Logistics chief: Worst of storm over

China's logistics industry has weathered the financial crisis and will eventually emerge with stronger, modern companies, said Ma Zengrong, vice-chief of the exhibition division of the China Federation of Logistics and Purchasing.

To reduce impacts from the crisis on the logistics sector, the central government released a restructuring and revitalization plan early this year to assist the pivotal industry with wide-ranging support that includes financing and tax breaks, Ma said.

Logistics companies themselves have streamlined by integrating resources, making procedures more efficient and improving services, he added.

"Logistics as a service industry has close ties with the growth of other sectors. Sound development momentum in the national economy is the best guarantee for the growth of logistics," Ma said, adding that recent signs of recovery in China show the industry is weathering the storm.

Ma added that small operators should cooperate with larger companies to enhance capabilities and hedge against market risks.

Another option for them is to spot a niche in the market, he said. "Being small does not necessarily mean being weak. Focusing on some specific market segments and developing expertise in these fields will help to make them highly competitive industrial players."

Collaboration between small and mid-size companies with complementary resources is also important in competing with large companies, Ma suggested.

Despite the global economic downturn, the International Fair for Material Handling and Logistics, known as CeMAT ASIA, which begins today and is scheduled to end on Thursday, attracted wide attention as the industry continues to adapt.

"In the face of the crisis, different strategies are employed. As some companies lose market share due to weak capabilities in tackling the crisis, other companies will take over," Ma said. "I believe those companies with strategic vision and a real competitive edge know how to take advantage of the opportunity to increase their productivity. After the market environment gets better, their market share will definitely be expanded."

Information technologies are expected to be a highlight of the ongoing four-day event, Ma said. Modernizing systems and management requires wide use of information technologies. Logistics is already a domain for intense competition between IT companies, and that is reflected in this year's fair.

With a considerable increase in Chinese proprietary-brand logistics, machines and equipment, the fair is also hosting a stronger legion of domestic companies, Ma added.

Concurrent with the event, a variety of symposiums covering topics like national defense, retailing, pharmaceuticals, railways, home appliances and food reflect the diversification in Chinese logistics.

Ma suggested that exhibitors should capitalize on the event to promote products, learn from their peers and collect market information.

Over the past three decades, China's businesses have developed the capability to go abroad, Ma said, adding that the international fair provides a crucial opportunity to help them increase overseas expansion.

Source:China Daily