TNT in China

Global express company TNT (it started as an Australian company with the initials standing for Thomas Nationwide Transport) will add eight new branches to its international express network in China by the end of the year.

The eight new branches will mostly be located in the Pearl River Delta area and the Yangtze River Delta area, China’s key manufacturing and export hubs.

In addition, another four TNT International Express branches will be set up in Nanning, Wenzhou, Kunshan and Shanghai Pudong by the end of the year.

This will bring the total number of TNT International Express branches in China to 34.
Source: CargoNews Asia

Evergreen International

The U.S. Department of Transportation has named  Evergreen International Airlines as a new all-cargo entrant in the U.S.-China aviation market.

Evergreen, if granted final authority, will operate six round-trip flights per week to Shanghai from New York with additional traffic stops in Chicago, Dallas/Fort Worth and Columbus, Ohio.

The department said Evergreen would offer the first scheduled U.S.-carrier all-cargo service to China from both New York and Columbus. It also noted Evergreen was the only applicant that would use the entire capacity of its aircraft for China services. In addition, the Department cited Evergreen’s experience operating in the U.S.-Asia market, including its U.S.-China charter services.

Note that all restrictions on scheduled U.S.-China all-cargo services will be lifted in March 2011.
Source: 7th Space Interactive

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

Tianjin Port

Chinese port operator Tianjin Port Development Holdings reported a first half net profit of US$18 million which is a 19% year-on-year increase.

Revenue rose 8.6% to $79.8 million.

Tianjin Port, which handles both container and bulk cargo, bought a 40% stake in a Tianjin container terminal in July last year.

The company became the largest shareholder of Alliance International Container Terminal, which has four berths with a designed capacity of 1.7 million TEUs.
Source: CargoNews Asia

Odd-even traffic in Beijing

The traffic controls in Beijing may have cleared the air somewhat but they have also had a major impact on logistics companies, which rely on transporting goods for much of their business.

Wu Chao, Manager Beijing Hendan-Dutek Electronics, said, ‘One van has an odd-number license plate, the other, an even-number one. The new system means one is always left unused. So we have to rent a van now. But it is not easy to rent. The renting fee doubled during the period, so it’s cost me hundreds of thousands of yuan over the last two months.’

A leader from a medium-sized electric company says prices charged by logistic companies was RMB0.5 per kilometer per ton in the past, but it has now increased to one to two yuan. The transport fee will be even higher if they need temporary cars.

Li Hongchuan, Deputy GM Chinapower, said, ‘The air quality is good after adopting the odd-even system. The roads are clear. I support the system. But it is not convenient for the company. It means two cars can only be used as one car. And it adds additional cost.’

Experts say if the system is carried out in the long term, it will challenge not only enterprises but the city’s industrial structure.
Source: CCTV.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

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

Shijiazhuang City

Good Life China has signed a cooperation agreement with the Hebei Province subsidiary of China Material Reserve Transportation Company.

China Material Reserve Transportation Company is one of the largest logistics providers in China, and its Hebei Logistics Center is the largest third-party logistics company in Hebei Province, with total assets of RMB400 million ($6 million) and an annual handling capacity of over 100 million tons.

China Reserve Logistics will service the Shijiazhuang City District and the surrounding 17 counties and cities on behalf of Good Life, with a total population of roughly 7 million people. It is anticipated that total throughput at the logistics center could reach RMB2 billion ($290 million) by the end of the year.
Source: Market Watch

This investment reprot on China Transportation and Logistics Industry, 2000-2008 analyses the investment trends and features of listed companies in China.

Since 2000, China has poured huge amount of money into the construction of transport infrastructure, and the whole industry has developed rapidly.

In the period 2000-2006, total investment of China’s listed transport and logistics companies increased much sharply and the investment surged to RMB148 billion in 2006 from RMB1.16 billion in 2000, representing a compound annual growth rate of 1.24.

However, starting from 2007, China has undergone something of a decline in total investment in the transport and logistics industry.

The statistics of the first several months in 2008 show that the newly-added investment from the listed companies is slowing down Possibly partially because of unstable international oil prices.
Source: MarketWatch