【正文】 ech 4%) 8 Point/Final Version/Logistics Industry Outlook final/ 15 Outsourcing of noncore business activities Organic growth of transportation markets ? Increased plexity of global supply chains ? Recognition by many shippers that supply chain strategy may be a key petitive advantage ? Willingness to outsource when logistics not seen as core petency ? Development of superior logistics capability by a few 3PLs ? Growth in demand for transportation services expands with international trade growth ? Globalization of many industries means goods need to move over longer distances at faster speeds with higher reliability Growth in Logistics Services Source: UBS Warburg, IDC Growth Drivers Details 1 2 The growth of the global logistics services industry is mainly driven by shippers’ propensity to outsource logistics services and anic transportation market growth 8 Point/Final Version/Logistics Industry Outlook final/ 16 Consumer electronics, automotive and apparel represent the most attractive opportunities for logistics services in China Note: 1. Size of circle relative to segment size in 2023 2. Analysis is indicative only Source: . Kearney field interviews and research High Low Growth (20232023) Remarks ? Highly marketoriented, need quick response to consumer feedback ? Manufacturers have to to improve operation efficiency continuously due to intense petition ? Relatively high product value and less price sensitive ? High requirement for timing and reliability of liners ? High gross margin industry, production cost and logistics account for less percentage of sales ? Prefer timely feedback from destination ports, consulting services ? Automotive supplies involve over 30,000 parts, which need consolidating suppliers to handle logistics ? Intense petition drives panies to reduce cost, current inefficiency in selfhandling leads panies to consider outsourcing services actively ? High value products, not very price sensitive, but sometimes decisions are made overseas ? Packing requirement involves technical difficulties, unwilling to outsource logistics services ? High profit industry, not very price sensitive ? High quality requirement for dry, no smell, no leaking containers, hence containerized in factory ? Clearance of cigarettes needs to be done by professional I/E panies or manufactures ? Large and special shape, therefore the way to put them into containers can impact the number of containers to be used, which directly related to cost usually done inhouse ? Cost sensitive, firms usually choose less busy season to get cheaper prices ? Frozen products and fresh products need to be handled fast with care ? Other products are lowvalue and need no special services ? Low value products, highly price sensitive ? Lower quality requirement, usually containerized at ports Consumer Electronics Apparel Automotive Machinery Tobacco Liquor Furniture Primary Goods ChemicalsMaterials Industry Low High Consumer Electronics Apparel Automotive Outsourcing Propensity Tobacco, Liquor Primary Goods Opportunity Assessment by Industry Chemicals Materials Furniture Machinery Add market and trends analysis by industry 8 Point/Final Version/Logistics Industry Outlook final/ 17 Market Size Growth China 8 Point/Final Version/Logistics Industry Outlook final/ 18 The China logistics services market is still small at US$ Bn, but will be growing rapidly over the next 5 years Logistics Outsourcing Market Gross Revenue (2023, US$ Bn) Note: Asia includes China, Japan, Hong Kong, Singapore and Taiwan Source: Bowersox and Calantone。July, 2023 COSCO IPO SUPPORT MATERIALS Logistics Services Industry Environment Trend Analysis COSCO Comments and . Kearney Remarks The contents of this document were prepared by . Kearney and may not be used, altered or disclosed to other parties, without the written permission of . Kearney. The information contained in this document has been obtained from external sources which . Kearney believes are reliable. However, . Kearney can make no representation as to the accuracy or pleteness of the information or projections derived therefrom. 8 Point/Final Version/Logistics Industry Outlook final/ 2 Table of Contents ? Executive Summary 1. Market Size Growth ? Global ? China 2. Service Demand ? Global Trends ? China Trends 3. Competitive Environment ? Global ? China 4. Regulatory Environment 5. Information Technology ? Appendix 8 Point/Final Version/Logistics Industry Outlook final/ 3 Executive Summary 8 Point/Final Version/Logistics Industry Outlook final/ 4 . Kearney’s definition of the logistics services industry Structuring and managing, on behalf of cargo owners, solutions involving some bination of parts of the supply chain (. transportation, warehousing, (de)consolidation, etc.) 8 Point/Final Version/Logistics Industry Outlook final/ 5 The logistics service industry represent a tremendous growth opportunity, both globally and in China Market Characteristic Conclusion Customers are increasingly demanding high value logistics service solutions, requiring global reach and advanced supply chain management capabilities Increasing demand for global reach and capabilities fuels consolidation as large full service providers are positioning themselves for success China‘s entry into WTO is expected to have two main implications the logistics market will grow rapidly, and petitive intensity will dramatically increase Strong IT capabilities is being a core capability of logistics services providers and is critical to building a logistics services business Market Size Growth Service Demand Competitive Environment R