Archive for December, 2007

First came a preliminary suggestion that it would happen. Then came the final news. YRC Worldwide (formally Yellow Roadway which you may think a more memorable name) will acquire 65% of Shanghai Jiayu Logistics for between US$29.5 million and US$43 million, depending on Jiayu’s final 2007 figures.

The deal will not be totally complete until 2010 when YRC plans to purchase the remaining 35% interest in for around US$32 million.

Shanghai Jiayu Logistics is one of the largest providers of LTL ground transportation services in China, with a network of more than 3,000 vehicles serving more than 30,000 customers.

(For those wondering what LTL stands for it is a shipment that is ‘less than a truckload’. Cargoes from different sources are usually consolidated to save costs.)

YRC Worldwide chairman, president and CEO Bill Zollars, seen here, said, ‘China continues to be one of the fastest growing markets for our customers and an important part of YRC Worldwide’s overall strategy. The acquisition of Jiayu allows us to provide reliable ground transportation and is the next step in building a comprehensive portfolio of logistics services for our customers in China.’

Jiayu’s management will remain with the company.
Source: Eye for Transport

Sinochem Fertilizer, together with the port authority, will build a fertilizer logistics center in the North of China Yantai Port providing one-stop services including export, import, entrepot, distribution, transit transport and clearing.

According to the contract, Sinochem Fertilizer will hold 51% of the equity interest.

Sinochem Fertilizer will bring into the partnership its experience in distribution network operation and export and import of bulk cargo; whereas Yantai Port will bring in its advantages in logistics operations and locality.
The two parties aim to further develop the strategic partnership through Sinochem Fertilizer’s strategic integration of the upstream and downstream sectors.

So far, Yantai Port has developed direct shipping links with over 100 ports in more than 70 countries.

In 2006, Yantai Port handled over 100 million tons of bulk cargo and 1.152 million containers, ranking it one of twelve national hundred-million-ton ports with its container handling power ranking it one of the nation’s top ten.
Source: Fibre2Fashion

Plans for a four-lane highway from Hanoi to Kunming (shown here) appear to be moving apace now that the Asian Development Bank has agreed to a loan that will underwrite the Vietnamese side of the project.

The aim is the highway will be completed by 2012 which will give a direct route between northern Vietnam and southern China reducing the journey time from three days to nine hours.

Goods made in China’s Yunnan Province will gain quick access to the Vietnamese seaport of Haiphong, and Vietnamese exporters will be given the opportunity to reach untapped markets in China.

Ayumi Konishi, the Asian Development Bank’s country director in Vietnam, said, ‘Both countries are reaping the fruits of peace and cooperation, In one generation, they have moved from tanks and troops to trade and tourism.’

That neat bit of alliteration at the end does sound like the work of a good PR person.

The is the bank’s biggest single-project loan — $1.1 billion — to finance the 244-kilometer stretch of the highway from Hanoi to Lao Cai on the border with China. The Vietnamese government is contributing $100 million to the low-interest loan, to be paid off over 32 years.

The construction will add a section to the ambitious Asian Highway program under which 27 Asian countries have agreed to build a 140,000-kilometer network of roads that meet minimum uniform standards.

Improved transport connections could entice more investors into Vietnam, where lower wages than in parts of China give workers a competitive edge.

The Vietnamese government has placed a high priority of the development of its northern provinces. The four provinces the highway traverses — Vinh Phuc, Phu Tho, Yen Bai and Lao Cai — have poverty rates as high as 34%, compared with a national average of 20%. The construction of the highway is expected to cut poverty rates significantly.The highway will be a toll road that is expected to generate enough revenue to pay off the loans within a decade after it opens, the ADB said.
Source: International Herald Tribune

DHL’s parent company, Deutsche Post World Net (DPWN), will buy the remaining 50% of Sinotrans-Exel, which is a joint venture, in China.

Exel and DHL business units will be amalgamated under the DHL Logistics brand in China.

Peter Landsiedel, DHL Global Forwarding’s Asia-Pacific CEO,, said, ‘DHL and Sinotrans have had, and continue to have, an ongoing and mutually beneficial relationship in the logistics and express industry in China.

‘The agreement to sell its 50% stake in the Sinotrans-Exel JV is strategically relevant to each organisation, and is a move that suits both groups’ long-term objectives and approach towards developing and maintaining a market leadership position in China’s booming logistics industry.’

Last month, DHL announced a US$175 million investment for its new Shanghai-based North Asia Hub, bringing the company’s total recent investment in the region to just over US$2.2 billion.

Victor Mok, DHL Global Forwarding’s senior vice president for Greater China, emphasized that Sinotrans and DHL Logistics remain strong business partners, and future collaborative efforts will be in line with both groups’ China expansion plans.
Source: Eye for Transport

There is a railway 9,000km long directly linking the booming Chinese market with producers and consumers in Europe eight to 10 time zones away.

This is the Trans-Siberian Railway and it has a problem — bureaucratic problems in Russia.

Even so, private rail operators in Russia are keen to tap into the railway’s potential as the cheapest and most reliable route for goods heading both east and west.

Izi Karasu, director of logistics at Procter & Gamble in Russia said, ‘Rail is something that could be significantly preferential over other types of transport, as it’s quite precise. ‘If the products get loaded and there are no issues at the border, you get the goods in good time.’

President Vladimir Putin has given his political blessing to a huge reform program by Russian Railways, the state monopoly known by its Russian acronym RZD. This will involve sinking more than $500 billionn into the ageing rail network to modernize tracks, build 20,000km of lines and buy 1 million freight cars by 2030.

Perhaps. Possibly. Maybe. According to analyst such integration is a long way off pointing to a lack of co-ordination along the value chain, bureaucratic inefficiencies, failure to co-ordinate regional authorities inside Russia, and the fact that the much-touted investment programme has yet to be delivered.

Joerg Schreiber, head of Mazda’s Russia office said, ‘We are of course aware of the fact that the Trans-Siberian Railway might offer an attractive alternative. However, practical implementation meets many obstacles, such as weather conditions and the availability of suitable rail carriages.’

Tariffs and customs procedures remain cumbersome and unpredictable, with goods waiting for border clearance from two days to up to two weeks and beyond. Co-ordination is lacking between rail operators, ports and regional officials.

Eduard Faritov, transport analyst at Renaissance Capital, the Moscow-based investment bank said, ‘There is a lack of co-ordination for the entire chain.’
Source: Financial Times

Liu Xiaoming, deputy director of Beijing’s municipal committee of communications promises that all of the people living within Beijing’s Fourth Ring Road and that is a large slab of the population — will never be more than about one km from a subway station once a new citywide mass-transit rail network is completed in 2015.

By that time, 8 million people will use the subway every day; at the moment the figure is 2.9 million.

The forecast is that by by 2015, about 45% of all journeys made in the capital, including those by bus, will be on public transport. That is compared to 34.5% at present.

Ten new subway lines are currently under construction although most of them will not be completed until after the 2008 Olympics.

Two — Line 10 (which includes the branch going through main Olympic venues) and the airport rail line — will be opened ahead of the Games.

By next year, the total length of the city’s subways will be 200 km.

This year, the price of a standard bus ticket was reduced to RMB0.4 (5 cents) for public traffic card holders and a subway ticket to RMB2, making Beijing one of the cheapest places in the country for public transport.

Liu Xiaoming said, ‘The investments and efforts have stopped Beijing’s traffic situation from deteriorating, and in some areas have actually seen improvement.’ Much improvement is still needed to make the traffic relatively civilized.
Source: People’s Daily Online

Trucks are the mules of China’s spectacularly expanding economy — ubiquitous and essential, yet highly noxious.

Trucks in China burn diesel fuel contaminated with more than 130 times the pollution-causing sulfur that the United States allows in most diesel.

The 10 million trucks on Chinese roads, more than a quarter of all vehicles in China are a major reason China accounts for half the world’s annual increase in oil consumption.

Cleaning up truck pollution presents complex problems for China’s leaders.

Forcing businesses and farmers to buy more expensive vehicles could put a drag on the economy. Oil giants like Sinopec, losing money on every gallon of diesel they refine because of the low sales cost, upgrade refineries slowly, if at all.

Evan Jia, a Sinopec spokesman said, ‘Sinopec is trying our best to purchase low-quality crudes - much heavier and more sulfur content. We buy those kinds of crudes to lower the purchasing cost.’

Low state-subsidized diesel prices frequently make trucks more cost-effective than trains, which pollute less. Demand for diesel at service stations is so great, and supplies are so tight, that rationing and shortages have become common.

Since 2000, sales of heavy-duty trucks have risen sixfold while car sales have risen eightfold.

Mainland Chinese atmospheric scientists concluded in an analysis this year in The Journal of Environmental Sciences that in Guangzhou, particles were the pollutant farthest out of line with air-quality norms 226 days a year.

A separate academic study of diesel exhaust in Guangzhou found that Chinese trucks put out particles in unusually large quantities and sizes. For the very long, thorough and balanced article click on Source.
Source: International Herald Tribune

The New Baiyun International Airport in Guangzhou expects to triple tonnage from last year’s figure within three years. This, after the completion of a new cargo terminal, a new runway and express operator FedEx’s Asia-Pacific cargo center.

New Baiyun handled 653,000 tonnes of cargo and post parcels last year, a rise of only 8.6% over 2005, a relatively low figure compared with other China airports.

But overseas-bound cargo traffic has been rising by an average 50% annually since the opening of the new airport in August 2004.

Liu Zijing,general manager of the Guangdong Airport Management Corporation (GAMC). Said, ‘The new airport has been developing well and fast over the past three years and should become a hub for international flights by 2010.’

Liu Zijing believes New Baiyun willl handle two million tonnes of cargo by 2010, three times last year’s figure, and four million tonnes by 2020.

The new cargo terminal, with an annual handling capacity of 500,000 tonnes, will be completed next year; construction of a third runway and a new passenger terminal will start in 2008; and FedEx’s cargo hub will be completed in the latter half of 2008.

The new airport is also setting up feeder cargo stations, a logistics park and a new administrative center, and opening more international routes, streamlining Customs services and holding talks on the building of a network of network of expressways for speedier cargo flow from other provinces in the Pearl River Delta.

The amazing illustration comes from the SOVINFORMSPUTNIK via the PLA.
Source: CargoNews Asia

Approval has been given for a bridge connecting Shanghai’s Chongming Island and Jiangsu Province. The plan is part of a regional strategy to further integrate Shanghai with neighboring Jiangsu and Zhejiang provinces.

The bridge will span 7 km of the Yangtze River, linking Shanghai’s Chongming Island to the city of Qidong in Jiangsu.

The Shanghai section will be linked to an ongoing project connecting mainland Shanghai with Chongming Island by tunnel, bridge and expressway.

It is hoped that it will be completed by 2009 when it will cut travel time between Pudong and Chongming to 20 minutes. It would also cut travel time between Shanghai and Qidong to just over an hour and put any major city in Jiangsu Province within three hours’ drive from the municipality.

According to the city’s Labor Daily, construction on a bridge between Chongming and Qidong would officially start next year and finish in 2010. The construction would eventually become part of a highway network connecting Shanghai and Xi’an, Shaanxi Province.
Source: People’s Daily Online

It has been a long time a’coming but it looks as though the Beijing-Shanghai express railway will happen although not in the immediate future. Bids have been invited for the project, which is to begin construction in January.

The Beijing Shanghai Express Railway Company has just invited global firms and organizations to compete for the project consulting work.

Which does not give anyone very much time to get a proposal together if work is starting in January.

Two other contracts, for civil construction and engineering supervision work, are limited to domestic institutions and companies.

The bidder for the global contract could also be a joint venture of one foreign consulting institution and two local ones, with the Chinese side as lead bidder.

Bidding closes on December 17 which is less than a week from now. At a guess the decision has already been made or there will have to be an extension on the deadline.

Construction is projected to take five years. The RMB160 billion yuan (US$21 billion) project seriously looks like becoming a reality.

The Beijing Times, citing sources familiar with the situation, said the Ministry of Railways would provide 78.9% of funding, significantly more than the 51% proportion mentioned in earlier reports. The remainder of the funding would come from local governments and companies.

The project will provide five-hour express services between the two cities. The 1,318-kilometer high-speed railway, when completed, will be the longest high-speed rail line in the world carrying 160 million passengers annually.

Source: People’s Daily Online