Archive for August, 2006

Vice Minister of Communications Xu Zuyuan has said that the throughput capacity of Chinese seaports will grow more than 80% from the current 2.89 billion tons in the next five years. The annual throughput of Chinese ports, including seaports and river ports, will total 7.2 billion tons by 2010, up from 4.85 billion tons in 2005.

China has been investing heavily in port construction in recent years. Statistics by the Ministry of Communications showed that China had more than 1,400 ports in 2005, ten of which had a throughput capacity of 100 million tons or more. The total throughput of all Chinese ports has topped the world for the past three years.

Xu Zuyuan said, ‘The ports face new safety problems along with their expanding throughput.’ He said the throughput of dangerous goods, which accounted for 13% of the total in 2005, has grown by 20% annually in recent years. He promised that by making the port companies the major parties responsible for safety, the safety of Chinese ports would reach or approach the level of middle-income nations by 2010. Specifically, for every thousand port staff employed, fewer than 0.04 persons would be killed by workplace accidents in a year.
Source: Asia Pulse/XIC

After 23 rounds of negotiations in the past two years, FedEx’s first transit center in China is soon to be built in the Guangzhou Baiyun International Airport. The FedEx Asia Pacific Hub in Guangzhou will be the largest of its kind outside the United States. FedEx’s input into this new transit center, which covers an area of 63 hectares and has a total floor space of 82,000 square meters, has amounted to $150 million. The center is expected initially to to accommodate 20 airplanes and every week it will see 228 flights of cargo planes. The package handling capacity of the center will be 24,000 pieces per hour.

Fred Smith, Chairman and President of FedEx, said, ‘Latest estimates show booming transnational services have made Asia the most vigorous regional market for air cargo operations in the world, and this industry is expected to keep an 8.5 percent annual growth rate before 2023.’

According to Smith, China will always be the major driving force behind the growth of the Asian market due to a strong semi-finished product processing industry and the large domestic demand. He added that the country’s transportation and logistics sectors are also becoming more prosperous.
Source: Beijing Review

Dubai Logistics City wants China to see Dubai as the logical center for distribution of China’s goods. This may seem a fairly daft idea on the face of it but it has considerable merit and almost a feeling of inevitability.

To understand you need to go back to 1833. This was when the Al Maktoum dynasty of the Bani Yas tribe left the settlement of Abu Dhabi and took over the town of Dubai, ‘without resistance’. On 2 December 1971 Dubai, together with Abu Dhabi and five other emirates, formed the United Arab Emirates. The UAE has remained but the amount of ‘United’ is balanced by a certain amount of inter-emirate jealousy.

Althought there are some oil reserves in Dubai they are almost irrelevant. Where its money comes from is intelligent investment and development. Dubai and its twin across the Dubai creek, Deira, have become important ports of call for Western manufacturers. (Jebel Ali, seen here and constructed in the 1970s, has the largest man-made harbour in the world.) Most of the new city’s banking and financial centres are headquartered in the port area.

Dubai is an important tourist destination and port, but also increasingly developing as a hub for service industries such as IT and finance, with the new Dubai International Financial Centre (DIFC).

Transport links are bolstered by its rapidly-expanding Emirates Airline, founded by the government in 1985 and still state-owned. Based at Dubai International Airport it carries about a million passengers a month.

Now the Maktoums want Dubai to become the logistics center connecting, as it were, Asia and the rest of the world. Gulf Daily News reports that Dubai Logistics City is a logistics hub boasting unrivalled infrastructure. As Gulf Daily News possibly would cease to exist without the benevolence of the Maktoums that statement may be colored a little. But the intention is to woo the market of the future at Air Cargo China 2006 which will be held September 19-22 at the Shanghai New International Expo Centre.
Source: Khaleej Times.

The logistics problems facing the automotive industry in China are the same as in the rest of China’s logistics industry: an infrastructure shortage, a skills gap, problems with joint ventures, high transport costs, IT problems and below world standard levels of service.

At the recent Shanghai conference on automotive logistics the consensus was that if the market keeps growing the logistics framework — both within China and between China and its markets — will need to make a big effort to match global standards.

Louis Diebold, a former senior officer in the US Foreign and Commercial Service, said: ‘The key to success in China is really in the logistics sector. Although huge logistics challenges remain, improvements come every day. In the early 80s, there were no imports and no market competition. Everything was distributed by the government. There were hardly any cars, people were still using bicycles. Things started to change in 1985 when Volkswagen came to Shanghai with its first joint venture.’

That foreign companies need to become, or at least act like a Chinese company, was a recurrent message throughout the conference. The often stated opinion was that this means foreign companies need to find their way around red tape and if necessary partner with the right Chinese company as a joint venture.
Source: CargoNews Asia.

If you want to move cargo it normally has to be on pallets. Pallets are big business. Now Brambles Industries, probably the largest player in this area, is to launch a pallet leasing business in China. Currently, Brambles leases 200m pallets for moving goods around the world.

Brambles chief executive David Turner said: ‘The Chinese opportunity is really early. We are putting a management team on the ground, we’ve got the top four or five people in place and we are talking to customers.’

The dual London and Sydney listed group generated $3.6bn from selling its waste management, material handling and logistics businesses in the last year, and notched up a 59pc gain in operating profit from its U.S. CHEP pallet-leasing unit.
Source: Daily Telegraph.

China Air Transport Market (Investment Analysis), 2006 is a new report from Research and Markets. At the moment the report is only available in Chinese.

The report shows that air cargo is increasing at a faster rate than air passenger travel. From January to August, 2005, the total tonne kilometer (a typical way of measuring air cargo) for air transport is 16,646 billion, up 11 per cent compared with the same period of 2004. The passenger traffic is 89.5172 million persons, up 10 per cent compared with the same period last year. (Note carefully that this is no way suggests that air cargo is anywhere near as large or as important as air passenger traffic. Merely that it is expanding at a faster rate.) You can look at the figures another way. The total passenger kilometers is 131.77409 billion, up 10.5 per cent compared with the same period last year. In comparison the total freight tonne carried is 1.9017 million, up 13 per cent as compared with the same period of last year, and the total freight tonnes kilometers is 4.92079 billion, up 13.2 per cent.

This means that using almost any unit of measurement cargo carrying aviation is expanding at a faster rate than passenger aviation even though it is nowhere near as large.

The report says: ‘The reform of civil aviation system is continuously deepening and the civil aviation market is constantly developing to welcome the world. Stimulated by the growth of China’s economy, the upgrade of consuming level, and the liberalization of aviation industry, China’s air transport industry will gradually enter the stage of rapid growth, and it will go on leading the global growth for a fairly long period in the future.’
Source: Research and Markets

A major conference, Transport Logistic China 2006, will be held September 19 – 22, 2006. This is a two-yearly event the first being held in 2004. The conference will be at the Shanghai New International Expo Centre (SNIEC) in Pudong. The conference will deal with the massive expansion of logistics. Transport to and from China is booming, both on sea and in the air. For example, airfreight is predicted to increase from 12 to 15 percent annually.

A total of 214 exhibitors from 27 countries exhibited their products and services at transport logistic China 2004 with Air Cargo China 2004. There were 10,044 visitors from 54 countries.

This year the figures will be higher. This reflects the growth in logistics. According to the Transpacific Stabilization Agreement (TSA) – an association of 11 major container shipping lines in the transpacific trade – the average growth of shipments from China to the US for the first two months of 2006 was 24 per cent. TSA executive director Albert Pierce said, ‘We don’t believe the shift in manufacturing to China, South-East Asia and elsewhere in the region has run its course.’
Source: Transport Logistic

China’s fast trade growth in recent years has triggered demand for an additional capacity to handle more than 10 million TEUs annually, which surpasses the total carried by Chinese container lines while leaving a huge space for development. Li Kelin, president of China Shipping (Group) Company, in an interview with Xinhua, said, ‘Attracted by the enormous demand, all the shipping companies in the world are busy building container liners.’

About 90 percent of the world’s cargo is traded via sea transportation, and most of it is shipped by containers. For the past 20 years, every 1-percent increase in world trade has led to a 2-percent increase in containers.

Last year, Chinese ports handled 48 million TEU containers, accounting for 16 percent of the world’s total and ranking the first in the world. China’s transportation department predicted that the figure would become 57 million this year and more than 100 million in 2010.

Li Kelin noted that almost all major shipping companies in the world have entered China, leaving just 16 percent of the market share to the two leading Chinese domestic companies, including China Shipping. Li said China Shipping is working to carry more than 4 million TEUs this year and more than 5 million next year. By 2010, the company is expected to enter the top three container carrier in the world and take 15 percent of China’s container shipping market.
Source: English People’s Daily Online

Fancheng Port in south China’s Guangxi Zhuang Autonomous Region has added a highway container transport service. It has imported 15 Volvo container trailers from Sweden. This move should further improve container transport services at Fangcheng Port and lay a good foundation for developing efficient door-to-door transport services. Fangcheng Port, which is on the northern shore of the Beibu Gulf, now has 27 berths, including 12 deep-water berths.

Fancheng is considered a most convenient sea outlet for southwest Chinese regions to Southeast Asia and other parts of the world. The port built a berth late last year in cooperation with railway departments to handle containers transported to the port via trains. It has also constructed another berth, with a designed annual capacity for handling 200,000 TEUs, one of the largest of its kind in southeast China and soon due to be in service.
Source: People’s Daily

China Shipping has announced that by the end of 2010 the volume of container cargo transportation on the Pearl River in southern China will total 10 million TEUs. The Pearl is China’s third longest river running for 2,200 km and is formed by convergence of the Xi Jiang (’the West River’), the Bei Jiang (’the North River’), and the Dong Jiang (’the East River’.) It flows through the majority of Guangdong, Guangxi, Yunnan, and Guizhou Provinces and parts of Hunan and Jiangxi.

The recently released Shipping Development Plan for the Pearl River states that the Ministry of Communications and the governments of Yunnan, Guizhou, Guangdong province and Guangxi Autonomous Region will invest a total of US$1.8 billion on the construction of infrastructure at the Pearl River to cope with the increased traffic.