China’s huge and fast-growing logistics market is plagued by high costs, said industry players at the recent Asian Logistics and Maritime Conference. “We hope that after the 18th Party Congress, there will be reforms to resolve problems in the sector,” said He Liming, President of the China Federation of Logistics and Purchasing (CFLP). The Federation has raised its concerns with various government bodies including the Ministry of Commerce, He said. “They have been working on improving it, but the improvement is not perfect, because many government departments are involved.” China’s logistics cost is double that of developed countries, said Liu Wu, founding Chairman of P.G. Logistics Group, headquartered in Guangzhou. “The feedback from our clients is China’s logistics sector must be reformed.” Though the sector had grown rapidly, efficiencies had failed to keep pace, said He. From 2001 to 2010, the value-added by the logistics industry registered 14.8% average annual growth, but what was now needed was high-efficiency growth. During the first three quarters this year, China’s logistics revenue grew 9.6% to CNY130.7 trillion, but its logistics costs rose 11.3% to CNY6.4 trillion, accounting for 18.1% of the economy’s GDP, according to the CFLP. It is cheaper to transport a container from the west coast to the east coast of the United States than from Xinjiang to Shanghai because the container is transported by rail in the U.S. while it is transported by truck in China, said Allan Wong, Chief Executive of OOCL Logistics, a subsidiary of OOCL. “Why are our logistics costs higher than in developed countries? China’s serious logistic problem is the many high fees charged,” said He. China has 90,000 kilometers of toll highways, with some highways charging tolls even after 30 years in operation – long after they had covered their construction costs, he said. China’s logistics costs should be lower than those of developed nations but are driven up by waste, poor planning, and management problems, said Liu of P.G. Logistics. Another reason is the underdeveloped infrastructure in remote regions, which makes delivery to those areas expensive, said Chen Nian, Chief Executive of VANCL, a Chinese e-commerce firm that sells garments online. “The problems in China’s logistics sector are not for the government to resolve. They must be solved by market forces,” he said, as reported by the South China Morning Post.