Agility logistics expands

Agility Global Logistics is buying Baisui which is a Shanghai-based domestic logistics company that focuses on providing intra-city, regional and long-haul transport and warehousing, mainly to the chemicals, automotive, and FMCG sectors.

The company has more than 15 locations throughout China, including Shanghai, Shenzhen, Tianjin, Wuhan, Nanjing and Chongqing, and manages eight logistics centres with more than 130,000 sq m of warehouse floor space.

In addition the company has a fleet of its own trucks and works with over 75 trucking companies on a regular basis for its regional distribution needs.
Source: CargoNews Asia

Totally unfair. Quite amusing.

There is a perception that labor in China is cheapest, but leading strategist George Zhibin Gu (in his new book: China and the new world order) is on the opinion that labor in India is by and large 50% cheaper than China — but that still China rules. And he answers the question as to why that should be.

In his book he says that although India may be the world leader in outsourcing IT and software services field  in manufacturing China is by far the clear winner.

Firstly, when India does not have a logistics chain complete with infrastructure in place. China, on the other hand, over last 26 years, has built up a complete logistical business chain.

He uses an example the logistics of consumer electronics being made in Guangdong where you have available more than 10,000 component makers. Sony alone has more than 3,000 China based component makers.

The suppliers may be multi-nationals but they are all in one province with short and effective — compared to India —  logistical chains in place. The book suggests that this kind of effectiveness and efficiency which you find in China does not, as yet, exist even in a basic form,  in India.

George Zhibin Gu has, for the past two decades, been an investment banker and business consultant. His work focuses on helping international businesses to invest in China and helping Chinese companies to expand overseas.
Source: Cleveland Indy Media Center

Containers — vital logistics

China Logistics Industry Report 2007 to 2008 — a new market research report on logistics in China — has just been published. China´s total value of logistics in 2007 reached RMB75.2282 trillion, up 26.2% year on year.

According to a conservative estimate by the China Federation of Logistics and Purchasing, China´s logistics industry will have a compound annual growth rate of 16% in the coming three years.

In 2007, the added value of China logistics industry was RMB1.7 trillion, up 20.3% year on year, accounting for 17.6% of the total of China service industry and 6.9% of China´s GDP.

In 2007, China´s total cargo transport volume was 22.53 billion tons and its turnover volume of freight transport was 10.1 trillion tons/kilometers, up 10.7% and 11.8% year on year respectively.
Source: PR Inside

UFreight is forty years old

The U-Freight conference  being held in Hong Kong on September 18th and 20th will also mark U-Freight’s 40th anniversary.

Since 1968, U-Freight has developed into one of the world’s leading independent providers of international freight forwarding and logistics services. Through its network of subsidiary companies and exclusive agents, the company offers the full range of air and seafreight services and is in an especially strong position to serve the needs of shippers moving goods to, from and between China, Japan and the ASEAN countries.

Simon Wong, the CEO, said, ‘As we have outlined before, one of our strengths, as a medium-sized, although growing freight forwarding network, is that we can adapt quickly to local conditions.

‘The lack of bureaucracy and commitment to communications have been important factors that have contributed to our success to date.’

Delegates from U-Freight’s worldwide office and agency network, including the United States, Europe, the Middle East, Latin America, Australia and New Zealand, as well as all over Asia, are in Hong Kong to review progress and plan strategy for the year ahead.
Source: UFreight

Aircraft refuelling

Fuel prices have just started to correct themselves and are dropping. But not to the original level of, say, a year ago. Oil, which traded around $25 a barrel just five years ago, topped $147 in July. Even after backing off to around $99, it’s double the price of early 2007.

As a result, global businesses are rethinking their options for the sourcing, production and delivery of raw materials and finished goods simply because of the logistics. In a sense this fits in with China’s policy to move up the ladder and produce much higher specified goods where logistics do not form such a large part of the cost.

In research conducted for Accenture by Logistics Management Magazine, 29% of logistics executives said transport costs led their firms to either bring some offshore sourcing or production back on shore, or to cut back on off-shoring plans.

It is not yet clear how much manufacturing will migrate back from China. Noha Tohamy, a supply chain research director with AMR Research said that companies that built a presence there over the last two decades are not about to pull up their stakes because of high fuel costs.
Source: Investors.com

The first phase of China's biggest logistics center will go into operation next month in Chengdu.

Transfer Logistics is building the RMB1.5 billion ($220 million) center to provide integrated services for road transport companies.

The completed logistics center will be 740 mu (50 hectares) and will be able to handle annual cargo of 24 million tons. Transfer Logistics plans to build a network of 10 logistics bases by 2010.

It launched its first logistics center in Xiaoshan, Hangzhou, in 2002. The center services more than 400 road transport companies. Sales revenue from the Xiaoshan base grew from RMB31 million in 2003 to RMB3 billion yuan in 2007.

The company has also invested in another two logistics bases in the Yangtze River Delta. It spent RMB1.2 billion on a Suzhou center and RMB200 million on its Ningbo facility. Both centers are still under construction.
Source: China Daily

Port Cargo

A report on the state on China’s port cargo industry has just been published.

Based on the statistics from the Ministry of Transport, the National Bureau of Statistics and the China Federation of Logistics & Purchasing, and the financial statements of some key companies, this report makes:

A thorough study of the current situation of China port industry.
A forecast on the development trend of the industry.
An in-depth analysis on the investment opportunities and risks.

China’s port cargo throughput has continued to grow rapidly in recent years.

In 2007, China’s port cargo throughput rose to 6.41 billion tons from 2.21 billion tons in 2000 and the CAGR (compound annual growth rate) was 16.4% in the period 2000 to 2007.

China’s port cargo throughput in 2007 increased 15.1% against the year of 2006.

The report states China’s economic growth will continue to slow down, due to inflationary pressure and a slowdown of real estate investment.

China’s port industry is closely associated with its national economy and import and export, so the industry will see its growth of cargo throughput decelerate. However, it will maintain the momentum of a relatively fast growth.
Source: PR Inside

McKinsey Quarterly

McKinsey Quarterly surveys are detailed, informed and well-written. The current one on logistics and supply chain risk is typical. It surveys 256 companies and comes back with interesting and, perhaps, disturbing information.

It states: ‘worldwide business complexity is rising sharply. However, supply chain management isn’t keeping pace: most respondents say that their companies aren’t meeting strategic goals for it, and relatively few have acted on the global trends with the most influence over supply chains.

‘The increasing complexity of products and services tops the list of global factors that executives say most influence their supply chain strategies.

Reducing costs is even more important for companies in developing markets; perhaps companies in China (and other countries in Asia) are trying to anticipate the effect of rising costs (including labor costs and appreciating currencies) on the competitive advantages they currently enjoy as low-cost manufacturers.

When executives are asked to reflect on the greatest management challenge their companies face as supply chains become more global, they highlight the total resources required, followed by the recruitment and retention of sufficient local talent and the integration of the IT systems of companies and their vendors.

Well worth reading because of the picture of universal and international complanency that it paints. For this full report click HERE. You may have to register but it is worth it.
Source: The McKinsey Quarterly

Shanghai Jiayu Logistics

The largest trucking company in the United States, YRC Worldwide is buying Shanghai Jiayu Logistics, one of China’s largest trucking companies.

YRC paid $44.7 million for a 65% stake in the Chinese hauler, and expects to buy the rest of the company by 2010 for up to $39 million.

Technically YRC is a less-than-truckload transportation services provider and it is its subsidiary YRC Logistics—formerly known as Meridien IQ —  which has made the purchase.

Shanghai Jiayu Logistics has more than 30,000 customers, 1,800 employees, 300 tractors, 200 locations and a 3,000+ vehicle network.

YRC Logistics expects to purchase the remaining 35% interest in 2010 for an amount not to exceed $39 million, as determined by the level of Jiayu’s 2008-09 financial performance.
Much more on this HERE.
Sources: Logistics Management

Hamburg Süd has received approval from China’s Ministry of Communications to expand it’s network of proprietary offices.

Established in December 2005 in Shanghai, Hamburg Süd (China) now has a network of offices in the country.

The company’s new branches are in the key transport hubs of Guangzhou, Ningbo, Qingdao, Shenzhen, Tianjin and Xiamen.

This rapid development also reflects advances made in Hamburg Süd’s liner services, which now offer multiple sailings every weekbetween China and South America, South Africa, Australasia, and, most recently, the Indian Subcontinent.

Now the company has launched two new weekly fixed-day services linking China to India, Pakistan, and Sri Lanka.
Source: Eye for Transport