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Home > Doing Business with China > Transportation and Logistics Overview > Road Logistics in China Heavy government investment and the unreliability of other options such as rail and inland water have made road transport China’s most popular choice for the inland distribution of goods (particularly perishable goods) in China. Beijing has already embarked on a serious plan to double China’s expressway mileage. By 2005, as China’s new inter-provincial highway system nears completion, almost 200 000 km of new roads will have been completed, bringing the national total to roughly 1.5 million km. Among the most significant of these developments are the new 2,000 km Shanghai-Chengdu Highway and the 2,500 km Beijing-Zhuhai Expressway. Because most of China’s highways are financed using a fixed return toll based system, tolls account for roughly 20% of costs faced by long distance trucking operators and create huge incentives to overload trucks. Nearly 75% of China’s more than 100 000 traffic fatalities per year have been attributed to overloaded trucks. These deaths have led to new road safety laws, which if observed, could have significant implications for the efficiency and the costs of trucking operations where trucks are overloaded on average by 30% and often by 50%. However, at present the trucking industry in China remains extremely fragmented and is not organized on a national basis. The largest of the nearly 3 million trucking service providers in China is Sinotrans, with a registered fleet of 3,000 trucks specializing in long-distance service. Short-distance trucking services in China are generally provided by local operators who offer relatively cost effective and competitive services. In spite of national policies, this separation between local and long distance trucking operators is in part due to efforts by local and city authorities to protect local businesses. For example, in Shanghai, trucks greater than 1.5 tons are only permitted to enter the city center between 7 p.m. and 7 a.m., and only on even or odd days, depending on their license plate numbers. Significantly, joint ventures by large state owned and domestic firms including Sino-trans are leading to increased consolidation in this sector. |
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