China introduces a new class of Non-Truck-Owning-Carriers to reduce logistics cost and improve efficiency

In line with PRC’s 13th Five-Year-Plan and “Internet+” initiative, the Ministry of Transport launched the Non-Truck-Owning-Carrier program as a one-year pilot beginning December 2016. The NTOC program requires participants to utilize technologies such as mobile internet connectivity to build their logistics information platform.

The NTOC will sign transportation contracts with shippers and undertake all responsibilities and obligations of a carrier. They are recognized as logistics companies and will pay value added tax based on “transportation service” rendered. Dangerous goods transportation is excluded from the pilot program.

NTOC’s are encouraged to offer innovative logistics services such as intermodal freight transportation combining road-railway, road-water and road-air, drop and pull transport, joint distribution of both full truckload and less-than-truckload transport, and other advanced transport modes.

(Forwarder Law)