DHL plan may clear roadways of excess vehicles

DHL announced Wednesday that it would beef up distribution centers in China to make more efficient use of delivery trucks across the country, according to statements from an official with the German logistics firm Wednesday.

"Half-empty trucks line up outside shopping malls in downtown Shanghai everyday. The new shipment centers will have all the trucks fully-loaded and return with as many packages as possible," Victor Mok, DHL's chief executive officer for North Asia said in Shanghai Wednesday.

"The centers will cut down on the number of trucks stuck in the city," said Mok.

The company is holding a forum in Shanghai today to address the logistics issues faced by mega-cities.

The move comes as worsening traffic jams have put pressure on the logistics industry to improve their efficiency.

Currently, transportation fees account for 7 to 8 percent of the cost of consumer goods. And that figure will grow as traffic worsens, leading to a higher cost of living for city dwellers, Mui-Fong Goh, general manager of the Beijing branch of A.T. Kearney, a US-based consulting firm said yesterday.

Clogged roads may also impact delivery companies' quality of service if they have promised specific delivery times, added Goh.

A study of 15 cities by the Chinese Academy of Sciences showed that traffic congestion is responsible for 1 billion yuan ($148.70 million) in commercial losses each day, according to a report on chinanews.com.cn.

"The pursuit of sustainability will transform the logistics industry," said the DHL report, noting that its new centers are part of a major change in its business model.

But analysts worry that DHL's plan may fall short if the government doesn't take the lead.

"While it's important for logistics firms to navigate their way out of the traffic mess, the government still has to play its part," said Goh.

Zhu Jialei contributed to this story

Source: Global Times