Dry bulk shipping in China has come into its own in the past ten years or so. Dry bulkers ships carry everything from grain to coal to metals. One of the biggest players in the business is China COSCO Holdings Company, generally known as Cosco.

More than half of its revenue comes from dry bulk shipping — about 52% — but the group also handles container shipping, integrated logistics services, and terminal and container leasing.

Dry bulk shipping services are predicted to grow in 2008 with increasing demand for iron ore and coal to India and China.

Last year, Cosco, considered to be the second largest integrated shipping company in the world, spent over RMB17 billion to increase the size of its fleet and expand its port interests. Yet it still managed to post almost 135% net profit growth over 2006.

Management plans to up its capital expenditure to over RMB23 billion in 2008 which is an increase of 37%.

In the first quarter of this year Cosco increased its net profits by 135% over the same period a year ago.
Source: Seeking Alpha

In China Securities Journal Wei Qiang, vice-director of UBS Securities, is reported as saying the railway sector will see an annual investment gap of RMB200 billion ($28.60 billion) in three years.

He said the railways need RMB1.25 trillion in capital over the five years between 2006 and 2010.

Capital expenditures will exceed RMB300 billion annually over the next three years, resulting in an investment gap of RMB200 billion for the period.

UBS’s research report says that compared with other industries including power, telecommunications and banks, the railway sector is still in its initial phase with more reconstruction pressure.

Wei Qiang said the Ministry of Railways will inject more capital in three listed companies — Daqin Railways, Guangshen Railways and Tielong Container Logistics —  and attract more commercial capital, including private capital.

He said, ‘It is impossible to issue bonds or loans to fill the gap. He explained that in 2006, the Ministry of Railways’ capital and interest repayments totaled RMB56 billion, far higher than the profit of RMB3.2 billion.
Source: China Daily

The southern Guangxi Zhuang Autonomous Region, a bridgehead between China and the Association of Southeast Asian Nations (ASEAN), will invest about RMB260 billion ($37.1 billion) by 2012 to improve its transport system.

Ma Biao, the region’s chairman, told a transport construction mobilization meeting that at completion Guangxi will have a comprehensive transport network linked to neighboring provinces and ASEAN.

ASEAN represents a growing trade partner for the region. In the first quarter, Guangxi’s trade with ASEAN members hit $1.08 billion, up 130% year-on-year.

Under the final plan, the region will invest RMB115 in rail transport, starting with the construction of 1,450 kilometers of railway.

This year, the region plans to start work on the Nanning-Guangzhou Railway, which will link Guangxi’s capital Nanning to Guangdong’s capital Guangzhou.

Also, the region will begin construction of 1,800 km of expressways. About RMB120 billion will be spent on highway or expressway construction.

The Nanning Wuxu, Guilin and Liuzhou airports will be expanded and a new regional airport will be built in Hechi. The investment for civil aviation facilities will be RMB3.5 billion.

And about RMB23 billion will be used to expand harbors and river ports.

In January, China approved the Guangxi Beibu Bay Economic Zone Development Plan, aiming to promote the development of the southwest and south and increase China’s cooperation with ASEAN. The zone, covering 42,500 sq km, will be developed into a regional logistics, trade and manufacturing base between China and ASEAN.
Source: China View

Global Link Logistics, a furniture freight forwarder from Asia to the United States which is also a San Francisco-based transportation and logistics merger and acquisitions firm, has expanded its service into the Shanghai region.

This is its Flex service which, as you well knew but it had slipped the end of your tongue for a moment, stands for Furniture Less than Container Express service at Shanghai.

Flex lets manufacturers and retailers consolidate furniture orders from single or multiple factories at origin so orders are consolidated into a container. It allows manufacturers and dealers to cost-effectively consolidate orders from any number of factories at origin and ship individual orders—as small as 300 cubic feet—directly to any destination in the contiguous U.S. and many Canadian points through a logistics network dedicated to furniture.

GLL started Flex service in Yantian in early 2007 and plans to launch the Shanghai service around a few anchor tenants.

John Williford, president of Global Link Logistics said, ‘As the cost of fuel and transportation continues to increase, furniture importers are looking for ways to gain a competitive advantage.’
Source: Logistics Management

For its next major push forward China has got to get its logistics right. And it is doing it through desperately needed improvements to the transport infrastructure and the use of tehnology to control the movements of goods. With some of the bigger companies the logistics within the company are already world class.

Benz-DaimlerChrysler is showing the way with its factory in Beijing by introducing just-in-time methods which, in turn, depend totally on efficient logistics within the company and among its suppliers.

In 2006, BeijingBenz-DaimlerChrysler Automotive Ltd (we will call it BBDC becaue life is to short) opened an all-new state-of-the-art factory in Beijing to build Mercedes Benz E- and C-Class sedans, as well as Chrysler’s best-selling big-grilled 300C sport/luxurymobile.

The idea was to have a totally modern factory using enterprise resource planning for just-in-sequence production. This is a step in the just-in-time process.

BBDC went to two companies for electronic solution — SAP and Seeburger. The result was the first fully integrated automotive supply chain management infrastructure in China and one of the most advanced systems of its kind in the world. (And, by the way, some snazzy vehicles which are world class.)

When you make a move like this it is complicated beyond measure. For not only must you make it work in your own factory you need to implement a form of the system throughout the supplier network, down to the smallest local suppliers.

James Hatcher, managing director at Seeburger Asia Pacific, using the acroynm EDI for electronic data interchange as if it were part of daily speech, said, ‘EDI is not widespread in Asia, but it was mandated by Daimler Chrysler to optimize BBDC’s supply chain. The project therefore had even more challenges than a typical EDI implementation.’

BBDC used Seeburgerhandle business-to-business integration. Seeburger established a strategy to EDI-enable 100% of BBDC’s suppliers which must have been a task and a half. But it was done on time and was readywhen the plant opened in mid-2006.

That is making sure that machines are made with the right parts ready at the right time and is to be applauded.

The next major step is to see that the completed goods — in this case vehicles — can be moved to their final destination at the lowest cost and highest speed. This is the main problem facing the logistics industry of China and government and industry are working together on it at the moment.
Source: Supply Demand Chain

Six B747-400ERF (which stands for Extended Range Freighter) have been delivered to Jade Cargo at its Shenzhen Baoan International Airport base.

With the delivery of the six new freighters, the Chinese company plans to intensify its existing air routes in Europe as well as expand its international market.

Jade Cargo International is a partnership venture between Shenzhen Airlines (holding 51% share) Lufthansa Cargo(25%) share, and the totally unpronouncable Deutsche Investitions-und Entwicklungsgesellschaft which has 24% of the venture and we will have to think of a better acronym than DIE.

This is the first cargo airline joint venture in China between a local company and foreign firms.
Source: China Civil Aviation Report

Birmingham-based software developer and global supply chain consultant Barloworld Optimus is aiming to capitalise on escalating supply chain awareness in China.

Barloworld said China’s growth as a manufacturing superpower was fuelling demand for software tools. It said the need to curb emissions ahead of the Olympics was also aiding business with new software licences up three times on last year and five times on 2006.

Barloworld, which supplies the Optimiza and CAST tools, has brought forward plans to open up a Shanghai office and has expanded Asian operations to include permanent Beijing-based consulting resources.

Global business development director Fraser Ironside said following impressive gains, the company — which supplies McDonalds. Nokia, BAT and Goodyear — was working on links with Chinese clients and targeting third party logistics companies.

The chief drivers behind the company’s ambitious China expansion include national logistics costs at 20% of GDP — compared to between eight and 10% in the US and Europe Software developer looks east — and the relaxation of regulations allowing foreign third party logistics firms to establish wholly-owned operations in China.

With more than 350 licences worldwide and more than 1,300 trained users, the tool is used widely by third party logistics, manufacturing, consulting and retail companies.

The site has some splendid photographs of people who are not using its software and wish they were. Our illustration is but one of them.
Source: Birmingham Post

Grand Power Logistics saw revenue increase by 68.4% to $99.6 million compared to the same period in 2006. Gross profit for the year increased by 72% to $6.9 million.

Costs related to the Company’s aggressive expansion, particularly in China resulted in a net loss of $139,623 but to that should be added adjustments to employee’s compensation so that direction was solidly in the right direction.

Ricky Chiu, President and CEO of Grand Power, said, ‘Successfully implementing our expansion plans did challenge our margins during the year, but we believe our efforts will be rewarded with continued strong revenue growth and increased profits as we benefit from economies of scale and our entry in higher margin segments of the logistics value chain.’

Cargo shipments showed the strongest growth in the European markets, growing by 162% to 7,973 tonnes in 2007. Strong gains were also reported in the US markets with 9,468 tonnes shipped, an increase of 43.9%.
Grand Power’s expansion into China in 2007 also resulted in significant growth as air cargo increased by 926% to 4,388 tonnes.

To help facilitate further expansion and grow market share, Grand Power has established Shanghai as the China headquarters.
Source: MarketWire

China opened the world’s longest cross-sea bridge last week running from the port city of Ningpo and Shanghai across Hangzhou Bay. The idea is to cut a considerable amount of time for everyone traveling between the two ports.

Well, not quite for everyone.

Hundreds of drivers have been fined already for driving too slow in order to enjoy the view.Understandable. The 22.4 mile structure travels right across Hangzhou Bay and is, in itself, a most remarkable spectacle.

It is designed to slash travel time between Ningbo and the financial hub Shanghai from four hours to two and a half.

Unless of course you are taking the wife and kiddies out for a bit of bracing fresh air and a view of the bridge.

Thus, since its opening on May 1, police have fined more than 300 drivers, most for driving too slowly or illegal parking on the emergency lanes while enjoying the ocean view and taking photos.

Long lines of cars carrying whole families eager to see the bridge and sea vista have caused serious traffic problems and led to a series of accidents.

The $1.7-billion bridge’s much publicized ’sightseeing platforms’ in the middle of the span will not be ready for tourists for another two years, local media have reported.
Source: Reuters

Construction on the Chengdu railway container center station is expected to start soon, said Jin Dazhong, director of logistics for the Chengdu Municipal Committee of Communication.

With an investment of RMB2 billion ($286.39 million) from China United International Rail Container, the station will have a total cargo throughput of 2.2 or 2.5 million twenty foot equivalent units (TEUs) — that which we think of as containers — upon completion.

Jin Dazhong said, ‘It will be the largest railway container center station in Asia.’

The station will open direct lines from Chengdu, Southwest China’s Sichuan Province, to Shanghai, Guangzhou, Shenzhen, Qingdao, Lianyungang and Tianjin ports, and the transportation time will be shortened from 5 or 6 days to only 48 hours.

Covering an area of 2.140 mu (142.67 ha), the station is the largest of 18 container logistics projects planned by China United International Rail Container Co Ltd.

Chengdu aims to build itself into a logistics hub in western China by 2010, and 2,700 mu more land has been planned for the container logistics zone, with a designed annual handing capability of two million TEUs.
Source: China Daily