Energy consumption in China’s logistics industry: A decomposition analysis using the LMDI approach

Abstract

The logistics industry plays a critical role in boosting China’s economic development, although at significant externality costs. Using the 1980–2010 data, we examine the historical evolution of energy consumption in China’s logistics industry. The logarithmic mean Divisia index (LMDI) method was used to analyze the key factors that drove the chronicle changes in logistics energy consumption in China. Changes in energy consumption of China’s logistics industry are attributed to growth in logistics activity, modal shift in freight transportation, increases in transport intensity, and overall improvements in energy intensity: (1) China’s logistics industry enjoyed fast growth with an average annual growth rate of 9.65% from 1980 to 2010. Increase in logistics activity has been the major force driving up logistics energy consumption (accounting for 48.8% of logistics energy increase); (2) Logistics energy consumption increased by 22.91 times, averaging at 11.9% growth per year. Fuel consumption in highway transportation has become more dominant in logistics energy consumption; (3) While changes in logistics activities, transportation modes and transport intensity pushed up logistics energy consumptions, improvements in energy intensity helped significantly to curb the energy rise in China’s logistics industry.