Archive for April, 2008

This is a worry. There are already signs that high Chinese logistics costs are expected to rise further and, if they do, there is little doubt that they will affect Chinese Export effectiveness.

85% of delegates at this year’s Automotive Logistics China conference, representing vehicle manufacturers, suppliers and logistics providers, say they expect the real price of logistics in the region to rise over the next five years.

Chinese logistics costs are already high at 18.5% of GDP, nearly double that of more developed markets.

Robert Strain of GM Asia-Pacific told delegates that vehicle manufacturers and logistics suppliers would have to cooperate closely to limit price increases to help maintain China’s competitiveness, in the face of an appreciating currency and rising labour and fuel costs.

The survey revealed that China’s biggest vehicle export market is expected to be Russia, and new transport routes are emerging between the two countries.
Source: Just Auto

Chinese logistics provider Tianjin Binhai Teda Logistics is to got listed on the growth enterprise board of the Stock Exchange of Hong Kong in the next few days.

It plans to issue 88.6 million shares or 27.56% of its enlarged capital stock for US22 cents to 27 cents apiece in its IPO.

All the shares will be sold to investors through placement. Which seems to mean individual investors do not get a look-in until later. And it will issue an additional 13.29 million shares if necessary.

Chairman Zhangjian disclosed that Tianjin Port Development Holdings had subscribed 20 million shares in his company which gives you about a quarter of the stock sold before you start.

The money will pay the debt it owes to banks and fund its construction of cargo holds. Also, the company plans to enlarge its facilities for the rolled steel purchase business in Northeast China.

Headquartered in the Northern Chinese city of Tianjin, Tianjin Binhai Logistics has set up logistics centers in key coastal cities like Dalian, Shanghai and Wuxi and serves more than 600 clients.
Source: Trading Markets

Shipping giant China Cosco Holdings will add 64 vessels to its fleet of 144 container ships this year.

China’s top ship line will raise its 2008 capital expenditure by 37% to $3.32 billion to expand its fleet and port investments.

China Cosco’s net profits more than doubled last year, going up 134% (these three digit increases have astoundingly become commonplace) to $2.78 billion, compared with $1.14 billion in 2006.

Much of the increase in profits was attributable to China Cosco’s acquisition of a subsidiary owned by its parent company, Cosco Group, which owns the world’s largest dry-bulk shipping fleet.
Source: CargoNews Asia

Each year an RFID (Radio Frequency IDentification) Buyers Guide in China is published with a comprehensive listing of RFID products and their vendors.

As in over thousands of manufacturers and distributors of RFID label, hardware and software, as well as system integrators, institutions and research groups. 300 pages just to tell you about some little tags and how they can be read.

With a circulation of 10,000 books and 20,000 CDs, the book will be distributed for free to RFID industry in China, as well as retail, manufacturing, military, logistics and other place where RFID has great potential to reform the way people do business.

This is all more important than it sounds for we are in a state of flux. First an RFID tag is an object that can be applied to or incorporated into a product, animal, or person for the purpose of identification using radiowaves. Some tags can be read from several meters away and beyond the line of sight of the reader.

You can see how this might be most useful in, say, stock taking in a department store or checking out the contents of a container. And you might also see how it could be misapplied by naughty persons seeking knowledge they should not have.

An RFID tags contain at least two parts — one is an integrated circuit for storing and nprocessing information, modulating and demodulating a (RF) signal, and other specialized functions while the second is an antenna for receiving and transmitting the signal.

All of which can be very small, minute. A technology called chipless RFID allows tags to be printed directly onto assets at a lower cost than traditional tags.

What is the problem? Mainly it is used by supply chain management, improving the efficiency of inventory tracking and management. And it is getting so huge, so massive it will in the fairly near term not be sustainable without linking the indoor tracking to the overall end-to-end supply chain visibility.

Analysts like Andrew Seybold — who is not stupid — believe that a single platform linking RFID to outdoor GPS tracking and cellular systems is required for a complete solution.

We then get to who is going to pay for this and immediately problems loom. It will all be solved but the potential RFID problem directly affects almost all Chinese manufacturers.
Source: PR-USA.net and research.

Port operator China Merchants Holdings (International) saw 2007 net profit surge 40% on increased capacity and strong container volumes.

The Hong Kong-listed company’s net profit rose to US$455 million from $325.6 million in 2006. Revenue was up 58% to $802.56 million from $507.69 million.

China Merchants has container port investments in Shenzhen, Shanghai, Hong Kong, Tianjin, Qingdao, Ningbo and Zhangzhou.

China Merchants 2007 throughput rose 17% to 47.12 million TEUs with mainland China ports handling 40.11 million TEUs, up 20% from 2006.

Earlier, Chairman Fu Yuning, seen here, said the company is planning to invest in more container terminals both in China and overseas.
Source: CargoNews Asia

Ping An Insurance, China’s second biggest insurer, will pay $2.3 billion for a 14% stake in the Beijing-Shanghai High-Speed Railway.

Ping An has raised billions of dollars recently to pay for such acquisitions.

In remarks posted on the central government’s Web site, Cai Qinghua, who is also vice minister of the Railway Ministry, said the National Council for the Social Security Fund would also buy a stake in the railway, investing RMB10 billion ($1.4 billion) for an 8.7% interest.

Construction of the railway has already begun in Beijing. This is one of these solid investments which China throws up where the scale of investment is so large that only the very, very big players and the government can afford to ante up.

We are looking at $2.7 billion for 24.7%. Using back-of-envelope economics that has to be about $10.4 billion all up and so a return of something closer to a billion dollars a year, rather than half a billion is expected.

That is very serious investment but you can see that a high speed run between Bejing and Shanghai is a natural.

Instead of the misery and expense and time of hacking it to the airport you get on the train ten minutes before it is due to leave, work on your laptop and before you know it you are at the center of your destination city. Which means it is as near as guaranteed investment as exists.
Source: Businessweek

TSK Line has launched a new joint India-China service with Germany’s Hapag-Lloyd (seen here), Thailand-based Regional Container Lines (RCL) and South Korea’s Hyundai Merchant Marine (HMM).

Five ships of around 2,700 TEUs each will be traveling the route New joint India-China service by the end of month — two from TSK and one each from the other partners.

The port rotation is Xingang, Qingdao, Ningbo, Shekou, Singapore, Port Kelang, Mumbai-Nhava Sheva and Pipavav.

At the same time RCL, Taiwan’s Wan Hai Lines and feeder line Sea Consortium are to upgrade their South Korea-China-Straits-India service by replacing five ships of 1,790 TEUs with 2,500 TEU vessels but, at the same time, dropping South Korea from the route.
Source: CargoNews Asia

This is an unabashed plug. Nothing wrong with that. The third Transport Logistic China (the organizers want it all in trendy lower case which looks damn silly) , taking place in Shanghai from 17 to 19 June 2008, will be 50% bigger than the last event in 2006. (Mark you, by not saying how big the one in 2006 was this can mean anything.

In fact, the International Exhibition for Logistics, Telematics and Transportation will be taking up 15,000 square meters of space at the Shanghai New International Exhibition Center which is quite a lot of space. I make it about sixty tennis courts in size but maths was never my strong point.

Since its premiere in 2004 transport logistic China has been constantly expanding. In 2006 it occupied one exhibition hall (10,000 square meters), now it takes up one and a half halls at the SNIEC.

This growth is going hand in hand with a broadening of the international scope of the trade fair — so far 350 exhibitors from 41 countries have registered to take part. By comparison, at the previous event in 2006 there was a total of 302 exhibitors from 33 countries.

This means not only more participating countries and more space in 2008, but also a 16% increase in exhibitor numbers.

Following the successful premiere of the German Pavilion in 2006, there will once again be a joint German participation in 2008, this time covering over 500 square meters. Plus the Czech Republic, the Italian regions of Friaul and Veneto, The Netherlands and Belgium, Spain and Russia . And, also for the first time, the Container Owners Association (COA) and the International Tank Container Organization (ITCO) are teaming up to organise a joint stand of exhibitors – this is where container owners, depot managers, maintenance and security firms and international service suppliers will be presenting their innovations for safer and more cost-effective container operations.

Air Cargo China will be there at what will be the largest international showcase for the air cargo business in Asia. 50 of the world´s leading airlines and airports will take up 3,000 square metres of space. Having attended many of these showes make sure you wear comfortable shoes and a rucksack to carry all the printed brochures that will be thrust in your hand.
Source: Open PR

The figures are simple and encouraging:

2007 revenues increased 51.8% to $85.9 million.
2007 net income increased 41.7% to $13.5 million.

Beijing Logistic, one of China’s largest third-party logistics providers, specializing in books and magazines, agricultural products and Chinese traditional medicine storage and shipping (a neat mix), announced operating results for year-end 2007 which showed it is doing very nicely.

The major contribution of this growth was the expansion of the books logistics business.

In 2007, revenues from books and magazines logistics management increased 66.8% from 2006, to approximately $51.9 million. No analyst would have forecast this. No book publisher would have expected it.

Ms. Zhang Yu, Chief Executive Officer of Beijing Logistic, said, ‘The growth was due to our continued focus on expanding warehouse service offerings as a third party logistics trustee company to the publishing Industry. We built new distribution centers in large cities to organize and manage inventory for many publishers, and as a result, we earned profit not just from book and magazine shipping, but also from the management service in the warehouse. We diversified services, and improved efficiency in order to satisfy the requirement of different clients, and the client base in the publishing business segment has increased.’

Ms. Zhang Yu said, ‘2007 was a notable year for Beijing Logistic, we were striving to become the largest book logistics company in China, the highest ranked third-party logistics company, and the most renowned logistics company.’

We do not know if the book illustrated is in the Beijing Logistic warehouse. It damn well should be.
Source: BusinessWire

Shanghai Automotive Industry Corporation (Group) (SAIC) and Anji-TNT Automotive Logistics have worked together — never a bad idea — to use Anji-TNT’s services to aid and abet SAIC’s core businesses including the supply of parts, the assembly of complete motor vehicles and the distribution of complete motor vehicles.

In the same way Baosteel has signed three long-term contracts of transportation with China Ocean Shipping Companies Group (COSCO) and COSCO Group became the largest cooperation partner of Baosteel’s 300,000-ton vessels in the world.

He Dengcai, Deputy Secretary General and Director of the Research Chamber of China Federation of Logistics & Purchasing said, ‘Such events are of symbolic significance and mean that a trend of manufacturing and logistics developing together has begun.

‘Analyzed in terms of industries, the trend of separating out-sourcing logistic operations from manufacturing has stretched out from enterprises of household electric appliances, electronics, and fast moving consumer goods several years ago to enterprises in the upper stream in such industries as iron and steel, building materials, and motor vehicles.’

He Dengcai said, ‘Under pressures due to the enlarging demands for logistics and the increasing costs, more and more manufacturing enterprises begin to attach importance to the integration of logistic functionality, conduct flow restructuring, and separate and outsource logistic businesses strategically so as to get more absorbed in the cultivation of the core competitiveness.’ (I think that means outsourcing.)

He said: ‘As modern logistic modes have accelerated their expansion towards purchasing, supply chain management has been developing fairly rapidly in China recently.’

Pushing that part of the business on to an expert partner makes some considerable sense.
More, much more, by clicking HERE.
Source: China Economic Net