China tops logistics industry ranking

18 February 2020

China has been ranked as the most attractive country to users of logistics services, freight forwarders and shipping lines. 

The Emerging Markets Logistics Index 2020 - based on a survey of 780 global supply chain professionals - awarded China an overall average score of 8.90 out of ten, across the three measuring categories of domestic logistics opportunities, international logistics opportunities, and business fundamentals.

This sees it come in at more than 1.5 points clear of nearest rival, India, with had an overall score of 7.39. Third-ranked country overall was the UAE, followed by Indonesia, Malaysia, Saudi Arabia, Qatar, Mexico, Thailand and Turkey.

But while China, India and Indonesia lead when it comes to domestic logistics, it’s China, India and Mexico that are top-ranked for international logistics.

Countries considered to have the best business fundamentals (based on sound regulatory environments, credit and debt dynamics, contract enforcement, anti-corruption safeguards and market access), are UAE (top with a score of 9.33), followed by Malaysia and Saudi Arabia. China fell one spot from 2019, to eighth in this category.

Notwithstanding a brief period of social unrest in 2019, Egypt made significant gains across all categories. On the overall index it rose six spots to number 20; while on the business fundamentals index it rose 10 places to number 20, and in the domestic opportunities index it rose six spots to number 13.

Despite coming top, respondents expressed unease about slowing economic growth in China and the worrying US-China trade situation. While 70% of professionals doing business in China do not plan to shrink or move their operations, of those who say they will move, 25% indicated Vietnam as their preferred country to shift operations to. Also popular was India (23%). Respondents considered India to have the best near-term logistics potential.

The rankings also revealed 42% believe a prolonged trade stand-off between the US and China would benefit south-east Asian countries which offer alternative manufacturing and sourcing facilities.

Respondents voted Shanghai, New Delhi, São Paulo, Jakarta and Mexico City to be the top five emerging megacity hubs. Nearly a quarter (23%) said modernisation of customs systems and processes will specifically drive emerging market growth [with 18% also citing increased internet penetration].

E-commerce fulfillment was considered to be the logistics service most likely to maintain or improve growth, while the main factors cited for keeping small businesses out of global trade were trade bureaucracy (17%), government/border instability (14%) and inability to compete with larger rivals (14%).

The countries considered to have least potential as logistics markets in 2020 were Syria, Iran, Venezuela, Iraq and Libya.

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