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Driven by E-Commerce Demand, China to Build 150 Modern Logistics Hubs

Reacting to the rapid rise of e-commerce in the world’s most populous country, China has an aggressive plan to meet the logistics needs of merchants and consumers.

A plan jointly released last week by China’s National Development and Reform Commission (NDRC) and the Ministry of Transport has the country building 30 logistics hubs by 2020 and 150 overall by 2025. The plan includes six different types of logistics hubs for cross-border and domestic order fulfillment–inland harbor, cargo port, airport, service-oriented port, commerce and trade-oriented port, and inland border port.

The departments cited 127 cities as qualified locations for the project, including Shenzhen, Beijing Tianjin, Nanjing, Shanghai, Guangzhou, Zhenzhou, Foshan, Xi’an and Fuzhou. The hubs are to focus on creating automatic ports and smart warehouses, and to use unmanned vehicles, robots and drones to increase efficiency, the report noted.

The government goal is to also establish high-efficiency logistics services to boost parcel-delivery capabilities, and to develop express shipment capabilities for air, high-speed rail and e-commerce delivery.

The government-backed plan comes amid major investments by some of the country’s private commerce giants to build out their own high-tech logistics networks.

Chinese e-commerce giant JD unveiled a new parcel delivery service recently that enables users of the company’s app in Beijing, Shanghai and Guangzhou to send items intracity and throughout mainland China with the same fast and reliable delivery service they get when making purchases.

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The company, which will expand the program to include high-value items like luxury products and high-end consumer electronics, as well as more diverse options based on delivery timing, said it aims to make residential and business deliveries for shippers from anywhere to anywhere within mainland China a reality in the future.

JD said its logistics network, powered by the company’s proprietary supply chain management technology, is able to deliver more than 90 percent of orders the same day or next day—and to 99 percent of China’s population.

As part of its planned Urban Smart Logistics Institute, a new research center in Xiongan, China, dedicated to developing futuristic automation technology for urban logistics in China’s smart cities, JD is working to develop underground logistics systems. These operations would make use of subterranean tracks and integrated municipal pipe corridors and, in turn, help preserve open, convenient and aesthetically pleasing above-ground space that normally would be used for traditional logistics systems.

“As China’s cities are developing faster and becoming more sophisticated, sustainable urban development is critical,” said JD Logistics CEO Zhenhui Wang. “Smart logistics ensures that space in cities is being used in the most efficient and least disruptive way possible. We are committed to revolutionizing global commerce and society more broadly.”

In the first 10 months of 2018, China’s logistics sector carried about $33.3 trillion worth of goods, according to the China Federation of Logistics and Purchasing, a 6.6 percent annual growth.