Archive for the 'Joint venture' Category

On June 21, last year we reported China Southern Airlines, China’s largest carrier by fleet size, planned to form a cargo venture with Air France-KLM Group. Then on July 5, 2007 we reported an agreement to sign an agreement had been signed. Now the story is that it plans to form a cargo venture with Air France-KLM Group this year.

So, yes, it is taking a while but it is happening.

Chinese airlines are handling more cargo because of growing exports of computer equipment, mobile phones and auto parts. World air cargo traffic will likely grow at an average annual rate of 6.1% in the next 20 years, according to Boeing.

China Southern Airlines flew 57 million passengers and 863,000 tonnes of cargo last year.
Source: The Star

One definition of logistics is ‘The procurement and physical transmission of material through the supply chain, from suppliers to customers.’ There is no need to define precisely what the material should be.

In this case it is herb and specifically the dahurian angelica root (DAR), an herb that is widely used in China.

China Health Resources has signed a project investment contract with Guangzhou Qingping Market. Both parties will invest $3 million together to build Herb Network Logistics and Sales Platform with the intent of expanding the herb market of spot trade and futures trade by the means of e- commerce. The project will start in February 2008 and finished in 2009.

The technological and natural resources advantages of CHRI will be combined with the market advantage of the Qingping market.

China Health Resources is one of China’s leading industrialized agricultural corporations. It has focused on the production and further processing of dahurian angelica root (DAR), an herb that is widely used in China.
Source: Press Newswire

Australia Post is keen to expand its domestic and international logistics operations and sees China as a potential partner for further growth. Important to get straight that Australia Post is not some sleepy government sub-organisation. It is very lively and pro-active and does a lot more than deliver the post. As in deliver grocery orders every week and acting as a small load courier.

It already has a partnership with China Post called Sai Cheng Logistics which it hopes will be the conduit to its long- term aim of becoming a more significant player in Asia-Pacific logistics.

Australia Post so far has alliances in Hong Kong, Japan, Korea, the United States and Britain.

Australia Post has US$91.6 million available for investment and it will concentrate on improving warehousing and electrical systems in support of logistics operations.

With great and understandable logice Australia Post’s managing director Graeme John said: ‘Our growth in parcels and logistics is partly driven by online trading.’ And this will become vastly more important in the coming year.
Source: CargoNews

Australia Post is keen to expand its domestic and international logistics operations and sees China as a potential partner for further growth.

Australia Post has a partnership with China Post called Sai Cheng Logistics which it hopes will be the conduit to its long- term aim of becoming a more significant player in Asia-Pacific logistics.

Australia Post already has alliances in Hong Kong, Japan, Korea, the United States and Britain.

Australia Post has US$91.6 million available for investment it will concentrate on improving warehousing and electrical systems in support of logistics operations.

Australia Post’s managing director Graeme John said: ‘Our growth in parcels and logistics is partly driven by online trading.’

Anyone who has experience with Australia Post will testify to the fact that it is entrepreneurial, efficient and always looking for ways to expand. So it is likely that it will expand into China.
Source: CargoNews

Mainland port operator China Merchants Holdings plans to develop a multi-purpose port at Ma Wan port zone in western Shenzhen. The company said the first of five berths will be built at a cost of $92.9 million.

The port operator also runs terminals in Shekou and Chiwan. In the first half of the year, its ports in western Shenzhen handled 4.98 million TEU where a TEU is a standard sized container.

Talking of the future the president of the company Fu Yuning did not rule out the possibility of acquiring overseas ports jointly with Shanghai International Port, in which it has a 26.5% stake.

In April, China Merchants Group, parent of the Hong Kong-listed unit, joined with Vietnam National Shipping Lines to build and operate Ben Ding Sao Mai Seaport and ancillary projects. The project was the firm’s first investment outside China.
Source: CargoNews Asia

It is logical. Rail could play a major role transporting an expected future (three to five years) upsurge in Chinese car exports to Europe.

In anticipation of this, Netherlands-based Koopman Logistics Group has established a joint venture with a prominent international rail freight service organization. The group’s subsidiary, Koopman Car Terminal, covers 350,000 sq m and has storage capacity for up to 13,000 vehicles at the port of Amsterdam.

Ernst Cooiman, managing director of the Koopman car terminal, said about imports so far:

‘In all cases, the importer did not have a Europe-wide approval and started to import vehicles on an individual basis. That made a smooth and successful introduction impossible.’

Ernst Cooiman said an option to get the cars from China to Europe was rail transport. ‘From China rail solutions are a good possibility, especially from inland plants to Russia and CIS countries. At the moment, there is still railway capacity available, although there is a growing shortage of platform wagons and railcars to carry vehicles.’ (Rest assured that in our illustration the car model, at least, is Chinese.)
Source: CargoNews Asia

China has used its low-cost advantage to become a world leader in manufacturing. What happens if it sets its sights on distribution, too?

Larry Ravinett, senior vice president of logistics and supply chain solutions for National Retail Systems, a third-party logistics provider, said, ‘Among the things we do is freight consolidation, and 90% of the product we consolidate is coming from China. So we asked: What’s the purpose of bringing all of this stuff to the U.S., touching it three or four times to send it to a distribution center and put tickets on it, only to ship it back to stores?’

NRS has launched SinoNRS, a joint venture with China’s Sinotrans Group, the country’s largest integrated logistics provider with some 60 million square feet of warehousing space.

SinoNRS plans to offer retailers a solution to reduce distribution expense in the States.

Larry Ravinett says SinoNRS is working to develop Western-style DC’s with a degree of information technology and materials handling automation that is not presently being used in China. He said, ‘The new buildings we’re building are based on U.S. designs. We will have information technology, automated cross-docking and conveyor-driven distribution centers that are comparable to what we have in the United States.’

These distribution centers are not yet up and running but some retail clients have already committed to the program.

Larry Ravinett said, ‘When we’re done, we’ll have the capability to bypass a DC and deliver price-ticketed items directly to stores. Or, I’ll be able to take product that has 80% of the work done and send it to a regional DC where it can be stored for replenishment later.’

Some experts believe there are still timing and communication hurdles to overcome before China is a serious threat to the U.S. distribution industry. Experts said the same about China when talking about manufacturing.
Source: Modern Materials Handling

A new route between north China’s port city of Tianjin and the US east coast has been launched by the grandly named Grand Alliance, one of the world’s shipping giants.

The Grand Alliance — Hapag-Lloyd Container Line (HLCL), Nippon Yusen Kaisha (NYK), Orient Overseas Container Line (OOCL) and Malaysia International Shipping (MISC) — will operate eight container vessels on the new line.

The new service will cover the ports of Dalian, Qingdao, Ningbo and Shanghai in China, Pusan in the Republic of Korea and New York.

The Grand Alliance has previously launched two other ocean routes between Tianjin and the US west coast, and between Tianjin and Europe. Yu Rumin, president of the Tianjin Port Group said this new venture is the first shipping route connecting the US east coast with the port of Tianjin.

China plans to make Tianjin Port in north China an international shipping center.

The world’s top 20 shipping lines have all opened services at Tianjin Port, which has now more than 100 container shipping lines and trade links with more than 400 ports in some 180 countries and regions.

Tianjin Port handled nearly 3.36 million TEUs of containers in the first six months, up 21% year-on-year.
Source: China.org.cn

Five overseas firms have said they will invest in 18 railway container-distribution centers in China. This is a major step forward in the financial reform of the country’s railway sector.

The Ministry of Railways said China United International Rail Container has been formed to build and operate the 18 centers. The centers will be located in regional economic centers throughout the country.

China Railway Container Transport, an affiliate of the Ministry of Railways, will be the biggest shareholder in the new firm, with a 34% stake. China International Marine Containers will hold 10%.

The Hong Kong-listed NWS Service Management Ltd will hold 22% while Hong Kong Promisky Investment Ltd will hold 10%.

The Israel-based Zim Integrated Shipping Services, France-based CMA CGM Group and Germany-based Deutsche Bahn AG will each take 8% stakes.

Ministry spokesman Wang Yongping described the establishment of the joint venture as ‘a milestone in the history of China’s railway development. It also fully reflects our resolve to accelerate the financial reform of the railway sector.’

The new company will design, build and operate a network of 18 rail terminals in transport hubs such as Shanghai, Kunming in the southwest, and Urumqi in the northwest. They will start operation in 2010. An initial assessment of the plan to build the 18 centers forecast investments worth at least RMB12 billion ($1.60 billion).

The ministry said it hoped having overseas investors would help introduce new management concepts and sharpen railways’ competitiveness in the container transport market.
Source: China.org.cn

First to explain that the splendidly named Old Dominion is a logistics provider in the United States. Now it has gone into partnership with Cargo Services Far East, China’s largest privately owned integrated logistics provider. Together they will provide a new service operating by way of scheduled sailings from all major Chinese ports to all major U.S. ports.

Cargo Services currently operates 28 offices throughout the country with an additional 13 to be opened by the end of the year. Its headquarters are in Hong Kong.

Old Dominion in the United States will be providing integrated service into its system that includes less than truckload, truckload, container drayage and expedited offerings. Customer support will be through the Old Dominion Global Command Center.

Old Dominion’s vice president of Global Operations, Greg Plemmons, said, ‘In many cases customers with international business moving between China and the U.S. will be able to bypass the destination warehouse and expedite sold goods to their customer and to point of sale locations.

‘Our plan is to roll the service out across our network beginning in May of this year, starting with selective markets on the West Coast and working East.’
Source: Logistics Today