Consumer demand for all kinds of products may be rising in China, but for producers trying to get their goods to market the system is cumbersome, costly, and slow. The country’s transportation and logistics sector is only just developing—historically, state-owned producers tended to transport their own goods, and logistics services were rudimentary or nonexistent. Today, the sector cannot meet the demands placed on it, but the government is now jump-starting its growth, taking steps that will create opportunities for transport and logistics competitors inside and outside China.

As it stands, the sector is in low gear. Ships and railroads, long used for moving commodities and bulk goods rather than finished ones, are slow and inflexible. Most plants in China lack rail sidings, and the country has neither an intermodal rail system, which would allow truck-borne containers to be loaded onto rail wagons, nor modern trucking networks, such as a less-than-truckload system, to ship consumer goods efficiently.

Air services don’t provide much of an alternative, because domestic air routes are circuitous and flights to some areas infrequent. Moreover, freight forwarders rarely provide support services, such as local pickup and delivery. For domestic parcel and express services, one overstretched supplier—China Post—dominates...