-on-month. Not only did the eastern, central and western regions recover in an all-round way, and most industries improved simultaneously, but also small and medium-sized logistics companies also showed signs of stabilization and improvement. Both the total business index and the new order index rebounded strongly. Driven by many powerful factors such as the accelerated construction of major projects after the festival and the steady increase in economic vitality, the market outlook and investment motivation of enterprises have been further consolidated. In February, the business activity expectation index reached 57.6%, rising for three consecutive months and hitting a new high in the past 12 months. The fixed asset investment completion index in February rose by 2 percentage points month-on-month. The field of combined transport and aviation cold chain logistics is expected to be optimistic.
Cost pressures remain, but corporate earnings have improved. At present, enterprises are still facing the pressure of operating costs. In February, the main business cost index was still above 50%, much higher than the main profit index. From the perspective of different industries, the cost index of road transportation and postal express industry was relatively high. Increase, enterprises are accelerating business integration and adjustment, overcoming short-term upward pressure, and achieving stable employment and increasing efficiency. However, driven by the demand for new businesses, the profitability of enterprises has stopped falling and stabilized. In February, the main business profit index of enterprises reached more than 46%, an increase of 5.1 percentage points from the previous month, and rose to the highest level since February last year. The profits of different industries are showing an improvement trend. Among them, the recovery of railway transportation, air transportation, warehousing, and postal express delivery is more obvious. The profit index has reached more than 50%, and the chain has rebounded by 3-8 percentage points respectively. In particular, the air transportation industry has initially shaken off the long-term Downturn.
On the whole, the logistics boom in February continued the steady recovery since the beginning of the year, and the foundation for improvement continued to be consolidated. However, it should also be noted that the current recovery trend and momentum still need to be boosted. Both the business volume indicator and the new order indicator are hovering around 50%, which is still a certain gap from the 52-54% in normal years. At the same time, the problem of rising operating costs still needs attention. According to recent surveys and corporate surveys, many companies have reported that the cost of human resources, transportation and warehousing have risen this year, and the increases vary. It is recommended to pay close attention and take measures to actively respond to further consolidate the micro-foundation of the industry's stabilization and improvement.
Industry faces new challenges and more uncertainties
Recently, SupplyChainBrain, a global supply chain management think tank, analyzed six possible trends in the logistics industry in 2023.
M&A activity will continue into the new year. After the outbreak of the epidemic, the scale and revenue of logistics companies have experienced unprecedented growth, and they have gained the attention of private equity companies seeking rapid growth targets. Some companies also want to exit in a timely manner when the market valuation is high. In addition, other economic factors have promoted the industry. M&A activity. According to a report released in mid-2022 by the well-known accounting firm PricewaterhouseCoopers, M&A activity in the transportation and logistics sector is very active. Considering the epidemic, the military conflict between Russia and Ukraine, and the shortage of materials and equipment, many companies are considering nearby M&A opportunities to better control their own supply chains.
Logistics companies are expanding their offerings and investing in smart facilities to gain a competitive edge and deliver more value to customers. According to a study by Accenture, the main driving force for the current changes in the logistics industry comes from changes in user needs. Therefore, enterprises need to provide a wider range of services, open up upstream and downstream, or increase service areas and service industries or modes of transportation.
Preferred carrier is becoming the norm. During the epidemic, shipping resources were hard to find, and many new entrants or small shipping companies with different qualifications entered the supply chain. Next year, companies need to secure more suitable carrier supply.
In the new era, enterprises will get used to remote office management. At present, the shortage of logistics and transportation talents has reached historical highs, which was also a real problem before the epidemic. To this end, enterprises need to improve the employment mechanism and working environment to attract and retain talents. The flexible employment method of remote work is one of the important employment methods, but it also makes it more difficult for enterprises to retain employees.
Outsourced consultants and IT talents will be valued by enterprises. In addition to the urgent need for high-skilled talents, enterprises will also become the top priority for technical talents in the fields of office, automation and digital transformation and data analysis. Logistics companies are increasingly using consultants to guide them in deploying and using new technologies.
Companies will increasingly use advanced technology to train employees. Artificial intelligence technology is one of the fastest growing data technologies, and employee training and development is also one of the application scenarios. According to a Gartner report, artificial intelligence technology plays an important role in corporate recruitment, on-the-job training, and career planning and development. By 2025, 20% of corporate clerical content (including training content) will be written by AI. Some companies have begun to pay attention to small-scale training technology to improve efficiency and reduce induction training time.
The logistics and transportation industry is always evolving, and in the face of an uncertain economy and the risk of a possible recession, progress will not stop in 2023. The goal of the enterprise is to strive to provide elastic, efficient, reliable and fast services. These are inseparable from the support of talents, which is the key to building an excellent enterprise in 2023.
