How AI, delivery drones helped China cut logistics costs to a new low

China’s logistics efficiency hit a new high in 2025, as expanding infrastructure investment and rapid adoption of new technologies supported productivity growth in the world’s second-largest economy.The ratio of total social logistics costs to gross domestic product fell to 13.9 per cent in 2025 – the lowest level on record – down from 14.1 per cent in 2024, according to data released by the National Development and Reform Commission.That meant 13.9 yuan (US$2.01) was spent on logistics for every 100 yuan of economic output, a crucial measure of supply-chain efficiency and overall productivity.The trend highlights 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.As part of that goal, advanced technologies have begun 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.Many of these applications remain in the trial or early adoption stage, suggesting potential for further growth. Industry-wide penetration and depth of intelligent operations lag behind those of leading global logistics companies, while some high-end technologies continue to depend on imported components.Infrastructure also underpins China’s strengths. 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, up 5.1 per cent year on year in real terms. Parcel deliveries climbed to 216.5 billion, an 11.8 per cent increase.