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Road Freight Transportation in China: Main Problems

2005-02-11

Li Shantong& Feng Jie, Department of Development Strategy and Regional Economy of DRC

Research Report No.169, 2004

Roadsare one of the primary means of transportation in modern times, and road freight transportation is a fundamental and leading industry in economic and social development. In recent years, along with acceleration of economic globalization and intensified market competition, a highly efficient, convenient and safe road freight transportation system has become not only an important part of the regional and national investment environment but also an important factor in the competitiveness of a region or nation’s manufacturing industry.

Since the 1980s, along with China’s reform and opening-up, especially the significant reform of the highway construction and management system, China’s highway construction has seen rapid development. Through over twenty years of development, fundamental capacity and haulage level have increased significantly, with road transport occupying a large proportion of overall transport, and the position and role of road freight transport in the entire freight transportation system have also been enhanced by a large margin.

By the end of 2003, roads open to traffic throughout the country had increased from 883,000 kilometers in 1980 to 1,810,000 kilometers, more than doubling. There was also evident upgrading, with roads at and above Grade II amounting to 272,000 kilometers, or 15.0% of the total highway mileage. The length of express highway reached 29,745 kilometers, leaping to the second place in the world in terms of total length. The volume of road freight transportation was 11.6 billion tons and the turnover volume was 709.95 billion ton-kilometers, respectively accounting for 74.3% and 13.2% of the overall figures. The turnover volume of road freight traffichad an average annual growth rate of 13.9% since 1978 (while during the same period, the turnover volume of rail freight transport only registered an average annual growth rate of 4.54%, and the proportion of rail freight transport in the rotation volume of freight transport as a whole decreased from 54.4% in 1978 to 30.7% in 2002.), and the proportion of the rotation volume of road freight transport increased from 2.8% in 1978 to approximately 14% in 2003. However, the following problems in China’s road freight transportation still exist.

I. Imbalance between the Development Level of Road Freight Transportation and the Requirement of Economic and Social Development

Coordinated development oftransportation infrastructure and the transport industry and economic and social aspects is the objective requirement for putting into effect the"five balanced aspects"in the concept of scientific development. As an important carrier and the main content of the development of the logistics industry in modern times, road freight transport plays a significant role in accelerating materials circulation, shortening the transport duration of goods, reducing transportation cost, facilitating cooperation among enterprises based on division of labor and trans-regional economic communications, and pushing forward industrial transfer and the readjustment of the allocation of productive forces. Along with the rapid economic growth of China, the deepening of division of labor and regional cooperation and the increasingly intensifying material exchanges among enterprises, new requirements have been put forward for the development of a comprehensive modern logistics system. Besides, a number of large international retail groups including Wal-Mart and Pricemart have entered China, and many multinationals have also established production and procurement bases in the country, which brings an urgent demand for the development of third, even fourth party modern logistics industry. Therefore, a highly efficient, convenient and safe road freight transportation system and logistics system not only constitutes an important part of the regional and national investment environment but also is constantly becoming a significant factor in determining the competitiveness of a region or nation’s manufacturing industry. In the developed coastal areas of Eastern China, along with intensifying competition in the manufacturing industry, sophisticated logistics are becoming an important link for enterprises to reduce cost and improve competitiveness. However, because China’s road freight transport system and the logistics industry are relatively under-developed, the competitive advantages of the manufacturing industryderived from such elements of production as cheap labor power and land and the low-cost investment environment have not been brought into full play.

II. Imbalance between the Level and Structure of Freight Transport Equipment and the Requirement for the Development of High-grade Roads

Since reform and opening-up, China has made remarkable achievements in highway construction, with a drastic increase of road traffic mileage. By the end of 2003, the nationwide road traffic mileage increased 624,000 kilometers over the 1,186,000 kilometers at the initial stage of the "Ninth Five-Year Plan" period, with an average annual growth rate of approximately 7%. Moreover, the highway network has also been rapidly improved. According to China’s express highway networkdevelopment program, it is estimated that, by 2010, 55,000 kilometers of express highway will be built up, and by 2020, the mileage will be extended to 82,000 kilometers. While the scale of high-grade roads is being rapidly enlarged and the density of the high-grade road net is being increased at a great rate, the development of freight vehicles lags far behind, the structure of the hauling capacity of freight vehicles is irrational, and the overall level of vehicles cannot satisfy the requirements for the development of roads, especially high-grade roads. At present, commercial vehicles running on highways in China are generally of poor performance and irrational structure, and are quite out-of-date and worn out. The freight vehicles mainly include ordinary medium open-box wagons, while heavy lorries, van trucks, container-towed vehicles and all types of special cars and special purpose vehicles only constitute a small proportion. At the end of 2003, there were 9,246,000 road freight carriers registered at the transportation administration authorities, including 5,725,000 motor trucks, with a total tonnage capacity of 19,415,000 tons and an average tonnage of 3.39 tons. Among the motor trucks, ordinary trucks accounted for over 90%, while container-towed vehicles, peddle cars, mass freight vehicles, tankers and refrigerated vans only account for about 5%. However, in America, 70% of the road freight volume is handled by special-purpose freight cars. Viewing from the experience of developed countries in the development of road transportation, the extensive use of special-purpose freight cars can promote the development of the transport network and multimodal transportation and improve transport techniques and the level of standardization.

Besides, in China, short service life, aging and poor safety performance of vehicles also constitutes a striking problem, with out-of-date vehicles accounting for about 25% of the total.

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