Based on the geographical differences between supply and demand locations for bulk commodities in China, bulk logistics facilitates the physical flow of these commodities from suppliers to demand centers, supporting the sustainable development, cost reduction, and efficiency enhancement of secondary industries such as manufacturing, construction, and electricity production and supply.
Currently, the bulk logistics market boasts a trillion-yuan scale, representing a new blue ocean within the logistics industry. China’s bulk commodity industry is vast, with complete industrial chains and promising prospects fueled by policy initiatives.
1. What is Bulk Logistics?
“Bulk commodities” refer to non-retail material products that can enter the circulation sector. They possess commodity attributes, allowing for large-scale trading and are primarily used in industrial and agricultural production and consumption. The scope of bulk commodities mainly encompasses nine categories: non-ferrous metals, metallic ores, mine construction materials, coal, coke, oil, natural gas, steel, and cement.
“Bulk commodity logistics” refers to the process of organically integrating basic functions such as transportation, storage, loading and unloading, handling, packaging, distribution processing, distribution, and information processing based on the actual needs of bulk commodity-related businesses, enabling the physical flow of bulk commodities from suppliers to demand centers.
2. Current Development Status of the Bulk Logistics Industry
On April 22, the Yunlian Research Institute officially released the “Bulk Logistics Development Research Report,” which examines the development trajectories and underlying logic among bulk policies, trade flows, logistics, and supply chains from a logistics perspective. Here are the core viewpoints extracted from the report to provide an overview of the bulk logistics industry:
Core Viewpoints:
- Integral Part of China’s Logistics Industry: The annual transportation volume of four major bulk categories (sandstone, coal, steel, and grain) exceeds 20 billion tons, significantly different from other general cargo categories. Logistics scenarios primarily focus on the upstream of industrial chains.
- Diverse Industrial Chains and Participants: Different bulk commodities have distinct industrial chains, each with numerous market participants. These participants can be categorized into three groups: production and trade (trade flow layer), physical delivery (logistics layer), and ecological support (support layer), each fulfilling specific roles while interpenetrating.
- Significant Variations in Industry Status and Logistics Models: The production, origin, flow direction, and logistics models of grain, coal, steel, and sandstone vary significantly across sectors.
- Large-Scale Market with Over a Million Vehicles: Under the “dual carbon” policy, new energy and clean energy heavy-duty trucks are being applied in bulk logistics scenarios due to their low carbon emissions and economic benefits, but they still have disadvantages and cannot replace diesel-powered trucks in the short term.
- Future Industry Consolidation and Cost Reduction: The concentration of bulk commodities such as coal and steel will increase, with shippers entering the logistics sector to promote cost reduction and efficiency enhancement.
Key Points:
- Transportation Volume Exceeding 20 Billion Tons: The top four categories (coal, steel, sandstone, and grain) account for over 20 billion tons of annual transportation volume, occurring primarily at the upstream of industrial and agricultural supply chains.
- Participants and Interpenetration: Each bulk commodity has its unique industrial chain with various participants categorized into production and trade, physical delivery, and ecological support, working together and influencing each other.
- Grain Market Segmentation: Grain production is concentrated in Northeast and North China, while consumption is in East, South, and North China, resulting in a “north-to-south” and “central-to-west” transportation pattern.
- Vehicle Analysis: Over a million vehicles are used in bulk logistics, with new energy and clean energy heavy-duty trucks gaining traction but still unable to fully replace diesel-powered trucks due to limitations in range, refueling efficiency, and infrastructure.
- Future Trends: Industry consolidation and shippers entering the logistics sector will drive cost reduction and efficiency enhancement.
3. Future Outlook for the Bulk Logistics Industry
As upstream production materials for secondary industries, bulk commodities support the development of China’s manufacturing, construction, electricity production, and supply sectors. With the secondary industry accounting for 39.9% of GDP in 2022, bulk logistics plays a crucial role in reducing logistics costs and enhancing efficiency. The “14th Five-Year Plan for Modern Logistics Development” aims to establish a backbone logistics infrastructure network centered on national logistics hubs by 2025, further optimizing regional logistics efficiency and reducing costs.
As China’s bulk logistics industry undergoes mergers and acquisitions, leading enterprises will expand their production scales, and logistics operations will be centralized under group management. Many giants are turning their attention to bulk logistics, leveraging trade, logistics, finance, and digitization to integrate upstream and downstream supply chains, presenting a promising future.
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