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China's logistics costs up 18.7 pct in Jan.-Sept. period

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BEIJING, Oct. 21 (Xinhua) -- China's logistics costs jumped 18.7 percent in the first three quarters to 5.8 trillion yuan (around 909 billion U.S. dollars) on surging prices, interest rate hikes and booming demand, according to a report issued Friday.

Spending on logistic services rose to 18 percent of the country's gross domestic product (GDP), up from 17.9 percent last year, the China Federation of Logistics and Purchasing (CFLP) said in a report published on its website.

The growth rate of total logistics costs, higher than the first half's 18.5 percent, increased by 3.8 percentage points from the same period last year, the CFLP said.

Chinese people spent 3 trillion yuan in moving goods, an increase of 15.4 percent year-on-year. Storage costs hit 2.1 trillion yuan, up 23.8 percent from the same period last year, while management fees reached 710.7 billion yuan, up 19 percent, it said.

The report attributed high expenditures to rising costs for raw materials, fuel, labor, loans and inefficient capital use by logistics companies as well as the public's surging demand.

The report cited rising fuel costs as an example. In September, diesel prices jumped 22.9 percent from a year earlier and gasoline prices rose 17.4 percent.

China's inflation rate slipped to 6.1 percent in September, falling further from a three-year high of 6.5 percent in July, but still well above the full-year target of 4 percent set by the government.

To rein in inflation, the central bank has hiked the benchmark interest rates three times this year and increased the reserve requirement ratio six times, pushing up companies' financing costs.

But logistics companies did not raise freights accordingly, due to fierce competition, the CFLP noted.

Revenues for the logistics sector climbed by 29.6 percent in the first eight months from a year earlier, while costs surged 31.4 percent, according to the report.

For logistics enterprises, costs will continue growing faster than revenues in the near future, but will not dampen the sector's development, the CFLP said.

The association forecast that total logistical expense will grow 13 percent, and the sector will add 14 percent more value to the economy this year.

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