Over the next few years the German air express and logistics giant DHL will invest more than $110 million in China. The investment will be used to expand infrastructure, including more transport vehicles and service center equipment, and for training its employees.

Klaus Zumwinkel, board chairman of Deutsche Post World Net, which is DHL’s parent company, announced all of this during his latest North Asian trip.
DHL is considering setting up a North Asia hub in either Shanghai Pudong International Airport or Incheon International Airport in South Korea.

Scott Price, CEO of DHL Express Asia-Pacific, said an announcement on which airport is selected will be made by the second quarter of this year. He said, ‘There is still one last filter of analysis to do. It is a very close race between the two airports.’ DHL currently has a Central Asia hub in Hong Kong and South Asia hub in Singapore.

The company’s United States rivals, FedEx and UPS, both have plans to build regional hubs in China. FedEx, previously based mainly in the Philippines, will launch a new Asia-Pacific hub in Guangzhou Baiyun International Airport in 2008.

UPS signed a memorandum of understanding with Shanghai Airport Group last year to establish the UPS International Air Hub at the Pudong airport.

China is one of DHL’s fastest-growing markets, accounting for 25% of its revenue in the Asia-Pacific and 10% of its global sales.
Source: China Daily

Last year China maintained its position as the world’s third-biggest shipbuilder, a rank it has held for 12 consecutive years. Ship export volume surged 74% to $8.11 billion.

Two leading domestic shipbuilders, Dalian Shipbuilding Industry and Shanghai Waigaoqiao Shipbuilding became world top-10 shipbuilders, joining a list that was before the sole domain of Japanese and South Korean companies.

Nie Lijuan, managing deputy secretary-general of China Association of National Shipbuilding Industry, said, ‘China’s position as the world’s third-largest shipbuilder is totally different from that 10 years ago. The country has significantly improved its shipbuilding competitiveness.’

Chinese shipbuilders produced 14.52 million deadweight tons last year, nearly 20% of the world’s total, compared to only 6% in 2000. Types of made-in-China ships have developed from conventional bulk carriers and crude oil tankers into high value and sophisticated vessels, such as very large crude carriers (VLCCs), liquefied natural gas carriers and high-speed container ships.
Source: China Daily

A government-lead international logistics expo will be held during May 23 - 25, 2007 at Suzhou International Expo Center, Suzhou, Jiangsu Province. (The illustration is a stand within the center.) It will also have an alternate name to Logistics World 2007: Logistics World 2007 — Suzhou China. It is authorized by the Ministry of Science and Technology.

A modern logistics industry has become a new focus of development in Jiangsu Province According to China Custom’s figures, Jiangsu’s total I/E value in year 2006 is the second highest in China, amounting to US$284 billion — 24.6% higher than the same period of previous year.

300 exhibitors and prospective exhibitors will come from three main sectors: logistics technology, logistics equipments and logistics services. The Expo will also feature a series of concurrent events, including conferences of logistic projects cooperation, procurement and other professional value-added services.
Source: More RFID

A report from the Ministry of Science and Technology states China will develop its own magnetically levitated (maglev) trains that can travel at speeds of up to 500 kilometers per hour. It said a 30-kilometer-long test line will be built before 2010.

They will almost certainly happen because they are listed in the ‘national scientific and technological support projects’ of the 11th Five-Year Plan period (2006-2010).

Wang Xiaofang, director of the ministry’s planning bureau said this aims in part to ’solve crucial science and technology problems that hamper China’s economic and social development.’

China built a 30-kilometer-long maglev link from Shanghai to the city’s main airport, Shanghai Pudong International Airport, in 2003 using German technology. China has put 15 of its new ‘bullet’ trains into service to help deal with the crush of passengers before and after the Chinese Lunar New Year’s Day. The current ‘bullet’ trains have a maximum speed of 200kph.
Source: Xinhua

Serious money is being invested in Tianjin East Port, the new part of Tianjin Port which is now nearing the end of its first phase of construction.

Nine agreements of intention have been signed with 12 companies including HSBC, China Merchants Bank and Mapletree Logistics: all early investors in the Tianjin East Port project since the beginning of June 2002.

Hao Yunhui, deputy director of the Department of Investment with Tianjin Port said, ‘Investors from home and abroad are showing great interest in the East Port thanks to its high potential for economic growth.’

The investment agreements come as the first 4 square kilometers of the port are about to come into use. A further 16 agreements of intention were expected to be signed in the near future.

The Tianjin East Free Port, with an expected area of 10 square kilometers will be the largest free port in China. The State Council approved the free port in the Tianjin East Port on August 31 last year. It is the second free port to be established after the 8-square-kilometer Shanghai Yangshan Free Port. But the Tianjin East Free Port will enjoy more preferential policies on financing and tax than the Yangshan Free Port.

Yu Liming, director of business development at China Merchants Holdings  said, ‘There is huge potential, and the business environment here is maturing.’The company has made an initial investment of RMB1 billion to support logistics and processing in the first phase of the Tianjin East Port. HSBC is also considering joining the port, but no figure has yet been set.
Source: English People.com

Following its recent deal with China Railway Express International Logistics (CREIL) for handling traffic via Nathula, the border pass in Sikkim with China.

Mahendra Agarwal, the CEO and managing director Gati Ltd, the express distribution and supply chain management firm, expects strong growth in the South and South East Asian region of Gati. He said the company would handle all cargo import from Lhasa through the border trade post of Nathula and from there to Kolkata port.

Gati, which is the first Indian company to sign a deal with CREIL, will be able to reach the remotest provinces of China and Tibet. The deal was signed in January. The illustration is not strictly pertinent but it does run on that line and it is a most marvellous steam engine.
Source: Financial Express

Research and Markets in its China Third Party Logistics Market Report, 2006 states that China’s external logistics reached a total value of RMB48 trillion in 2005, 25.2% more than the previous year.

Industrial product logistics developed fastest whereas the agricultural product logistics increased slowest, and its proportion was rather small.

The total expense of China’s external logistics is rising and is up in the first half of 2006 from the same period last year. This mainly because of the sharp rise in the price of energy which led to a commensurate rise in transportation fees.

However, the ratio of the total expense of external logistics to GDP continued to drop from 18.6% in 2005 to 18.4% in the first half of 2006, down by 0.2%. This is a a very small drop and the figure is still far, far higher than other developed countries where single digits are the norm.

More and more global logistics corporations began to establish bases or distribution centers in Asia Pacific, such as UPS, FedEx, DHL, TNT, Exel, APL, BAX, Maersk, and SchenKer.

Meanwhile, due to the rising price of petroleum and the increasing investment in facility and technology, the operation cost of logistics enterprises will increase dramatically.
Source: Digital50

Grand Power Logistics Corp has expanded in China through its wholly-owned subsidiary GP Express International (GP Hong Kong). GP Hong Kong has opened a subsidiary company of its own in Shenzhen called GP Shenzhen.

GP Hong Kong said it will invest up to HK$5 million in the new subsidiary to further develop its presence in the region.

‘We are pleased with our progress in China …’ said Ricky Chiu, President and CEO of Grand Power Logistics. ‘Although the air cargo sector in Hong Kong continues to grow, we see that there is faster growth and many excellent opportunities for Grand Power in the PRD region, now that we are much closer to many of the world-class manufacturers and exporters.’

GP Express started operations in March 2002 mainly as an air freight forwarding company, but also provides other services such as sea freight services, customs brokerage, and warehousing and distribution.
Source: CCNMatthews PR 

According to Korean Donga.com, the Chinese shipping industry recently overtook the Korean industry in bulk freight and container freight.

France-based shipping intelligence firm, AXS-Alphaliner, said yesterday, that China Shipping and Cosco ranked 6th and 7th in the world in terms of cargo capacity. They recorded 406,000 TEUs and 390,000 TEUs respectively. China Shipping registered an annual growth of 24.5% and Cosco grew by 10% annually between 2000 and 2006.

Korean shipping companies, in contrast, experienced a drop in profits last year. Hanjin Shipping, for example, posted profits of KRW149.1 billion, a quarter of the profits it recorded in the previous year. 
Source: Donga.com

Less than a year after beginning service, a new service to Shanghai, Alexander & Baldwin, parent of Matson, said its foray into China is profitable. It helped boost the overall company’s fourth-quarter net income 15.4% over the previous year.

Allen Doane, chairman and chief executive of A&B, said, ‘The momentum of this service affirms our belief that Matson has established a superior reputation in China less than a year after its entry into that burgeoning marketplace.’ Matson began service to China in February.

Allen Doane said, ‘2006 was a good year for Alexander & Baldwin, and it ended on a particularly positive note, providing momentum and a firm foundation for growth in the coming year.’

San Francisco-based analyst Jason Kremer of Caris & Co. said A&B’s China operation is proving more successful than initially expected. He said, ‘They have a superior service in that their ships can do the routes in less time (10.2 days) than their competitors. Basically, the key for them is to be able to leverage that value add, which they have not been able to do yet to get higher rates going forward. If they can get a better mix of products or find companies that are willing to pay up for the quicker shipments, that would even be better.’

A&B Chief Financial Officer Chris Benjamin said Matson’s ships can get goods from Shanghai to Long Beach faster than its competitors, not because Matson’s vessels are any faster but because most of its competitors make a couple of stops along the way.

He said, ‘We can get the cargo off the ship and to our customers two to three days faster than our competitors because we have non-stop service and a dedicated terminal for unloading the cargo.’
Source: Honolulu Star Bulletin