China's logistics expenditure grew 18.2 percent year on year in 2007 amid oil price increases and higher labor costs, the National Development and Reform Commission (NDRC) said on Thursday.

The growth rate represented an acceleration of 4.7 percentage points  compared with the same period in 2006.

According to the NDRC, logistics expenditure topped 4.54 trillion yuan (about 646.81 billion U.S. dollars), which contributed 18.4 percent to the country's gross domestic product (GDP) last year.

Expenditure on transport, accounting for 54.4 percent of the total spend, shot up 17.6 percent, 4.9 percentage points higher than 2006, NDRC statistics showed.

Meanwhile, storage and management fees rose 21.2 percent and 13.6 percent, respectively, year on year.

Dai Dingyi, China Federation of Logistics and Purchasing vice chairman, said domestic logistics providers would have to cut their operation costs to remain competitive in the face of increasing overseas companies now in the market.

In recent years, China has moved to promote the development of the burgeoning logistics sector amid efforts to boost the whole service industry.