The non standardized attribute of the industry does not constitute a constraint that is difficult to break through in the growth of third-party logistics enterprises. Third party logistics has a strong attribute of non standardization. The fundamental reason lies in the non standardization of customers’ needs (mainly manufacturing enterprises and trading companies), resulting in the non standardization of products, services and prices. However, the non standardized nature of the industry has not stopped the birth of the industry leader. As the world’s largest third-party logistics company, DHL’s third-party logistics business achieved a revenue of US $28.453 billion in 2020; Nippon express, a freight company, has grown into the top five third-party logistics companies in the world, with a third-party logistics revenue of US $19.3 billion in 2020.
In the process of the rise of overseas third-party logistics companies, the opportunity of the times has played an indispensable role. DHL and UPS both developed third-party logistics around the 1990s. Japan Tongyun quickly completed the global layout in the 1970s-1990s. We think there are three core reasons behind it: first, the local economic growth slowed down and the profit growth of enterprises slowed down at that time, and began to seek benefits from logistics links; Second, emerging industries sprout and develop rapidly. Industrial transformation and upgrading puts forward new requirements for supply chain logistics; Third, the wave of global integration continues to advance, and the emergence of transnational trade promotes the reconstruction of the global supply chain network.
At present, China’s economy, policy and industrial environment are conducive to the development of third-party logistics. China’s logistics cost rate is significantly higher than that of the United States, mainly due to the high freight volume per unit GDP. On the one hand, it is due to the impact of industrial structure differences caused by different development stages, on the other hand, it is due to China’s low logistics efficiency. The third-party logistics can effectively integrate warehouse, vehicle and other resources, eliminate redundant logistics links, and save logistics costs for enterprises; In the context of slowing economic growth, Chinese departments have continuously issued policies to encourage the development of third-party professional logistics. At the same time, the continuous improvement of China’s transportation infrastructure and multimodal transport has provided a better industrial environment for the development of third-party logistics.
The pattern of manufacturing industry is reshaped, and supply chain logistics meets the opportunities of the times. The logistics industry is based on the manufacturing industry. The development direction of manufacturing logistics basically determines the development trend of China’s logistics industry. 1) In the process of transformation and upgrading of China’s manufacturing industry, the business environment of traditional manufacturing enterprises has changed significantly. The core competitiveness of enterprises no longer completely depends on the reduction of direct production costs. Seeking better supply chain solutions has become an inevitable choice for enterprise transformation. 2) China’s emerging manufacturing industry has developed vigorously in recent years, which puts forward new requirements for logistics supply chain and creates excellent development opportunities for third-party logistics. 3) Under the trend of manufacturing migration, the global layout of China’s manufacturing industry has spawned a new demand for supply chain logistics services.
Investment suggestion: the non standardized attribute of the industry does not constitute an obstacle that is difficult to break through in the growth process of third-party logistics enterprises. At present, China’s third-party logistics industry has ushered in excellent development opportunities of the times. We predict that the scale of the third-party logistics market will be RMB 2.24 trillion in 2025 and the five-year CAGR will be 7.2%, including new energy vehicles, intelligent manufacturing equipment, medical devices 3C electronics and other advanced manufacturing logistics tracks have a high view. It is suggested to pay attention to the fast-growing Hichain Logistics Co.Ltd(300873) , Jiangsu Feiliks International Logistics Inc(300240) , Milkyway Chemical Supply Chain Service Co.Ltd(603713) , Cts International Logistics Corporation Limited(603128) , Guangdong Great River Smarter Logistics Co.Ltd(002930) , etc. with scale and management advantages.
Risk tips: the penetration of third-party logistics is less than expected, the transformation and upgrading of manufacturing industry is low expected, the measurement deviation risk of industry scale, policy risk, and the risk of information lag or untimely update
