China’s Logistics Efficiency Reaches Record High in 2025
In 2025, China’s logistics efficiency reached a new high, driven by expanding infrastructure investment and the rapid adoption of new technologies. These developments have significantly contributed to productivity growth in the world’s second-largest economy. The ratio of total social logistics costs to gross domestic product (GDP) fell to 13.9 per cent, marking the lowest level on record. This is a slight improvement from the 14.1 per cent recorded in 2024, according to data released by the National Development and Reform Commission.
This means that for every 100 yuan of economic output, 13.9 yuan was spent on logistics, a crucial measure of supply-chain efficiency and overall productivity. The trend reflects steady progress towards Beijing’s goal of transforming the world’s largest logistics market into a more efficient and strategic one. An action plan issued in November 2024 targets lowering the ratio to about 13.5 per cent by 2027.
Technological Advancements in the Logistics Sector
As part of this goal, advanced technologies are beginning to reshape the sector. Unstaffed warehouses, delivery drones, and artificial intelligence-driven dispatch systems are gaining traction, with pilot projects and early deployments expanding rapidly. However, many of these applications remain in the trial or early adoption stage, indicating potential for further growth.
Industry-wide penetration and depth of intelligent operations still lag behind those of leading global logistics companies, while some high-end technologies continue to depend on imported components. Despite these challenges, the integration of technology is expected to play a critical role in the continued evolution of China’s logistics sector.
Infrastructure as a Key Driver
Infrastructure also underpins China’s strengths in the logistics sector. The country has been the world’s largest logistics market for nearly a decade, with total value reaching 368.2 trillion yuan (US$53.3 trillion) in 2025, an increase of 5.1 per cent year on year in real terms. Parcel deliveries climbed to 216.5 billion, representing an 11.8 per cent increase.
China also boasts the world’s largest delivery network, driven by nearly 3,000 large logistics parks. Freight volumes on its high-speed railways, expressways, and through its ports also rank among the highest globally. These factors contribute to the country’s robust logistics ecosystem.
Comparative Costs and Global Context
Even with these achievements, China’s logistics cost-to-GDP ratio remains above that of most developed economies, which typically stand at about 8 to 9 per cent. In the United States, for instance, business logistics costs totalled US$2.6 trillion in 2024, equivalent to about 8.7 per cent of GDP, according to the State of Logistics Report by the Council of Supply Chain Management Professionals.
Beijing has stepped up efforts to restructure the sector, with reforms aimed at deepening marketisation and reducing costs, according to the China Federation of Logistics and Purchasing. The federation noted that the institutional environment has been improved in tandem with upgrades to infrastructure and the logistics standards system.
From a macro policy perspective, multiple government departments have introduced supporting measures, while local authorities have tailored implementation plans to local conditions. Regional market barriers have also been gradually dismantled, and controls on transport and freight forwarding have been eased to support the freer flow and more efficient allocation of logistics resources nationwide.
Reduction in Administrative Costs
The share of administrative and management costs also declined in 2025, the report noted, helping to improve the flow of goods and capital across the wider economy. These changes reflect a broader strategy to enhance efficiency and reduce operational burdens within the logistics sector.
Ongoing Challenges and Future Prospects
Despite the progress made, challenges remain in achieving the desired levels of efficiency and cost reduction. The need for continued investment in technology, infrastructure, and regulatory reforms will be essential in maintaining momentum. As China continues to refine its logistics framework, the focus will likely shift towards integrating advanced technologies more deeply and addressing the remaining gaps in the sector.
With sustained efforts, the country is well-positioned to further improve its logistics performance, aligning itself more closely with global benchmarks while maintaining its unique strengths in scale and infrastructure.
