Logistics Demand Continues to Grow as China's Logistics Sector Remains in Expansion

October 12, 2026— China's logistics sector continued to show signs of improvement in September, supported by rising demand and stronger business expectations. The China Federation of Logistics and Purchasing reported that the country's Logistics Prosperity Index reached 51.5% in September, up 0.6 percentage points from the previous month. The index remained in expansion territory for the fifth consecutive month, while the new orders index continued to rise for a seventh straight month.

Logistics Demand Expands as Market Activity Improves

Logistics plays a critical role in connecting manufacturing, distribution and consumption. Changes in logistics activity can therefore provide useful insights into the performance of the wider economy.

Data released for the first eight months of 2026 showed that China's total social logistics value reached 243.6 trillion yuan, representing a year-on-year increase of 4.9% in comparable prices.

Industrial goods remained a major source of demand. The value of industrial goods logistics increased by 5.3% year on year during the January-August period, outpacing the overall growth rate. Continued development in advanced manufacturing, electronics and equipment production has generated additional demand for transporting raw materials, components and finished products.

E-Commerce and On-Demand Delivery Support Consumer Logistics

The continued expansion of online shopping is creating opportunities for e-commerce logistics, warehousing, parcel delivery and on-demand distribution services.

Consumers increasingly expect faster deliveries, more transparent shipment tracking and reliable service. In response, logistics companies are adjusting warehouse locations, delivery routes and last-mile distribution networks to improve efficiency and service quality.

China's online retail sales of goods increased by 4.3% year on year in the first eight months of 2026, providing further support for e-commerce logistics. Online food sales remained particularly active, while integrated warehousing and distribution, community delivery and instant retail services continued to develop.

Logistics networks are also extending further into rural areas and smaller cities. Improved distribution infrastructure can help local businesses reach wider markets, support agricultural product sales and improve access to consumer goods.

Cross-Border Transportation Remains an Important Growth Driver

International logistics is becoming increasingly important as global trade patterns and supply chains continue to evolve.

During the first eight months of 2026, China-Europe and China-Asia freight trains operated a combined 24,605 trips, an increase of 9.7% year on year. Air cargo and mail volumes on international routes also rose by 11.8%.

Multimodal transportation is gaining momentum, with stronger connections between rail, road, sea and air freight. Better coordination between transport systems can reduce delays, improve cargo handling and help companies respond more effectively to disruptions in international supply chains.

The expansion of international logistics corridors is also increasing demand for efficient customs clearance, warehouse management, shipment tracking and integrated supply chain services. Companies with established international networks and strong digital capabilities may be better positioned to benefit from these opportunities.

Digital Transformation Becomes a Key Industry Priority

As shipment volumes grow and customer requirements become more complex, logistics companies are investing in digital and intelligent operating systems.

Technologies such as automated warehouses, intelligent sorting equipment, route optimisation and real-time logistics tracking are increasingly being used to improve daily operations.

Digital management can help businesses forecast cargo volumes, make better use of vehicles and warehouse capacity, and reduce unnecessary transportation, excess inventory and labour costs. Integrated supply chain services are also becoming an important way for larger logistics providers to improve customer retention and competitiveness.

However, growing demand does not guarantee higher profits for every company. Transportation, warehousing, labour and energy costs continue to affect operating performance, while intense price competition remains a challenge in some market segments.

Improving productivity, controlling costs and developing higher-value services will therefore remain essential for sustainable growth.

Positive Industry Momentum, but Challenges Remain

The continued expansion of China's logistics prosperity index and the steady increase in total social logistics value point to improving demand, resilient industrial transportation and growing cross-border activity.

Looking ahead, manufacturing upgrades, online consumption, international transport networks and infrastructure investment are expected to provide additional support for the sector. However, the extent to which rising demand translates into stronger profitability will depend on market conditions, cost management and coordination across supply chains.

Overall, continued growth in logistics demand is helping support China's economic activity. The industry's next stage of development will involve more than increasing shipment volumes. Greater transportation efficiency, lower overall logistics costs, greener operations and more resilient supply chains will be equally important to long-term growth.