UPS says the growing manufacturing center north of Shenzhen, China, and increased intra-Asian shipping activity have led the logistics giant to spend $180 million to relocate its intra-Asian logistics hub to Shenzhen.

The company’s current intra-Asian hub is in the Philippines at the former Clark Air Force Base.

UPS says Southeast Asian markets in China, Hong Kong, Japan, Korea and Taiwan account for more than half of UPS’s total intra-Asia volume. The plan is to open the new 1 million square foot hub in 2010.

Dan Brutto, president, UPS International, in a statement put the totally logical view, ‘Given the growth in shipping along the southern rim of China, it now makes more sense to sort and dispatch this volume from a hub closer to our customers. And, in making the switch, because of the growth we’re seeing, we intend to build a new sorting hub in Shenzhen with five times the capacity of the existing hub.’

The UPS Shenzen hub will launch 100 flights per week and its 400 staff will be capable of sorting 18,000 packages an hour.

Which is logical and given the growth and growth of the China market probably the only way to go. There is, of course, another side to this equation.

In the Phillipines at Clark Field the number of daily flights will drop from nine a day to two and, very probably, eventually dry up altogether leaving quite a lot of people out of work.

A UPS official said, ‘We will maintain our presence in Clark on a reduced basis. Clark will continue its function as gateway to the Philippines’ import and export.’ Which is a bit of a joke considering the amount of imports and exports coming out of that country.

This is not to over-state the case that for every winnner there normally is going to be a loser. But rather to remember that only thirty years ago the Philippines was considered one of the most vibrant economies in Asia and the one with the greatest potential.
Source: Purchasing.com and ABS.CBN

Dr George Q Huang (the picture on the right is the best we could find for which we apologize. Academics do not do pictures well) is a professor with the Department of Industrial and Manufacturing Systems and China E-Port is a national information network infrastructure. It is the outcome of a joint effort between multiple ministries. Companies can now use this network to manage their cross-border logistics and other trading activities.

Cross-border logistics customs control is mainly concerned with onsite inspection and verification of goods in containers against customs declarations.

At the University of Hong Kong, a group of researchers has been working on applying similar ideas to facilitate the cross-border logistics for the tens of thousands of containers carrying import and export goods for companies located in the Pearl River Delta region.

Often manufacturing enterprises located in the delta import raw materials, parts, components, packaging and other materials and equipment. Such enterprises, which take advantage of skilled and economical labor, enjoy significant tax exemptions on the condition that all their output is exported.

They are the main driver of industrial activities in the delta.

Customs authorities supervise and monitor the business activities of these PTEs stringently to collect import and export taxes fairly and meet overseas trading regulations.

HKU researchers are working on the design and development of a gateway system so that companies can collect and prepare customs documents using their internal information systems in a systematic fashion.

The system also allows the companies to interact and integrate with China E-Port more professionally. It allows PTEs to minimize the direct and indirect costs caused by discrepancies and delays in customs declarations and clearances, increase their flexibility to fulfil different processing trade contracts, and improve their responses to market changes.

Logistics customs control is a complicated process involving social, political, economical, individual and organizational behavioral factors.

But it appears that using electronic tagging and gateway systems these problems are being brought under control electronically.

Reading Dr George Q. Huang you come to the conclusion that although the problem is massive it is surmountable and that the answer will be, to an important extent, electronic tagging integrated with gateway computer systems.
Source: The Standard

YRC Worldwide subsidiaries Roadway and YRC Logistics Global have rolled out an expedited ocean service from China to the United States.

YRC said this adds new supply chain services at origin and destination for global shippers, as well as expand its logistics offerings to more global markets.

A spokesperson said, ‘Global supply chains are more dynamic than ever. This offering provides a unique service for those customers who seek a faster service at a more reasonable price. Our customers are sourcing globally, and we are providing solutions to that end.’

The new expedited ocean service from China to the U.S. will provide transit time improvement for standard LCL (less-than-container-load) ocean service; significant cost reduction over air; many Chinese origins with multiple sailings per week that will provide faster speed to market; guaranteed delivery or your money back if it fails to deliver by scheduled delivery date; and faster inventory turns.

The service will originate from seven ports in China — Dalian, Qingdao, Shanghai, Ningbo, Xiamen, Guangzhou, and Shenzhen — and the Port of Long Beach in the United States.

This service is expected to be at least six days faster than standard ocean transit and will offer priority unloading of containers at the Port of Long Beach.
Source: Logistics Management

Li Ka-shing is arguably the richest Asian in the world. And he is immensely shrewd. As chairman of Hutchison Whampoa Li Ka-shing said, while announcing the company’s results, that Hong Kong doesn’t need a 10th container terminal.

The government of the SAR believes container throughput will continue to increase and is eyeing southwestern Tsing Yi in Hong Kong as a possible site to build Container Terminal 10. A Transport and Housing Bureau spokesman said a new berth would be needed by as early as 2015.

Li Ka-shing said the idea that expanding the port and building a cross-border bridge would boost the city’s cargo business was ‘wishful thinking’.

He said Shenzhen would overtake Hong Kong within four years as the world’s third-busiest cargo port.

By cargo tonnage, or the total weight of goods loaded at a port, Shanghai currently ranks first, with 560 million tonnes in 2007, followed by Singapore with 483.4 million tonnes.

Measured by TEUs, Singapore is the world’s largest, with about 28 million, and Shanghai second, with more than 26 million.

Hong Kong handled 245.4 million tonnes of cargo and 24 million TEUs last year.

Li noted that at Zhuhai’s container terminals in Gaolan, the fees for handling cargo are cheaper than in Hong Kong. He said, ‘Even if the cargo leaves via Hong Kong, it would still be cheaper than if the cargo was handled here. We cannot compete.’

Zhuhai container terminals are in the city of Zhuhai on the western bank of the Pearl River Delta in Guangdong Province, adjacent to Macau and 36 nautical miles from Hong Kong.

Hutchison Whampoa generated 15% of its revenue last year from port-related business, which earned it US$4.85 billion, up from $4.23 billion in 2006.
Source: CargoNews Asia

Barely four months after acquiring one Chinese logistics company the Indian companuu Direct Logistics India, which is based in Mumbai, is looking to make another purchase. Late last year it bought China-based Shenzhen Dida Logistics for an undisclosed amount. This was the first ever acquisition by an Indian company in the Chinese freight forwarding industry.

Direct Logistics’ financial adviser, Ambit Corporate Finance, is now in talks with a few international and domestic private equity firms arranging funds for the company’s new acquisition.

Sunil Devrani, chief executive and managing director of Direct Logistics, said, ‘We are looking at buying out a supply chain management company in China which will help us in transforming to a complete logistics solution company instead of just freight forwarding firm.’

He intelligently declined to disclose the target company and the prospective investors in Direct Logistics. Sunil Devrani said the fund-raising and acquisition would be concluded in the next three months.
Source: LiveMint.com

Two new railway lines have been started in Fujian Province on the southeastern coast. When completed the will cut travel times between the coastal and inland areas.

One of the railways starts in Xiamen, a port city facing Taiwan, and runs 502.4 kilometers southwest along the coast to Shenzhen, boom city of southern Guangdong Province.

Upon its completion in 2011, the railway will allow trains to travel at up to 200 kilometers per hour, and a journey between the two cities will take less than three hours compared with the current 11.

The RMB41.7 billion (US$5.6 billion) construction cost will be shared by the Ministry of Railways, and the Fujian and Guangdong provincial governments.

The second major rail project is a 603.6-km railway linking Nanchang, capital of the central Jiangxi Province, with Fujian Province, with terminals in both Fuzhou and Putian.

The RMB51.8 billion railway will open to traffic in 2012, ‘the first modern railway’ to link Fujian Province with the hinterland, said Yu Kaiyang, director of the provincial railway construction office.

He said the new line will cut traveling distance between Fujian and Jiangxi by at least 17 km. The illustration brings to mind Edward Thomas and his splendid poem on Adlestrop:

Yes, I remember Adlestrop
The name because one afternoon
Of heat the express-train drew up there
Unwontendly. It was late June.

With the new lines there will be express trains. They will not be pulling up un-wontedly.
Source: Window of China

In Tianjin Wal-Mart has expanded its distribution center to handle the growing demand of the world’s leading retailer’s business in the Chinese market.

The expanded center in Tianjin’s Beichen district can handle 330,000 packages of goods. Gao Jian, a logistics and distribution officer at Wal-Mart, said that is four times the capacity of the original one.

The center is the second for Wal-Mart on the Chinese mainland. The other is in the southern coastal city of Shenzhen. The center in Tianjin is not brand new. The original was built in 2003 and was then expanded to its new size.

Wal-Mart has opened 91 stores on the Chinese mainland since its entry into China in 1996.
Source: China View

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

Brian Lutt, president of APL Logistics said that the China trade surge has created unprecedented complexity, additional costs and potential choke points in thousands of international supply chains.

He recently warned delegates at the Transpacific Maritime Asia Conference in Shenzhen that these challenges will be magnified as China looks to spread wealth beyond the coast.

Brian Lutt said, ‘While the rest of the world failed to anticipate the speed of the production shift and build sufficient capacity, China has put money and minds to the task of staying ahead of trade demand growth.’

China’s outsourced logistics industry, already valued at around US$140 billion, is set to grow substantially as China’s supply chain moves further inland.

Brian Lutt said, ‘Players who have a range of ways to take products from China’s interior and transport them quickly to domestic or international destinations, while completing all the value-added logistics services along the way, are set to make the biggest gains.’
Source: Arabian Business

The idea of a Hong Kong-Shenzhen metropolis — megapolis? — could make it the third-strongest city economically in the world by 2020. The illustration is but a small slice of Victoria on Hong Kong island. Trying to think of Hong Kong-Shenzen as a single entity boggles the mind.

Zhu Wenhui, a consultant at the Bauhinia Foundation Research Centre’s Hong Kong-Shenzhen Metropolis Study Group, said should the proposed metropolis keep an 8% gross domestic product growth per annum, its GDP would reach $1.11 trillion by 2020. From a logistics point of view the two ports working as one would be seriously efficient.

Which would make the pecking order in GDP Tokyo, New York, Hong Kong/Shenzen with London, Paris and Los Angeles bringing up the rear.

The foundation proposed ten recommendations to achieve that status, one of which involves the building of a high-speed railway connecting the airports of the two cities forming a super air hub.

A spokeswoman from the Hong Kong Transport and Housing Bureau said, ‘We already plan to suggest building the Tuen Mun western bypass and another link of Tuen Mun and Chek Lap Kok . . . to shorten the journey between the two airports.’

Another proposal involves the issuing of electronic multiple-entry visas in the first stage and which would enable two million permanent Shenzhen residents more convenient access to Hong Kong.

On a national level, opinions of officials from the Commerce Ministry, National Development and Reform Commission and the State Council’s Hong Kong and Macau Affairs Office were solicited and the concept has gained the support from 90 and 60% of Shenzhen and Hong Kong officials, respectively.

Zhu Wenhui, said, ‘As a think-tank, we hope more discussion can be brought about on an important issue to the development of the region and the nation . . . and hopefully governments can use the report as a starting point for a policy breakthrough.’

Note carefully the research report was compiled without the blessing of the central government. But a Constitutional and Mainland Affairs Bureau spokesman said the government has all along attached importance to the cooperation between Hong Kong and Shenzhen.
Source: The Standard