The central authorities issued a joint action plan on Wednesday to reduce the overall logistics costs for society. The plan proposes to reduce the ratio of social logistics costs to gross domestic product to around 13.5 percent by 2027.

The plan can be made effective by propelling reforms in key areas of railway transportation, such as establishing a pricing system for railway logistics services and reforming the organization for railway transportation and goods dispatch.

The plan also stresses the need to solve the strategic positioning issues that have plagued the sector for a long time.

The plan also calls for measures to support exports of new products such as electric vehicles, lithium batteries, and photovoltaics.

The aim is to reduce the overall logistics costs for EVs, lithium batteries and photovoltaic products, ensuring the security and smoothness of the supply chains for these new products, which will further promote their exports and further foster the prosperity of these emerging industries.

Other highlights include the proposal to spur the vigorous development of airport- and port-related economies, relying on the construction of several national logistics hub economic zones, and supporting related cities in exploring the synergistic development of industry clusters and logistics hubs.

Under the action plan, higher-level comprehensive planning will better match the services provided by a logistics hub with the surrounding industries it supports, thereby forming a new industrial development model.

In the process, logistics costs can also be reduced.

The ratio of total social logistics costs to GDP not only reflects the cost efficiency level of the logistics industry but also the quality of industrial and supply chain organization. The ratio in 2023 was 14.4 percent, and if it can be reduced to 13.5 percent that will be equivalent to reducing the total social logistics costs by more than 1 trillion yuan ($137.99 billion) based on the GDP of 2023. The latest action plan points out the direction, and it is hoped that it can be effective, thus benefiting the entire society and the national economy.

21ST CENTURY BUSINESS HERALD