Work on a major railway connecting Lanzhou, capital of northwest China’s Gansu Province, with the southwestern city of Chongqing, has begun.

The 820-km, double-line electrified railway, co-invested by the Railway Ministry, Gansu and Sichuan provinces and Chongqing Municipality, is expected to open to traffic in 2014.

The railway will cut the distance on the route from 1,466 km to 820 km and the travel time from 22 hours to less than 7.

Trains are expected to run at 160 km per hour, with a daily capacity of 50 trains.

RMB2 billion ($293 million) will be spent in environmental protection, about 2% of the total cost.

The May 12 earthquake had a minor effect on the railway. Huang Yanbin, chief designer siad the railway designers used a detour around geologically dangerous areas.
Source: China View

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

Vietnam Seaport

Normally this would not be covered here because it is about Vietnam. But it has a direct bearing on the logistics of China.

Vietnam faces an extra cost of more than US$1.7 billion as the lack of port logistics leads local companies to have their shipments transshipped via ports in Hong Kong and Singapore.

The country now has 114 seaports, most of them small, but only 14 are considered internationally acceptable.

Nguyen Tuan Hoa, deputy director of the Development Study Center under the HCMC government said logistics expenses in the United States made up 9.5% of GDP, 11% in Japan, 16% in South Korea, 21.6% in China and 25% of GDP in Vietnam.

He said logistics played a major role in the economic development of a country which depends heavily on exports.

Which is fascinating.

First it tells us that Vietnam has a serious problem in attracting industry to move from China until it gets its logistics straight. And that the percentage of GDP ascribable to logistics expenses in China, if true, is still more than double that of the United States.
Source: Vietnamnet

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

RFID poster

RFID (radio frequency identification devices) are vital to logistics because it makes it very easy to track goods as they are being shipped.

Advanced ID Asia Pacific will acquire Shenzhen DDCT Technology Company, a China-based RFID manufacturer.

DDCT is involved in the development, production, and sales of RFID/UHF hardware, including UHF readers, and antenna tags in Asia.

Advanced ID and DDCT expect to finalize the deal with respect to Chinese and U.S. laws  by the end of this year.

AIDO President and CEO, Dan Finch, said, ‘It is no secret that China is the most senior player in the Far East, and possibly in the world, relative to adoption of RFID and UHF tags and readers.’
Source: TMCNet.com

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

One of the more interesting view from the Trans Asia train

A container train carrying fifty containers of Fujiusu Siemens IT products has left Xiangtang in China on a seventeen-day 10,000 km journey to Hamburg in Germany, via the Eurasian Landbridge.

The train travels through China and Mongolia, crossing the border to Russia near Irkutsk, and continues along the route taken by the Trans-Siberian Railway via Novosibirsk, Omsk and Ekaterinburg to Moscow, and then through Belarus and Poland to arrive in Hamburg on October 6th.

Heribert Göggerle, senior vice president of supply operations at Fujitsu Siemens Computers (FSC) points out that shipping IT products by rail is more flexible, around one third faster than ocean freight and  25% cheaper than airfreight.

Will this ever work for passengers? In truth, it is already possible but it would be very long and, sadly, mostly boring. It used to be quite a feature of travel before World War II when people coming to Hong Kong from England (and vice versa) avoided the voyage through the Red Sea. The terminal in Hong Kong was near the Kowloon Ferry (the tower still stands) and that is why the Peninsula Hotel was built in Kowloon.
Source: Eye for Transport

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

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