contemporary logistics in china: transformation and revitalization
TRANSCRIPT
For further volumes:http://www.springer.com/series/11028
Current Chinese Economic Report Series
Bing-lian Liu • Shao-ju Lee • Jian-hua Xiao Ling Wang • Zhi-lun Jiao Editors
Contemporary Logistics in China
Transformation and Revitalization
Editors Bing-lian Liu Logistics Research CenterNankai UniversityTianjin, P.R. China
Jian-hua Xiao Logistics Research CenterNankai UniversityTianjin, P.R. China
Zhi-lun Jiao Logistics Research CenterNankai UniversityTianjin, P.R. China
Shao-ju Lee Logistics Research CenterNankai UniversityTianjin, P.R. China
Ling Wang Logistics Research Center Nankai University Tianjin , P.R. China
ISSN 2194-7937 ISSN 2194-7945 (electronic) ISBN 978-3-642-33566-2 ISBN 978-3-642-33567-9 (eBook) DOI 10.1007/978-3-642-33567-9 Springer Heidelberg New York Dordrecht London
Library of Congress Control Number: 2012952085
© Springer-Verlag Berlin Heidelberg 2013 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, speci fi cally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on micro fi lms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied speci fi cally for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher’s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a speci fi c statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein.
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v
Preface
This report is a sequel to the fi rst volume of the series entitled “ Contemporary Logistics in China: An Introduction ,” with the intention of extending the coverage of this broad subject and providing further information to the interested readers. With the steady and rapid development of China’s economy in the past decade, its logistics industry, in re fl ecting the market demand and being shaped by various physical and ideological in fl uences, has gradually grown into a vibrant economic force. Its elevated interaction with the global trade partners as a prominent manufac-turer and a gigantic consumption market has drawn wide attention from the world’s logistics professionals. There arose an intense interest in a comprehensive exposition of China’s logistics development in English. Yet for years there had been only scattered publications or research reports on the subject, mainly in Chinese language. The annual “Report of Logistics Development in China,” (called by the academicians, researchers, enterprises and governmental agencies in China as the “Blue Book”), published by the Logistics Research Center at Nankai University over the past decade, is a case in point. Realizing the broader interest of the English-reading community, the Center published its fi rst English report entitled “ Contemporary Logistics in China: An Introduction ” in October 2011. The report was a fi rst such document founded on the extensive study by a team of seasoned researchers at the Center, and was well-received by the global readers. It was organized to consist of fi ve main sections: the development environment of China’s logistics, the supply and demand characteristic of the logistics market, the status of logistics infrastructure, emerging regional logistics, and logistics for some special segments. This coverage is adopted to afford the academic as well as practitioner readers a concise yet panorama view of the logistics development in present-day China, and an in-depth understanding of the logistics development trends of certain regions and hot issues.
This present report, as a second volume of the series, consists of seven chapters. It follows the same general conceptual organization, yet with updated analysis and discussion of logistics development, under the backdrop of the aftermath of the international fi nancial crisis, the acceleration of the transformation of development mode and the strategic adjustment of the economic structure. The fi rst three chapters of this report give an up-to-date summary of China’s economic development trend,
vi
its status of logistics market development and the condition on logistics infrastructure development. The fourth chapter presents the status, the potential and special signi fi cance in logistics development of several booming economic regions: the Chengdu-Chongqing region, the Xinjiang Uygur Autonomous Region, the Northeastern region and the Zhongyuan city cluster. The rapid development of these regions has in various ways forti fi ed the overall logistics capability of the nation.
The fi fth chapter studies the current status, existing problems and future develop-ment trend of several emerging logistics segments: the fresh agricultural products logistics, the coal logistics and the express logistics. These segments have evolved swiftly in the past few years and their logistics have impacted the daily lives of all residents. Logistics needs, and enhancement of infrastructures, systems, regulations and information platforms, are explored in this chapter. The next chapter deals with the study of several hot spot logistics issues such as multimodal transport, bonded logistics and green logistics. These topics, though diversi fi ed, focus the attention on subjects that concern the logistics development in China, both for improving ef fi ciency, consistency and for complying with the environmental responsibility. The fi nal chapter gives a summary of the aforementioned subjects and a perspective view of the future development.
This volume, together with its predecessor report, aims to provide a comprehensive, balanced report and analysis of modern-day logistics development in China. It is based on the most up-to-date information and synthesized for a systematic presen-tation for readers in universities, consulting fi rms, media, logistics enterprises, governmental agencies, and research institutions. The appended cumulative statistics tables can also serve as a credible data source and reference manual for researchers who wish to engage in further study of the logistics development in China. Happy reading!
Preface
vii
Contents
1 Development Environment of China’s Logistics..................................... 1 Ling Wang
2 Development Status of China’s Logistics Market .................................. 17 Xiao-mei Jiang
3 Development Status of China’s Logistics Infrastructure ...................... 33 Xiao-mei Jiang
4 China’s Logistics Development in Certain Key Regions ....................... 47 Ping Chen, Jun Liu, Ran Wei, and Yong Liu
5 Logistics Development in Some Key Industrial Segments .................... 105 Zhi-lun Jiao, Jian-hua Xiao, and Fan Qin
6 Hot Issues in China’s Logistics Development ......................................... 147 Wei-lin Liu, Lan-bing Li, and Xiang Li
7 Conclusions and Outlook ......................................................................... 191 Ling Wang
Index ................................................................................................................. 199
ix
Contributors
Ping Chen Department of Logistics Management , Nankai University , Tianjin , P.R. China
Xiao-mei Jiang College of Management , Tianjin Normal University , Tianjin , Xiqing District, P.R. China
Zhi-lun Jiao Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
Lan-bing Li Institute of urban and region economics, Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
Xiang Li Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
Jun Liu Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
Wei-lin Liu Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
Yong Liu Department of Logistics Management , Nankai University , Tianjin , P.R. China
Fan Qin Department of Logistics Management , Nankai University , Tianjin , P.R. China
Ling Wang Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
Ran Wei College of Economy and Management , Civil Aviation University of China , Tianjin , Dongli District, P.R. China
Jian-hua Xiao Logistics Research Center , Nankai University , Tianjin , Nankai District, P.R. China
1B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_1, © Springer-Verlag Berlin Heidelberg 2013
The economic situation of China was relatively complex in 2010. China speeded up the transformation of its mode of economic development and propelled the strategic adjustment of its economic structure, thus enabled the national economy to develop in a stable and rapid manner. Meanwhile, governments at all levels actively imple-mented the Adjustment and Revitalization Plan for Logistics Industry issued in 2009, successively launched a series of policy documents for promoting industrial transfer/ reconstruction and rural logistics system construction, thus created a favor-able macro environment for the healthy development of China’s logistics.
This chapter describes the macro environment for the development of China’s logistics in 2010 from two perspectives, viz. economic environment and policy environment, to provide a backdrop for the discussions in subsequent chapters. The fi rst section states the economic environment of China logistics from fi ve aspects, viz. national economy, international trade, domestic demand, infrastruc-ture and enterprise cost. The second section states the policy environment of China’s logistics from six aspects, viz. planning and local regulations, policies launched by various departments and ministries, construction of rural and agricul-tural products circulation system, policies on undertaking industrial transfer, poli-cies on enterprise acquisition and reconstruction, and the Economic Cooperation Framework Agreement (ECFA).
L. Wang (*) Logistics Research Center , Nankai University , No. 94 Weijin Rd. , Nankai District, Tianjin 300071 , P.R. China e-mail: [email protected]
Chapter 1 Development Environment of China’s Logistics
Ling Wang
2 L. Wang
1.1 Economic Environment for the Development of China’s Logistics
In 2010, China speeded up the transformation of its economic development mode, and carried out an industrial structure optimization and upgrade. Economic growth previously stimulated by investment and export was infused by enormous domestic consumption. This change effectively reinforced and expanded beyond the achieve-ment of coping with the international fi nancial crisis and laid a foundation for a rapid growth of total logistics amount.
1.1.1 Stable and Rapid Development of National Economy
In 2010, China’s economy extended the strong recovery trend of the latter half of 2009. Gross domestic product for the year ranked the second in the world with an amount of 39.8 trillion RMB. 1 Calculated at a comparable price level, the year on year growth rate was 10.3%, with an increase of 1.1 percentage points over last year, as shown in Fig. 1.1 .
In 2009, China’s economy exhibited a conspicuous investment-pull feature; the contribution proportion to economic growth for investment, consumption and net export was respectively 95.2, 45.4 and −40.6%. In 2010, the contribution proportion
1 If unspeci fi ed, all statistics and conclusions in this report refer to Mainland China, and do not include Hong Kong, Macao and Taiwan.
21.6
26.6
31.434.1
39.8
12.7
14.2
9.6 9.2
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0
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2006 2007 2008 2009 2010Year
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tic P
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ct (
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RM
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2
4
6
8
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12
14
16G
row
th R
ate
(%)
Fig. 1.1 Gross domestic product and growth rate for 2006–2010 ( Source : Compiled from the China Statistical Yearbook (2010) and the China Statistical Bulletin of National Economic and Social Development (2010) Note : Unless otherwise speci fi ed, all sources cited in this volume are published in Chinese with referencing information translated into English)
31 Development Environment of China’s Logistics
of investment, consumption and net export to economic growth was respectively 54.8, 37.3 and 7.9%, which correspondingly stimulated the GDP growth by 5.6, 3.9 and 0.8 percentage points. It can be seen that, in 2010, the structural driver for China’s economic growth was improved markedly, demonstrating an economic growth pattern that is jointly stimulated by investment, consumption and export. The contribution proportions of the three categories of demands to GDP growth for 2006–2010 are shown in Fig. 1.2 .
In 2010, logistics operation returned to a fast development path from the tremulous state of prior years. Total value of social logistics 2 reached 125.4 trillion RMB, with a growth of 15% year on year, and an increase of 3.7 percentage points over that of 2009. Added value of the logistics industry was 2.7 trillion RMB; the price-adjusted year-on-year growth is 13.1%, an upswing of 2.5 percentage points over last year. 3
1.1.2 Reviving Growth of International Trade
With the resurgence of world economy, especially the strong economic growth in emerging markets and developing countries, foreign trade of China in 2010 grew in
2 The total value of products using logistics services equals the total value of products initially entering the logistics fi eld and delivered to or already received by the end-users during a period of time, representing the value of the logistics demand during a certain time. 3 National Development and Reform Commission of P. R. C., National Bureau of Statistics of China, and China Federation of Logistics and Purchasing. National Logistics Report of 2010 [R], Beijing, 2-28-2011.
16.1
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75
100
125
150
Con
trib
utio
n R
ate
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2006 2007 2008 2009 2010Year
Net export Consumption Investment
Fig. 1.2 Percentages of contribution of the three demands to GDP growth for 2006–2010 ( Source : Compiled from China Statistical Yearbook (2010) and the speech of Ma Jiantang (Director of National Bureau of Statistics) at the News Conference of National Economic Operation in 2010, Beijing, January 20, 2011)
4 L. Wang
a rapid and restorative manner. In the fi rst half of 2010, the total import and export value of foreign trade rebounded swiftly and realized a speedy growth, while in the second half, the growth slowed down. Overall, the year reaped a relatively high level of growth. Monthly import and export values and growth rates of China’s for-eign trade in 2010 are shown in Figs. 1.3 and 1.4 respectively.
109.6
94.5
112.1
131.7137.3
145.4139.3
144.9
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80
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1 2 3 4 5 6 7 8 9 10 11 12Month
Impo
rt/E
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Export value Import value
Fig. 1.3 Monthly import and export values of China’s foreign trade in 2010 ( Source : Compiled from data published by the General Administration of Customs of the People’s Republic of China)
21.0
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38.034.3 34.9
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1 2 3 4 5 6 7 8 9 10 11 12Month
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Fig. 1.4 Growth rate of monthly import and export values in 2010 ( Source : Compiled from data published by the General Administration of Customs of the People’s Republic of China)
51 Development Environment of China’s Logistics
The annual total amount of import and export goods for 2010 was 2.97 trillion USD, with a growth rate of 34.7%. Wherein, the value of export was 1.58 trillion USD with an increase of 31.3%; and that of import was 1.39 trillion USD, with an increase of 38.7%. Total import and export values and growth rates for 2006–2010 are shown in Fig. 1.5 .
In 2010, the international logistics market of China realized a restorative growth. Ports above the designated scale 4 achieved a cargo throughput of 8.02 billion tons, with a year-on-year increase of 15.0%. Wherein, the foreign trade throughput was 2.46 billion tons, with an increase of 13.6%; the container throughput at port was 145 million TEUs, with an increase of 18.8%. 5 The cargo and post throughput at airports was 11.29 million tons, which increased by 19.4%. Wherein, throughput of domestic airlines was 7.22 million tons, with a year-on-year increase of 15.5% (that of airlines from the Mainland to Hong Kong, Macao and Taiwan was 691,000 tons and increased by 53.6%); throughput of international airlines was 4.07 million tons, with an increase of 27%. 6
4 Ports above the designated size are those sea ports with annual cargo throughput over one million tons and inland ports with annual cargo throughput over two million tons and ports for interna-tional trade, for container load and unload, as speci fi ed by the Chinese Ministry of Transport. 5 China Statistical Bulletin of National Economic and Social Development (2010), National Bureau of Statistics of China. http://www.stats.gov.cn/tjgb/ndtjgb/qgndtjgb/t20110228_402705692.htm,2011-02-28 6 Statistical Bulletin of Nationwide Airports (2010), Civil Aviation Administration of China. http://www.caac.gov.cn/i1/K3/201103/t20110315_38273.html,2011-03-15
1201.9
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969.1
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1004955.8
791.6
1394.8
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17.8
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−13.9−100
100
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2006 2007 2008 2009 2010
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ue (
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−15
5
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65
85
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wth
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e (%
)
Year
Export value Import value Growth rate of total importand export value
Fig. 1.5 Total import and export values and growth rates for 2006–2010 ( Source : Compiled from the China Statistical Bulletin of National Economic and Social Development (2006–2010), pub-lished by the National Bureau of Statistics of China)
6 L. Wang
1.1.3 Continual Growth of Domestic Logistics Demand
In 2010, volume for consumption goods in China grew in a continual and rapid manner; consumption hot spots still concentrated in the three categories related to the Economic Stimulus policy, viz. automobiles, household appliances and building materials. The annual gross retail amount of social consumption goods was 15.7 trillion RMB, with an increase of 18.3%. Wherein, compared with last year, the increases in retail spending are as follows: automobiles (34.8%), clothing (25.8%), Chinese herbal and western medi-cines (23.5%), household appliances and audio-visual equipment (27.7%), furniture (37.2%), building and decoration materials (32.3%). Gross retail amount and growth rate of social consumption goods for 2006–2010 are shown in Fig. 1.6 .
Increase in domestic social consumption demand extended the prosperous trend of domestic logistics demand market in 2010. The national total logistics value of indus-trial products was 113.1 trillion RMB, which accounted for 90.2% of the total value of social logistics. This represents a growth of 14.6% over that of the previous year, a rate which is 0.5 percentage points higher than that of last year. The total logistics values of agricultural products, renewable resources and institutional and residential products were increased by 4.3, 39.5 and 14.7% year on year, 7 respectively.
1.1.4 Signi fi cant Achievement in Logistics Infrastructure Construction
In 2010, the investment on social fi xed assets continued to increase, but at a slower pace of growth compared with that of the large-scale investment-driven economy in
7 China Logistics Information Centre. http://www.clic.org.cn/portal/wltj/wlfx/1295244884282286.htm
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Gro
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Fig. 1.6 Gross retail amount and growth rate of social consumption goods for 2006–2010 ( Source : Compiled from the China Statistical Bulletin of National Economic and Social Development (2006–2010), published by the National Bureau of Statistics of China)
71 Development Environment of China’s Logistics
2009. The total social fi xed assets investment of 2010 was 27.81 trillion RMB, which is an increase of 23.8%, but a drop by 6.3 percentage points compared with that of last year. Wherein, the investment in the transportation, warehousing and postal industries was 2.78 trillion RMB, which is an increase of 19.5%, but a decline by 28.8 percentage points compared with that of last year. 8 This suggests that the growth of fi xed assets investment in logistics industry has returned to its normal pace after the hike of the large-scale transportation infrastructure investment of 2009. The fi xed assets investment and growth rate of the transportation, warehous-ing and postal industries during 2006–2010 are shown in Fig. 1.7 .
Generally speaking, China’s comprehensive transportation system has been estab-lished through continual development in the past decade. By the end of 2010, the length of national railways in operation was 91,000 km; wherein, the length of high-speed lines in service was 8,360 km, ranking highest in the world. The construction of 12 national trunk highways (in fi ve vertical directions and seven horizontal direc-tions) and eight provincial passages in the Western region had been completed. There were 1,774 deepwater berths within the coastal harbors, having a total throughput capacity of 5.5 billion tons; fi ve specialized transportation systems involving coal, oil, ore, container and grain were established. The navigable mileage of national inland rivers was 124,000 km; wherein, the length of navigation channels above
8 China Statistical Bulletin of National Economic and Social Development (2010), National Bureau of Statistics of China.
1.111.28
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s In
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rans
port
atio
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ousi
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osta
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ustr
ies
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lion
RM
B)
0
5
10
15
20
25
30
35
40
45
50
Gro
wth
Rat
e (%
)
Fig. 1.7 Fixed assets investment and growth rate of transportation, warehousing and postal indus-tries of China for 2006–2010 ( Source : Compiled from the China Statistical Bulletin of National Economic and Social Development (2006–2010), published by the National Bureau of Statistics of China)
8 L. Wang
grade III was 9,085 km, constituting a high-grade navigation channel network. 9 There were 175 certi fi ed airports, covering 91% of the national economic aggregate, 76% of population and 70% of county-level administrative units. 10 Thus an airport system featuring appropriate scale and suf fi cient function had been established.
With the integration of key logistics nodes and trunk channels, the network advantage of logistics infrastructure is becoming evident. Especially, the rapid development of high-speed rail has released massive cargo transport capacity and played an important role in relieving the railway transport pressure. In 2010, the cargo transport capacity and cargo transport turnover quantity of various transport modes were greatly improved, as shown in Table 1.1 .
1.1.5 Growing Cost Pressure on Logistics Enterprises
In 2010, the price of commodities in China rose steeply due to factors such as excessive issuance of currency, mounting labor cost, and speculation of hot money. Residents’
9 Li shenglin. Speeding up transform of transport development mode and creating new situation of scienti fi c transportation development during “the 12th fi ve-year plan” period. http://www.moc.gov.cn/zhuzhan/zhengwugonggao/jiaotongbu/qita/201012/t20101229_891770.html,2010-12-30 10 Frequent completion achievements of civil aviation during “the 12th fi ve-year plan” period.
http://caac.people.com.cn/GB/114144/13733878.html . 2011-01-14.
Table 1.1 Capacity, transport turnover quantity and growth rate of various cargo transport modes of 2010
Ind Unit Volume
Growth rate of 2010 (percentage point)
Growth rate of 2009 (percentage point)
Change in growth rate (percentage point)
Total cargo transport capacity
Billion tons 32.0 13.4 7.5 5.9
Wherein: railway Billion tons 3.6 9.3 1.9 7.4 Highway Billion tons 24.3 14.0 9.4 4.6 Water transportation Billion tons 3.6 14.0 3.0 11.0 Civil aviation Million tons 5.6 25.1 9.3 15.8 Pipeline Billion tons 0.5 10.3 1.3 9.0 Cargo transport
turnover quantity Billion ton-km 13732.9 12.4 9.8 2.6
Wherein, railway Billion ton-km 2764.4 9.5 0.5 9.0 Highway Billion ton-km 4300.5 15.6 10.7 4.9 Water transportation Billion ton-km 6430.5 11.7 14.0 −2.3 Civil aviation Billion ton-km 17.7 39.9 5.6 34.3 Pipeline Billion ton-km 219.8 8.7 4.1 4.6
Source: Compiled from the China Statistical Bulletin of National Economic and Social Development (2009–2010), published by the National Bureau of Statistics of China
91 Development Environment of China’s Logistics
consumption price grew increasingly quarter by quarter; the annual average price rose by 3.3% over that of previous year. Wherein, price increases for various items are as follows: food price (7.2%), fi xed assets investment price (3.6%), factory price of indus-trial products (5.5%), purchase price of raw materials, fuel and power (9.6%), and production price of agricultural products (10.9%).
In 2010, the price of various production factors of logistics enterprises rose steadily, and caused the enterprises to enter the stage of “high-cost” operation. First, rising wage level led to the rise of labor cost for logistics enterprises. Data from the National Bureau of Statistics show that the per-capita disposable income of urban residents in the nation was 19,100 RMB, which increased by 11.3% compared to that of last year; wherein, per-capita wage income was 13,700 RMB, with an increase of 10.7%. 11 Second, continuous climb in fuel price directly caused sizable increase in transportation and production cost. In 2010, the price of domestic re fi ned petroleum products was adjusted upward four times; the price of gasoline and diesel fuel per ton were increased by 1,090 RMB and 1,060 RMB, respectively. Therefore, the cost pressure of logistics enterprises was substantially heightened. For transport enterprises operating under long-term contracts, it was especially dif fi cult to ame-liorate the rising cost pressure by varying the freight rates. Third, resource limita-tion and environmental constraints added to more cost burden. The logistics industry is the apparent key fi eld for energy saving and emission reduction. However, certain costs are necessary for the reformation of the logistics facilities, equipment and technologies, which in turn elevate the enterprise’s operating cost.
According to the Statistical Research Report on Logistics among Nationwide Key Enterprises issued by the Economic Operations Adjustment Bureau of National Development and Reform Commission, the Trade and External Economic Division of the National Bureau of Statistics, as well as the China Federation of Logistics and Purchasing, in the fi rst three quarters of 2010, the main operations cost of logistics enterprises was increased by 42.7% year on year, and the compensation for labor was increased by 16.6%. Consequently, most logistics enterprises operated under conditions of high cost, low price and minute pro fi t. The previous operations and expansion mode with low wage and low cost has passed, and it is now urgent for the logistics enterprises to reform their operational concepts and modes.
1.2 Policy Environment for the Development of China’s Logistics
The issuance of the Adjustment and Revitalization Plan for Logistics Industry greatly elevated the status of the logistics industry in the national economy. In 2010, relevant departments and local governments at all levels had formulated special
11 National Bureau of Statistics of China. In 2010, income of urban residents increased continu-ously and income of low and middle income groups grew rapidly. http://www.stats.gov.cn/was40/gjtjj_detail.jsp?searchword=%B9%A4%D7%CA&channelid=6697&record=22,2011-04-28
10 L. Wang
programs and local implementation stipulations, to provide policy assurance for the development of the logistics industry. Meanwhile, China has successively put for-ward documents promoting industrial transfer and reconstruction, which played a pivoting role in logistics development.
1.2.1 Special Plans and Local Regulations
2010 was a critical year for the substantiation of the Adjustment and Revitalization Plan for Logistics Industry , during which more than half of the provinces in China issued the Implementation Details on Program for Adjustment and Revitalization Plan for Logistics Industry . Most of the provinces and cities established modern coordination mechanisms for logistics tasks, and some even founded permanent organizations for carrying out major logistics tasks. Many provinces and cities also formulated corresponding special programs and ordinances.
According to the requirement of the Adjustment and Revitalization Plan for Logistics Industry , relevant departments of the Government sped up the formula-tion or issuance of a series of special programs to lead and promote logistics development in key fi elds and regions. These special programs cover seven fi elds, i.e. coal, grain, cold chain for agricultural products, logistics parks, emergency logistics, commercial logistics and logistics standards. The National Development and Reform Commission (NDRC) issued the Logistics Development Program of Cold Chain for Agricultural Products in July, 2010, and the Standardization Administration of China (SAC) issued the Special Program of National Logistics Standards in August, 2010. The Ministry of Commerce disseminated the Special Program of Commercial Logistics Development in March, 2011. In addition, special programs for coal, grain, logistics parks and emergency logistics are also being formulated.
The Development Regulations on Promoting Modern Logistics of Fujian Province, as the fi rst local regulation fostering the development of logistics indus-try in China, was issued and implemented on January 1, 2011. As China’s fi rst local legislation aiming at the logistics industry, it is expected to provide the expe-rience and set an example for formulating the national macro logistics laws in the future.
The Development plan for Express Service in Beijing-Tianjin-Hebei Region (2010–2014) was issued in October, 2010, which was the third regional special program in China for the development of express delivery, following the Development Program of Express Service at Yangtse River Delta Area ( 2009–2013 ) and the Development Program of Express Service in Zhujiang Delta Area ( 2010–2014 ) . The program bears great signi fi cance in breaking through the restriction existing among various administrative divisions, and effectively leading the rational allocation of resources and the optimal network layout of express services.
111 Development Environment of China’s Logistics
1.2.2 Policy Support from Ministries and Commissions
In the past years, many relevant departments have forti fi ed their policy support for logistics development. The Of fi ce of Interdepartmental Joint Conference of National Modern Logistics Task issued the Views on Promoting the Joint Development of the Manufacturing Industry and the Logistics Industry and the Notice on Demonstration Work of the Joint Development of the Manufacturing Industry and the Logistics Industry , respectively, in April and September of 2010. These measures are aimed at publicizing and promoting the joint development of both industries by selecting certain examplarary and demonstrable projects involving certain main manufactur-ing industries.
According to the Notice on Promoting the Development of Drop and Pull Transportation , the NDRC and the Ministry of Transport jointly released the Implementation Plan on Pilot Work of Drop and Pull Transportation in October, 2010. This pilot work has great signi fi cance in reducing logistics costs, improving operations level of the logistics industry and promoting energy saving and emission reduction.
1.2.3 Construction Measures for Rural Area and Agricultural Products Circulation System
During “the Eleventh Five-Year Plan” period (2006–2010), the Central govern-ment has attached great importance to the development of rural markets and issued the Document No.1 in consecutive 5 years for deployment. In 2010, the Ministry of Commerce issued the Views of the Ministry of Commerce on Implementing the 2010 Central Government’s Documents No.1 to implement the Opinions of CPC Central Committee and the State Council on Exerting Greater Efforts in Overall Planning of Urban and Rural Development and Further Solidifying the Foundation for Agricultural and Rural Development . The focuses of these ordinances are as follows. First, developing the rural markets: focusing on projects such as sales of domestic appliances, autos and motorcycles in coun-tryside as well as the “Thousands of Farms and Villages” 12 by centering on developing the rural markets. Second, perfecting the circulation system of agri-cultural products: focusing on implementing the “Double Hundreds of Markets”
12 The “Thousands of Farms and Villages” market project refers to the construction project of mod-ern circulation network for the farms and villages initiated in 2005. The State enticed the chain stores and supermarkets from the city to extend their development to farmlands, by providing fi nancing, subsidy and interest supplement. The scope of the project was a modern circulation network with 250 thousands of stores, constituted from main stores in the cities, hub stores in the towns, and nodal stores in the farmlands. The aim is to cover 75% of the counties with the stores within 3 years, to improve the consumption environment of the farmlands and to meet the produc-tion and livelihood needs of the farmers.
12 L. Wang
13 project, the “Linking Farmers and Supermarkets” for agricultural products 14 project and the construction of business information service systems in rural areas. Third, enhancing the agricultural industry’s level of opening to the outside world: focusing on promoting and expanding the export of advantageous agricul-tural products, and improving the agricultural industry’s quality and ability of attracting foreign capital.
In order to accelerate the construction of modern circulation system of agricul-tural products, in 2010, the Ministry of Commerce together with the Ministry of Finance allocated special funds to the rural logistics service system and planned to establish an ef fi cient, smooth and safe modern circulation system of agricultural products within 3–5 years. In addition, the two ministries allocated special funds to support the “Thousands of Farms and Villages” market project and focused on establishing and transforming 1,200 rural commodity distribution centers to estab-lish a widespread and multilevel rural commodity distribution system. The Ministry of Transport, the National Development and Reform Commission and the Ministry of Finance jointly stipulated that, from December 1, 2010 on, all toll roads in China should exempt vehicles transporting legal full-load of fresh and live agricultural products from any toll charges.
During “the Eleventh Five-Year Plan” period, the Ministry of Finance invested 4.3 billion RMB to support the “Thousands of Farms and Villages” market project, and established 2,667 logistics distribution centers, averaging 0.9 DCs per county; set up 520,000 rural chain stores, covering 80% of towns and 65% of administrative vil-lages. The infrastructures in rural areas have been greatly perfected, and a modern circulation network in which metropolitan DCs as the cornerstone, town-level shops as the mainstay and rural-level shops as the base has been gradually built.
1.2.4 Policy of Undertaking Industrial Transfer
In 2010, confronted with the ever increasing cost and market pressure, the labor-intensive and resource-intensive industries in Eastern China accelerated the move-ment to the Central and Western regions. The State Council and relevant departments issued a series of guidelines to further guide an orderly undertaking of industrial transfer in the Western and Central regions.
13 The “Double-Hundreds of Market” project refers to the construction of agricultural markets initiated in 2006. The State reformed 100 key large-sized wholesale markets and fostered 100 large-sized circulation enterprises for agricultural products, by providing fi nancing, subsidy and interest supplement. The aim of the project was to construct a modern circulation system of agricultural products linkable to international markets, so as to ensure the safety of agricultural products and expand the farmers’ channel for sustainable revenue. 14 The “Linking Farmers and Supermarkets” project refers to the linking among large supermar-kets, circulation enterprises of agricultural products and specialized cooperatives of vegetables, which supplies supermarkets with vegetables purchased directly from vegetable bases for selling.
131 Development Environment of China’s Logistics
In January 2010, the State Council granted the Program of Pilot Zone for Undertaking Industrial Transfer in Wanjiang City Belt . This is the fi rst approved national-level demonstration area for industrial transfer, and signi fi es that the upward industrial transfer has become one of the national strategies. In June 2010, the Ministry of Commerce signed the Memorandum on Construction and Cooperation for Supporting the Undertaking of Industrial Transfer in Wanjiang City Belt with the Anhui Province, and granted much policy supports to the demon-stration area. In July 2010, the Ministry of Industry and Information Technology issued the Guidelines on Promoting the Textile Industry’s Transfer to encourage streamlining and upgrading of the textile industry in the Eastern region, and to transfer part of the manufacturing phases to the Western and Central regions to reduce costs and improve the industry’s competitiveness. In September 2010, the State Council issued the Guidelines of the State Council on Central and Western Regions’ Undertaking of Industrial Transfer , which served as the steering document for the undertaking of industrial transfer in the Western and Central areas. Speci fi c requirements of this document are as follows. First, strengthening the construction of interregional arterial traf fi c and intraregional basic traf fi c network to accelerate the development of multimodal transport, and forming a convenient and ef fi cient comprehensive transportation system. Second, promoting the resource integration and effective utilization of logistics infrastructure to perfect the modern logistics system and to further reduce logistics cost.
Driven by the trend of industrial transfer, logistics infrastructures in the Western and Central regions have been improved continually; meanwhile, the logistics ser-vices in the Eastern coastal areas have gradually penetrated to the Western and Central areas. For example, the coastal harbors have established “Dry Ports” in the inland provinces to extend their harbor functions to the inland; the expanded pas-sageways for container traf fi c and double-decker train to accelerate the circulation of exported goods in the inland and Eastern areas; logistics enterprises have sped up the extension of their networks to the Western and Central areas.
1.2.5 Promotion of Merger and Restructuring of Enterprises
In August 2010, the State Council issued the Opinions on Promoting Merger and Restructuring of Enterprise to accelerate the adjustment and optimization of industrial structure and to promote the merger and restructuring of enter-prises. The Opinions proposed to promote a win-win partnership of advanta-geous enterprises, trans-regional merger and restructuring, overseas merger as well as investment and cooperation, by focusing on industries such as automo-bile, steel, cement, mechanical manufacturing, electrolytic aluminum and rare earth, and by means of favorable policies in fi nance and taxation, banking, capi-tal market and land. In March 2011, the Shandong provincial government issued the Views on Implementing the Opinions on Promoting Merger and Restructuring
14 L. Wang
of Enterprise (No: 27 [2010] of the State Council to actively respond to the Government’s policy decree.
On the business end, many logistics enterprises in China have extended to scale operation and specialized service by actively engaging in various forms of merger and restructuring. Notably, in 2010, Sinotrans and China Changjiang National Shipping Group underwent an in-depth restructuring; China Railway Material Group Co., Ltd. and Xiben New Line Stock Co., Ltd. also signed a contract for restructuring; Alibaba (an e-commerce enterprise) of fi cially became a shareholder of Stars-Express (a private express company); HNA Northern Logistics (a subsidiary of Hainan Airlines Group) acquired 60% shares of TTK Express; Grand China Logistics Group of fi cially acquired Sinosun Logistics Co., Ltd.
1.2.6 Formal Enactment of ECFA
In September 2010, the Economic Cooperation Framework Agreement (ECFA) came into effect of fi cially. The initial acquisition plan of traded goods took effect on January 1 of 2011, which signi fi ed that the cross-strait economic relationship had entered into the “New Era of ECFA” of mutual bene fi t as well as a win-win coop-erative development.
According to the Agreement, the Mainland would lower its tariff of 539 products from Taiwan, which represented16.1% of total 2009 import value from Taiwan to Mainland; in contrast, Taiwan would decrease its tariff of 267 products from Mainland, encompassing four categories, i.e., petrochemical products, mechanical products, textile products and other products. Within 2 years and in three stages, both parties would lower the tariffs for the goods on the initial acquisition list to zero level. In order to resolve possible implementation problems, the General Administration of Customs founded an ECFA Steering Group and the directly administered customs in all China’s main ports founded various task groups. Together with the subordinated customs they constituted a three-level EFCA clear-ance and supervision linkage mechanism.
Driven strongly by the initiation of ECFA, the total amount of cross-strait trade reached a historical high. According to statistics by the General Administration of Customs, in 2010, the total amount of cross-strait trade was 145.37 billion USD, increasing by 36.9% year-on-year. From January to November of 2010, the imported agricultural products from Taiwan with zero tariffs that bene fi ted the Mainland were 12,000 tons; the total value of which reached 16.42 million USD and the tariff preferences reached 18.87 million RMB, increasing by 33.9, 70.7 and 79.5% year-on-year, respectively. According to statistics by the Ministry of Transportation in Taiwan, the volume of containers handled through the cross-strait direct route in 2010 was 1.92 million TEUs, increasing by 22.4% year-on-year. Meanwhile, the volume of air freight from cross-strait direct fl ight was 240 kt, jumping by 1.8 times year-on-year.
151 Development Environment of China’s Logistics
This chapter expounded on the macro environment of logistics development in China in 2010 from the perspective of economic environment and policy environ-ment. For the economic environment, China sped up the transformation of its mode of economic development, promoted the strategic adjustment of economic struc-ture, and enabled the steady and rapid development of its national economy. International trade realized a restorative growth, and the demands of domestic logis-tics increased continually. In recent years, China has continued to ante up the invest-ments in transportation infrastructures; the construction of logistics infrastructures has been notably enhanced and an integrated transportation system has been formed. However, affected by price hikes, cost of various production factors have climbed continually, adding cost pressure to the logistics enterprises.
Regarding the policy environment, relevant departments of the Central Government and local governments at all levels have formulated speci fi c programs and implementation regulations based on the Adjustment and Revitalization Plan for Logistics Industry . The State paid great attention to the development of markets in rural areas and released a series of measures to accelerate the construction of rural areas and the circulation systems of agricultural products. These actions have provided policy assurance for the development of China’s logistics. Meanwhile, the successively issued documents on industrial transfer and restructuring also played a leading role in logistics development. It was noteworthy that the Economic Cooperation Framework Agreement (ECFA), formally enacted in 2010, has pro-moted a rapid development of cross-strait trade and logistics.
17B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_2, © Springer-Verlag Berlin Heidelberg 2013
In 2010, the impact of the international fi nancial crisis on China was signi fi cantly lessened. Thus China’s economy had returned to the course of rapid growth. The scale of overall development of the logistics market continued to expand and improved over that of 2009. The international logistics market in China recovered rapidly and foreign-funded logistics enterprises kept augmenting their efforts in exploiting the Chinese market. Domestic logistics enterprises also strived to enhance their market competitiveness.
This chapter consists of three sections. The fi rst section focuses on the growth of total value and total expenses of social logistics and other related logistics indicators; it also provides statistical data of these indicators for 2006–2010 to show the growth trend of overall scale of China’s logistics market. The second section discusses the notable features of China’s logistics market development in 2010 from a demand perspective. The third section focuses on the supply of logistics market in 2010, that is, the development characteristics of the logistics industry.
2.1 Overall Scale of the Logistics Market
In 2010, with the improvement of economic environment at home and abroad, the total amounts of various logistics values in China increased markedly over last year.
X.-m. Jiang (*) College of Management, Tianjin Normal University , No. 393 Binshuixidao Rd., Xiqing District , Tianjin 300387, P.R. China e-mail: [email protected]
Chapter 2 Development Status of China’s Logistics Market
Xiao-mei Jiang
18 X.-m. Jiang
2.1.1 Total Value of Social Logistics
In 2010, the total value of social logistics in China was 125.4 trillion RMB, an increase of 29.7% over the 2009 value and an upswing of 22.3 percentage points over the 2009 growth rate. The total value and growth rate of social logistics for 2006–2010 are shown in Fig. 2.1 .
2.1.2 Total Expenses of Social Logistics
In 2010, the total expenses of social logistics in China reached 7.10 trillion RMB, with an increase of 16.7% over the previous year; it accounted for 17.8% of the annual GDP, but was 0.3 percentage points lower than that of 2009. The total expenses of social logistics and the share in GDP for 2006–2010 are shown in Table 2.1 .
In 2010, the transportation expenses reached 3.83 trillion RMB, which accounted for 54.0% of the total expenses of social logistics; the storage expenses were 2.41 trillion RMB, accounting for 33.9% of the total expenses; and the management expenses reached 0.86 trillion RMB, which was 12.1% of the total expenses. The composition of total expenses of China’s social logistics in 2010 is shown in Fig. 2.2 .
2.1.3 Added Value of Logistics Industry
In 2010, the added value of China’s logistics industry reached 2.73 trillion RMB, which was an increase of 18.2% over the previous year. It accounted for 6.9% of the annual GDP and 16.0% of the added value of the service industry. The added value of logistics industry and its share in service industry for 2006–2010 are shown in Table 2.2 .
59.6
75.2
89.996.7
125.4
24.026.2
19.5
7.4
29.7
0
20
40
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80
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140
2006 2007 2008 2009 2010Year
Tot
al V
alue
of S
ocia
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istic
s(T
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n R
MB
)
0
5
10
15
20
25
30
35
Gro
wth
Rat
e(%
)
Fig. 2.1 Total value and growth rate of social logistics for 2006–2010 ( Source : Compiled from the National Logistics Report (2006–2010), published by the National Development and Reform Commission, the National Bureau of Statistics of China and the China Federation of Logistics and Purchasing)
192 Development Status of China’s Logistics Market
Table 2.1 Total expenses and share in GDP of social logistics in China for 2006–2010
Year Total expenses of logistics (trillion RMB) Share in GDP (%)
2006 3.84 18.3 2007 4.54 18.4 2008 5.45 18.1 2009 6.08 18.1 2010 7.10 17.8
Source : Compiled from the National Logistics Report (2006–2010), published by the National Development and Reform Commission, the National Bureau of Statistics of China and the China Federation of Logistics and Purchasing
Transportationexpenses,
54.0%
Managementexpenses,
12.1%
Storageexpenses,
33.9%
Fig. 2.2 Composition of total expenses of China’s social logistics in 2010 ( Source : Compiled from the National Logistics Report (2010), published by the National Development and Reform Commission, the National Bureau of Statistics of China and the China Federation of Logistics and Purchasing growth rate (%))
Table 2.2 Added value of China’s logistics industry and share in service industry for 2006–2010
Year Added value of logistics (trillion RMB) Share in service industry (%)
2006 1.41 17.1 2007 1.70 17.6 2008 2.00 16.5 2009 2.31 16.1 2010 2.73 16.0
Source : Compiled from the National Logistics Report (2006–2010), published by the National Development and Reform Commission, the National Bureau of Statistics of China and the China Federation of Logistics and Purchasing
20 X.-m. Jiang
2.1.4 Cargo Transport Capacity
In 2010, the total capacity of nationwide cargo transport was 32.03 billion tons, showing an increase of 13.4% over that of 2009. The growth rate of various transport modes recovered from the previous slump vibrantly. Cargo transport capacity and growth rate of various transport modes for 2006–2010 are shown in Table 2.3 .
2.1.5 Cargo Throughput at Ports, Foreign Trade Throughput and Container Throughput
Invigorated by the rapid recovery of import and export, the throughput at ports in China increased swiftly in 2010 with an obviously higher magnitude over the previ-ous 2 years. The cargo throughput at ports nationwide reached 8.93 billion tons, with an increase of 16.7% over that of 2009, in which foreign trade throughput was 2.50 billion tons, with an increase of 14.7% over that of 2009. Nationwide cargo throughput at ports and growth rate for 2006–2010 are shown in Table 2.4 .
In 2010, nationwide container throughput at ports increased signi fi cantly with a total amount of 146 million TEUs, representing a growth of 19.4% over that of 2009. Compared with the peak volumes of 2007 and 2008 before the fi nancial crisis, the 2010 volume signi fi es an increase of 27.7% and 13.9%, respectively. Nationwide container throughput at ports and its growth rate for 2006–2010 are shown in Fig. 2.3 .
Table 2.3 Cargo transport capacity and growth rate of various transport modes for 2006–2010
Item Unit 2006 2007 2008 2009 2010
Cargo transport capacity
Railway Billion tons 2.88 3.14 3.31 3.33 3.64 Highway Billion tons 14.61 16.28 18.17 20.97 24.25 Water transportation Billion tons 2.44 2.73 2.97 3.14 3.64 Civil aviation Million tons 3.49 4.02 4.08 4.46 5.57 Pipeline Billion tons 0.32 0.38 0.45 0.44 0.49 Total Billion tons 20.25 22.53 24.90 27.88 32.03
Growth rate Railway % 7.1 9.0 4.7 1.9 9.3 Highway % 8.9 11.0 10.9 9.4 14.0 Water transportation % 11.0 9.7 5.7 3.0 14.0 Civil aviation % 13.9 15.0 1.4 9.3 25.1 Pipeline % 6.7 17.9 15.4 1.3 10.3 Total % 8.9 10.7 9.4 7.5 13.4
Source : Compiled from the China Statistical Bulletin of National Economic and Social Development (2006–2010), published by the National Bureau of Statistics of China
212 Development Status of China’s Logistics Market
2.1.6 Cargo Throughput at Airports
In 2010, the cargo throughput at airports in China reached 11.29 million tons, with an increase of 19.4% over that of 2009; the rate of growth rose by 12.4% compared with that of 2009. Cargo throughput at airports in China and its growth for 2008–2010 are shown in Table 2.5 .
2.2 Demand for Logistics
In 2010, the international logistics market in China exhibited an evident rebound. The logistics market for bulk energy and raw materials still maintained the sizable scale. The logistics market in Midwest, driven by the Westward Movement of manufacturing industry, grew rapidly. Markets for automobile, online shopping had witnessed an explosive growth in recent consecutive years. Emergency logistics market was also beginning to bud.
Table 2.4 Nationwide cargo throughput at ports and growth rate for 2006–2010
Year
Cargo throughput Wherein, foreign trade throughput
Volume (billion tons) Growth rate (%) Volume (billion tons) Growth rate (%)
2006 5.57 14.8 1.61 18.1 2007 6.41 15.1 1.85 14.6 2008 7.02 9.6 1.99 7.4 2009 7.66 9.0 2.18 9.8 2010 8.93 16.7 2.50 14.7
Source : Compiled from the Statistical Bulletin of Highway and Waterway Transportation Industry ( 2006–2010 ), published by the Ministry of Transport of China
Fig. 2.3 Nationwide container throughput at ports and growth rate for 2006–2010 ( Source : Compiled from the Statistical Bulletin Highway and Waterway Transportation Industry ( 2006–2010 ), published by the Ministry of Transport of China)
94
128 122
146
114
22.3
−4.6
12.1
19.4
23.8
0
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40
60
80
100
120
140
160
2006 2007 2008 2009 2010(Year)
Con
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er T
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t(M
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EU
s)
−10
−5
0
5
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wth
Rat
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)
Container Throughput (Million TEUs) Growth Rate (%)
22 X.-m. Jiang
2.2.1 Rapid Recovery in International Logistics Market
Drawn by the rapid rise of import and export, the international logistics market in China witnessed an obvious recovery in 2010. Foreign trade throughput, container throughput and international air cargo throughput all achieved signi fi cant growth compared with that of 2009; the pace of growth surpassed that of the peak level in 2007 and 2008.
In 2010, six of the world’s top ten container ports were in China; this number is four more than that of 5 years ago. Among them, Shanghai Port ranked the highest (as shown in Table 2.6 ). Cargo throughput at Hong Kong International Airport has surpassed that of the Memphis International Airport for the fi rst time and it became the world’s largest air cargo hub airport. The global ranking of Pudong Airport’s cargo service also changed from the previous (5 years ago) No. 9 to No. 3.
Table 2.5 Cargo throughput at airports and its growth for 2008–2010
Airlines
Cargo throughput (million tons) Growth rate (%)
Share in total cargo throughout (%)
2008 2009 2010 2008 2009 2010 2008 2009 2010
Domestic airlines 5.64 6.25 7.22 2.61 10.85 15.5 63.9 66.1 64.0 International airlines 3.19 3.21 4.07 2.60 0.32 27.0 36.1 33.9 36.0 Total 8.83 9.46 11.29 2.61 7.04 19.4 100 100 100
Source : Compiled from the Statistical Bulletin of Nationwide Airports (2008–2010), published by the Civil Aviation Administration of China
Table 2.6 Global top ten container ports in 2010
Rank Port Container throughput (million TEUs) Country
1 Shanghai 29.1 China 2 Singapore 28.4 Singapore 3 Hong Kong 23.4 China 4 Shenzhen 22.5 China 5 Fushan 14.1 Korea 6 Ningbo-Zhoushan 13.2 China 7 Guangzhou 12.5 China 8 Qingdao 12 China 9 Dubai 11.6 United Arab Emirates 10 Rotterdam 11.0 The Netherlands
Source : The Alphaliner Weekly, issue 14, 2011
232 Development Status of China’s Logistics Market
2.2.2 Logistics for Bulk Energy and Raw Materials
Each year China generates a large fl ow of logistics for bulk energy and raw materials. The reason being that the overall scale of China’s economy is huge, and in a phase of rapid industrial development and urbanization, so it consumes large amount of bulk energy and raw materials such as coal, petroleum and steel every year. For instance, in 2010 alone, 3.18 billion tons of coal, 0.39 billion tons of crude oil and 0.77 billion tons of steel as well as 1.86 billion tons of cement were consumed in China. Another reason is that large amount of energy and raw materials concen-trates in the Central and Western regions, while the mass demand concentrates in the Eastern coastal areas; this entails the long-distance transport of its energy and raw materials. Consumption of certain bulk energy and raw materials in China for 2006–2010 is shown in Table 2.7 .
Transport of bulk energy and raw materials in China relies chie fl y on railway and water transport. Currently, the national railway transport capacity for bulk goods and materials, such as coal, smelting materials, petroleum, fertilizer and pesticides, accounts for about 80% of all cargo transport capacity. Above 60% of transport volume at China’s major ports are mainly due to coal, petroleum, metal ores, steel and other bulk energy and raw materials. In addition, China has also built a number of special quays for trans-porting coal and petroleum, and some logistics infrastructures such as coal and steel logistics parks, to improve the logistics ef fi ciency of transporting these materials.
2.2.3 Rapid Growth in the Midwestern Logistics Market
In recent years, the production cost in eastern China has risen incessantly, forcing certain labor-intensive and resource-intensive manufacturing industries to migrate towards the Central and Western regions. Before 2010, industries moving westward were mainly those which have a strong dependency on raw materials and energy,
Table 2.7 Consumption of certain bulk energy and raw materials in China for 2006–2010
(Unit: billion tons)
Year Coal Crude Oil Steel Cement
2006 2.37 0.32 0.45 1.20 2007 2.58 0.34 0.52 1.33 2008 2.74 0.36 0.54 1.37 2009 3.02 0.38 0.69 1.63 2010 3.18 0.39 0.77 1.86 Total 13.89 1.79 2.97 7.39
Source : Compiled from the China Statistical Bulletin of National Economic and Social Develop-ment (2006–2010), published by the National Bureau of Statistics of China
24 X.-m. Jiang
such as ceramic, cement and mineral resources processing, as well as low-end labor-intensive industries for toys, apparels, and shoes. In 2010, the electronic infor-mation industry, led by companies such as Hewlett-Packard, Dell, began to accelerate the relocation towards the Central and Western regions.
The westward shift of the manufacturing industries stimulated the growth of demand for logistics in the Central and Western regions, and also attracted the logis-tics service fi rms in the Eastern coastal region to gradually expand westward. Over the past 2 years, the pace of network positioning of logistics service providers in the Central and Western regions has been much faster. For instance, in 2010, HP’s long-term partners – Schenker and COSCO Logistics, trailing HP’s footsteps, expanded their business in the Western region. Likewise, in 2010, TNT Hoau added 92 logis-tics routes in China, of which 60% of them are in the Western region. Also DHL Global Forwarding established fi ve new branches in China in 2010, of which two are located in the Central region.
2.2.4 Rapid Growth of Market Segments of Various Industries
2.2.4.1 The Automobile Market
In 2010, the Government continued to implement policies encouraging automobile consumption; the annual automobile output and sales volume both exceeded 18 mil-lion, showing an annual growth rate of more than 30%. China’s automobile output and growth rate for 2006–2010 are shown in Fig. 2.4 , and the sales volume and growth rate are shown in Fig. 2.5 .
The market for automobile logistics continued to expand in 2010. For instance, the volume of fi nished-automobile transport business of China’s leading auto logistics company – Anji Auto Logistics Co., Ltd. reached fi ve million units in 2010, with a
7.28
9.35
18.26
8.88
13.79
47.6
27.5
22.0
5.2
32.4
0
2
4
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2006 2007 2008 2009 2010
Year
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omob
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utpu
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45
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)
Fig. 2.4 China’s automobile output and growth rate for 2006–2010 ( Source : Compiled from related data in Statistical Information Network of China Association of Automobile Manufacturers)
252 Development Status of China’s Logistics Market
growth of 38.9% year on year; the revenue of fi nished-automobile transport of another large company – Chongqing Changan Minsheng Logistics Co. Ltd., achieved 1.74 billion RMB in 2010, with an increase of 8.5%, and the income from supply chain management services of auto raw materials and parts reached 960 million RMB, with an increase of 71.9% year on year.
Meanwhile, China’s auto logistics market also saw a rising trend of concentration. For instance, the top ten companies account for more than 80% of the fi nished-automobile logistics market share in 2010.
2.2.4.2 The Online Shopping Market
In 2010, China’s online shopping market continued to grow rapidly, with an annual transaction value of 498 billion RMB, which is an increase by 89.4% over that of 2009. The proportion of online shopping transaction value in total retail value of consumption goods rose from 2.1% in 2009 to 3.2% in 2010.
Pulled by the rapid growth of online shopping, logistics demand for online shop-ping service is also soaring. According to the statistics by China Express Association, the daily business volume of express service exceeded ten million pieces in 2010, a volume ranked number three in the world. In 2010, the business volume of express service providers above the designated size 1 totaled 2.34 billion pieces, with an increase of 25.9% year on year; business income totaled 57.5 billion RMB, with an increase of 20.0%.
13.64
7.22
8.79 9.38
18.06
25.3
21.8
6.7
45.5
32.4
0
2
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2006 2007 2008 2009 2010Year
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Uni
ts)
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)
Fig. 2.5 China’s automobile sales volume and growth rate for 2006–2010 ( Source : Compiled from related data in Statistical Information Net of China Association of Automobile Manufacturers)
1 Classi fi cation standards of national express enterprises above the designated size: express enter-prises with an annual revenue of above two million RMB in the Eastern regions, express enterprises with an annual revenue of above 0.2 million RMB in the Central regions, and express enterprises with an annual revenue of above 0.1 million RMB in the Western regions.
26 X.-m. Jiang
A number of B2C and C2C e-commerce enterprises improved their order handling and goods distribution capacity through various methods such as self-built distribu-tion center, acquisition of other logistics companies, and strategic cooperation with other logistics companies. For instance, Dangdang.com, an e-commerce book seller, has set up nine distribution centers in six cities across the nation with a total storeroom area of 160,000 square meters. At the end of 2009, China’s largest C2C platform enterprise – Taobao signed a strategic partnership agreement with four leading logistics companies to start the “China SME Business Services Partner Program.” Jingdong Mall, China’s largest enterprise for network electronic product sales, upon acquiring a fi nancing of 150 million USD in 2010, has appropriated 50% of the capital to improvement of storage, distribution, after-sale service, etc.
2.2.4.3 Cold Chain for Foods
Food consumption of China’s urban residents has been growing rapidly along with the yearly increase of their personal disposable income. In 2010, the per capita food expenditure of urban residents was 4,800 RMB, increasing by 64.9% over 5 years ago, reckoning an average annual increase of 10.5%. Out of all food expenditures, the consumer spending on fresh products, such as beef and lamb, aquatic products, fresh vegetables and fruits, increased the fastest. The per capita spending of urban residents on fresh vegetables and fruits increased respectively by 83.7% and 82.5% over 5 years ago.
The rapid growth of consumption of fresh products and the higher quality require-ments for fresh products by residents have propelled the rapid growth of food cold chain logistics. At present, about 400 million tons of fresh agricultural products fl ows into the circulation system per year in China, and the proportion of agricultural products transported via cold chain logistics is rising gradually. For fruits and vegetables, meat, and aquatic product, 5%, 15% and 23% of the volume were respectively circulated through cold chains, while respectively 15%, 30% and 40% 2 of them were shipped using refrigerated transport. On the whole, the proportion of food transported via cold chain logistics still remains at a low level, so cold chain logistics for foods has ample room for future development in China.
2.2.5 The Emergence of Emergency Logistics
China is a country with high incidence of natural disasters. Since 2008, several natural calamities such as massive earthquake and mud slide had occurred one after another. For instance, the Sichuan earthquake in 2008 had devastated ten provinces
2 Development Plan for Agricultural Products Cold Chain Logistics, published by National Development and Reform Commission. http://www.ndrc.gov.cn/zcfb/zcfbtz/2010tz/t20100730_364312.htm,2010-06-18
272 Development Status of China’s Logistics Market
and caused 90,000 people dead or missing. The governments and the social sectors are giving much more attention to the establishing of emergency social response system. As an important component of the emergency social response system, emer-gency logistics system is also being brought up to speed.
Since 2008, a number of emergency logistics support bases have been under con-struction or completed for use. For instance, in 2008, the Hubei logistics and distribution center for emergency support and mobilization was completed in Wuhan; construction of the Xi’an food logistics emergency base occupying an area of about 200,000 square meters was started. In 2010, the Nanjing disaster relief warehousing center with an area of 5,000 square meters was of fi cially opened; the Yunnan disaster relief reserve center with an area of 26,000 square meters was completed in Kunming, which could meet the emergency placement and materials demand for 700,000 people.
2.3 The Status of Logistics Providers
In 2010, the overall concentration and pro fi tability of China’s logistics industry were still low. After many years of development, foreign-funded logistics enter-prises have entered China’s logistics market and waged a direct competition at the domestic enterprises; while local logistics enterprises elevated their competitiveness through direct fi nancing, improvement of networking and other ways.
2.3.1 Industrial Concentration and Pro fi tability
2.3.1.1 Industrial Concentration
China’s logistics industry has remained at a low industrial concentration over the past decade. There are many logistics enterprises, but few large ones; the average assets and operating income of these enterprises are fairly low. According to the fi ndings of the second economic census by the National Bureau of Statistics, at the end of 2008, there were totally 148,000 transportation, warehousing and postal ser-vice enterprises, but the average total assets of all logistics enterprises was only 28 million RMB; the average for domestic enterprises was 25 million RMB and that for foreign enterprises was 170 million RMB.
According to the survey by the China Federation of Logistics and Purchasing, in 2009, the main business income of China’s top 50 key logistics enterprises accounted for only 13.3% of the total revenue of national logistics-related indus-tries. Only one out of the top 50 enterprises had main business income of more than 100 billion RMB, nine of them over ten billion RMB. In addition, among these top 50 enterprises, those with assets greater than one billion RMB accounted for only 14.2%, and enterprises with assets less than 50 million RMB accounted for 44.7%.
28 X.-m. Jiang
2.3.1.2 Industrial Pro fi tability
In recent years, although the business scale of logistics enterprises has noticeably increased, yet the added investment expenses in new equipment and technology and the sharp price hike of land, fuel, and labor substantially boosted the operating costs of the logistics enterprises. Meanwhile, hampered by the increasingly intense market competition and the overall low service level of logistics enterprises, the fees for logistics services could hardly be raised. Therefore, the pro fi t margin of the logistics industry in recent years has been very thin, so these enterprises are under greater operational pressure. According to the survey by the Logistics Research Center at Nankai University, during 2007–2010, the pro fi t margin of China’s logistics enterprises concentrated mainly in the 3–5% and 5–10% level, and the pro fi tability of about half of the enterprises was lower than 5%.
2.3.2 Foreign-Funded Logistics Enterprises
Prior to 2006, China’s logistics market was only partially open to the foreign-funded enterprises; then it became fully open in 2006. By 2010, a large number of foreign-funded logistics enterprises had been operating in China’s market, and created a phase of all-round exploitation of the Chinese market. They have taken several steps in strengthening their business clout in this new-found market.
2.3.2.1 Expansion of Network Coverage by Various Modes
Several tactics are adopted by the foreign-funded logistics enterprises to expand their network coverage in China. The fi rst avenue is to build the network through direct investment. For instance, in October 2010, UPS built a Shared Service Center in Hefei, a city in the Central region. It is a comprehensive shared services base which integrates fi nancial settlement, call center, software development, human resource management and other related functions, and is UPS’s largest shared services base in Asia-Paci fi c region.
The second avenue is to enhance the operational capabilities of logistics network by infusing further investment. In March 2007, TNT acquired China’s largest highway transport enterprise – Huayu Logistics Group. In September 2010, TNT announced that it would invest additional 1.5 billion RMB in TNT Hoau in the next few years, in order to optimize the national transport network and establish regional distribution centers.
The third way is to improve the network placement through cooperation with domestic logistics enterprises. For instance, DHL has established a cooperative rela-tionship with China Railway Express in rail transport and a number of related enter-prises in highway transportation.
Up to 2010, most of the world’s top 50 multinational logistics enterprises have entered China’s market, conducting business in more than 200 cities.
292 Development Status of China’s Logistics Market
2.3.2.2 Expansion Towards Emerging Logistics Fields
In 2010, DHL announced it would build a new logistics center with an area of 5,000 square meters in Shanghai, to specialize in logistics services for apparels and ready-made clothes, and to provide fashion retailers with services such as price-mark-ing, sorting, labeling, and picking and packaging. In 2010, UPS formed a strategic alliance with “AliExpress”, an online wholesale e-commerce platform subordi-nated to Alibaba; through “AliExpress”, Alibaba’s customers can enjoy online freight services. This is the second incidence for UPS to engage in e-commerce logistics in China.
2.3.2.3 Acceleration of Market Placement in the Central and Western Regions
From the perspective of spatial placement, with their customers of manufactur-ing industries migrating towards the Central and Western regions and the rising operating costs in the Eastern region, many foreign-funded logistics enterprises had accelerated their network layout in the Central and Western regions. By the end of 2010, dozens of large foreign-funded logistics enterprises such as DHL, UPS, FedEx, TNT, Maersk, Schenker had entered cities like Chengdu, Chongqing, Changsha, and Hefei in the Central and Western regions to extend their network layout.
2.3.2.4 Active Expansion to Serve China’s Domestic Customers
Foreign-funded logistics enterprises have also set their eyes on the fertile fi eld of domestic logistics market. For instance, in order to meet the demand of China’s small and medium enterprises in electronics, light industry, and textile industry, Federal Express added seven types of packaging materials; DHL launched a brand new packaging service named “DHL heavy treasure box” to meet its customers’ demand for express delivery of 50–150 kg cargos. Japan’s Itochu Corporation undertook the procurement and transpor-tation services of Shenyang Northern Transport Heavy Industry Group Co., Ltd., to provide customized logistics services with the “transfer sales model.”
2.3.3 Domestic Logistics Enterprises
With the recent years’ gradual economic recovery, demand for logistics services has grown steadily. In 2010, China’s domestic logistics enterprises seized the market development opportunities to improve their competitiveness through various means.
30 X.-m. Jiang
2.3.3.1 Expansion in Scale Through Direct Financing
In 2010, the IPO fi nancing in logistics industry began to pick up, resulting in seven listed enterprises with a total fi nancing sum of 2.70 billion USD. In terms of market segments, enterprises related to shipping and port led the IPO list; three ports were listed through stock issuance in 2010 and the total IPO fi nancing amount reached approximately 2.16 billion USD.
During 2006–2010, China’s logistics industry registered a total of 47 cases of venture capital/private equity with a total fi nancing amount of 4.05 billion USD. Among them, 15 cases came from the logistics industry in 2010 with a total invest-ment amount of 1.37 billion USD, both fi gures representing the highest historical level. The biggest deal among these investment moves is by the Blackstone Group and other investors who invested a total sum around 600 million USD in an agricul-tural product logistics park in Shandong Province in March 2010.
2.3.3.2 Improvement of Network Placement
With the rapid growth of domestic logistics market, more and more local logistics enterprises began to upgrade their domestic distribution network and improve the density of their network coverage. For example, Shanghai Yuancheng Group, engaging chie fl y in highway express and inter-city delivery, has been improving its national network layout since 2008. Up to the end of 2010, the number of its terminal busi-ness outlets had reached 2,000, which could achieve direct highway delivery to nearly 300 cities nationwide.
Up to 2010, Shanghai Deppon Logistics, engaging in domestic highway trans-port and air transport forwarding, had established more than 910 business outlets in 27 provinces, cities and autonomous regions, with the logistics network covering more than 500 cities and townships. The company plans to increase the number of business outlets to more than 2,500 by 2012.
This chapter presents the overall development status and the characteristics of China’s logistics market from the perspectives of overall market size, market demand and market supply. With respect to the overall scale, the improvement of macro economy at home and abroad enabled the logistics market in China to recover rap-idly in 2010; the total social logistics cost, throughput at ports and container through-put all increased sharply compared with that of 2009, and exceeded the peak levels in 2007 and 2008 prior to the global fi nancial crisis. In terms of logistics demand for 2010, international logistics market recovered swiftly from the slump caused by the international fi nancial crisis, the logistics demand of bulk energy and raw materials remained very large. Since the logistics market demand in the Central and Western regions grew signi fi cantly faster, logistics companies were drawn to extend their service areas towards these developing regions. Logistics markets for autos, online shopping, and food cold chain all showed a high growth, and emergency logistics also started to take shape in China. On the supply side of logistics, the concentration
312 Development Status of China’s Logistics Market
of overall logistics industry was still very low; the logistics providers are mainly composed of a high proportion of small enterprises. Foreign-funded enterprises continued to fortify their network construction, actively entering into new logistics market segments, and intensifying their exploitation of China’s local customers; they are competing directly and intensely with local Chinese logistics enterprises. Domestic logistics enterprises have taken actions in direct fi nancing, improvement of network coverage and upgrading services to actively improve their market competitiveness as well.
33B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_3, © Springer-Verlag Berlin Heidelberg 2013
In 2010, with hefty investment support from the Government, China’s logistics infra-structure construction continued to develop ragingly. A number of transport infra-structure projects were completed and went into operation, which continually improved the transport network structure and increased inter-regional transport capacity. The improvement of quality and quantity of warehousing facilities, the establishment of bonded logistics centers in inland regions, as well as the construc-tion of public logistics information platforms further enhanced China’s logistics operational ef fi ciency.
This chapter fi rst gives a brief account of China’s investment in logistics infra-structure during 2006–2010, and then describes the construction of various major logistics infrastructures in 2010. These logistics infrastructures, including railway, highway, waterway, airport, warehousing facility, logistics park (logistics center), as well as logistics information facility, are then discussed in more detail. Most statis-tics cited cover the period of 2006–2010 to afford a broader view of China’s logis-tics infrastructure development in recent years.
3.1 Investment in Logistics Infrastructure
In 2010, under the support of the Economic Stimulus policies from the Government, the investment scale of China’s logistics infrastructure still remained at a very high level, totaling a yearly investment of over 3,000 billion RMB. Table 3.1 shows the fi xed assets investment in China’s logistics industry from 2006 to 2010.
X.-m. Jiang (*) College of Management, Tianjin Normal University , No. 393 Binshuixidao Rd., Xiqing District , Tianjin 300387, P.R. China e-mail: [email protected]
Chapter 3 Development Status of China’s Logistics Infrastructure
Xiao-mei Jiang
34 X.-m. Jiang
3.2 Railway
In 2010, the scope of the railway network and the transport were further expanded. Two inter-regional railways were completed and began operation. Development of heavy haul railways effectively enhanced the transport capacity of existing railways.
3.2.1 Status of Railroad Network and Transport Capacity
With the successive completion of railway projects started in previous years, China’s railroad network continued to expand in 2010. The newly added railway mileage amounted to 5.66 thousand km for the year. The nation’s total railway service mile-age reached 91,000 km, a fi gure ranking second in the world. Meanwhile, China’s railway network structure is being continually optimized. On the one hand, the ser-vice mileage in the Western region increased faster than that in the other regions, accounting for 39.6% of the nation’s total service mileage; it was increased by 1.2 percentage points higher than that of last year. On the other hand, the proportions of multi-track railway and electri fi ed railway continued to climb. Table 3.2 shows the status of China’s railway network in 2010.
In 2010, the total cargo transport capacity of railway in China amounted to 3.64 billion tons. Figure 3.1 shows the transport capacity of major cargos and their pro-portion in total cargo transport capacity.
3.2.2 Inter-regional Railway
In 2010, two major railways bearing inter-regional cargo transportation began operation. They were both critical lines in the main framework of China’s rail-way network. One is the Baotou-Xi’an Railway, primarily for transporting coals.
Table 3.1 Fixed assets investment and its composition of China’s logistics industry for 2006–2010
(Unit: billion RMB)
Year Transportation industry
Warehousing and postal industry Trade industry Total
2006 977.5 51.0 188.5 1217.0 2007 1097.2 79.0 251.9 1428.1 2008 1312.2 112.2 326.3 1750.7 2009 1947.5 176.6 445.1 2569.2 2010 2322.1 223.8 521.6 3067.5 Total 7656.5 642.6 1733.4 10032.5
Source : Compiled from Logistics Information Statistics (2006–2010) pub-lished by the China Logistics Information Centre
353 Development Status of China’s Logistics Infrastructure
The opening of this railway effectively mitigated the capacity bottleneck in out-ward coal transport of Inner Mongolia – an important coal-producing province in the west. The other line is Yichang-Wanzhou Railway. This railway is the eastern corridor for entering Sichuan and Chongqing in the Western region, and the access to Hubei in the Central region, so it plays a key role in promoting a smoother cargo transport between the Central region and the Western region.
3.2.3 Heavy Haul Railway and Freight Car
In recent years, China’s railway department has enhanced the transport capacity of existing lines by way of rapidly developing heavy haul railways and freight cars in addition to newly-built railways.
Table 3.2 China’s railway service mileage in 2010
Item Unit Value Growth rate (%)
Total service mileage 1,000 km 91 6.6 Multi-track railway mileage 1,000 km 37 12.9 Percent of multi-track railway % 41.1 2.3 Electri fi ed railway mileage 1,000 km 42 19.1 Percent of electri fi ed railway % 46.6 4.9
Source : Compiled from the Railway Statistical Bulletin (2010), published by the Ministry of Railways of China
Container, 0.09 ,2%
Others, 0.36 ,10%
Fertilizer andPesticide, 0.09 ,
2%
SmeltingMaterials, 0.86 ,
24%
Coal, 2.00 ,55%
Petroleum, 0.14 ,4%
Grain, 0.10 , 3%
Fig. 3.1 China’s railway transport capacity of major cargos and their proportions in total cargo transport capacity for 2010 ( Source : Compiled from the Railway Statistical Bulletin (2010) , pub-lished by the Ministry of Railways of China)
36 X.-m. Jiang
By 2010, China has developed and constructed 70-ton general freight car, 80-ton dedicated freight car for coal, and 100-ton dedicated freight car for ore and steel. It has begun operating the 10,000-ton and 20,000-ton heavy haul trains on the Datong-Qinhuangdao line and Datong-Baotou line, and ran the 5,000–6,500 ton freight trains on the busy main railways such as Beijing-Guangzhou line and Beijing- Shanghai line.
3.3 Highway
In 2010, China intensi fi ed its effort on the construction of expressways and rural highways. The density and quality of road network were further elevated. The num-ber of freight cars was substantially increased and resulting in a higher average load capacity.
3.3.1 Road Network Status
The total mileage of China’s highway exceeded four million km in 2010, including an increase of 147,400 km over that of 2009. The road network density reached 41.75 km/100 km 2 , which was increased by 1.53 km/100 km 2 , compared with the previous year. The national trunk line network, composed mainly of expressways and highways above grade II was thus completed.
3.3.2 Expressway
In 2010, China invested 686.2 billion RMB in expressway construction, an amount which is 28.9% higher than that of the previous year. The newly added mileage was 9,100 km, which makes the total mileage of expressway 74,100 km, ranking num-ber 2 in the world. By the end of 2010, 11 provinces had an expressway mileage above 3,000 km, thus forming a major framework of national expressway network.
3.3.3 Rural Highway
Rural highway construction has been a key aspect in China’s highway construction in recent years. The total investment in rural highway construction from 2006 to 2010 amounted to 950 billion RMB, with newly-built and reconstructed rural high-way of 1.87 million km. By the end of 2010, rural highway mileage over the country reached 3.51 million km, covering 99% of the villages.
373 Development Status of China’s Logistics Infrastructure
3.3.4 Truck
By the end of 2010, China owned 10.5 million trucks with an average tonnage of 5.71 tons per truck, increasing by 1.51 tons compared with that in 2005. The num-ber of dedicated trucks reached 538,000, increasing by 1.2 times compared with that fi ve of years ago. Figure 3.2 shows the growth of average load of trucks in China from 2006 to 2010.
3.4 Waterway
China made a sizable investment to construct a number of quay berths in 2010, which further improved the operating capacity of its ports. The number of ports with cargo throughput over 100 million tons and container throughput over one million TEUs continued to climb. While the number of ships continued to drop, the average load of the ships grew much higher.
3.4.1 Investment Scale
The total amount of investment for China’s waterway construction in 2010 was 117.1 billion RMB, increasing by 10.5% compared with that of the previous year. The
4.20 4.414.58 4.84
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1
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5
6
2006 2007 2008 2009 2010Year
Ave
rage
Ton
nage
(T
on/T
ruck
)
Average tonnage of trucks in previous year Average tonnage growth of trucks
Fig. 3.2 Average load growth of trucks in China for 2006–2010 ( Source : Compiled from the Statistical Bulletin of Highway and Waterway Transportation Industry (2006–2010), published by the Ministry of Transport of China)
38 X.-m. Jiang
investment in coastal waterway facility was 83.7 billion RMB, accounting for 71.5% of the yearly total investment; the inland waterway construction investment was 33.4 billion RMB, accounting for the remaining 28.5% of the total investment. Figure 3.3 shows China’s waterway construction investment and growth for 2006–2010.
3.4.2 Port
In 2010, operating capacity of China’s coastal and inland ports continued to expand. The number of newly-built and reconstructed quay berths reached 467 over the year, with 312 million tons of added operating capacity. Furthermore, the proportion of large-sized and specialized quay berth increased continually. By the end of 2010, China had 1,661 quay berths with at least 10,000-tonnage capacity, increasing by 627 compared with that of 5 years ago. There were 903 specialized berths with at least 10,000-tonnage capacity, increasing by 314 compared with that of 5 years ago. A number of large-scale and specialized quays for crude oil, iron ore, coal, con-tainer, grain and vehicle roll-on were also successively constructed.
In 2010, 22 ports among some 200 ports in China, including 16 coastal ports and 6 inland ports, had cargo throughput exceeding 100 million tons. There were 18 ports, including 14 coastal ports and 4 inland ports, with container throughput over one million TEUs as shown in Tables 3.3 and 3.4 .
3.4.3 Ship
By the end of 2010, China owned 178,400 ships for water transport, which was 28,900 units less than 5 years ago, but the average net load capacity reached 1,011.2 tons,
86.9 88.798.7
106.0117.1
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40
60
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2006 2007 2008 2009 2010
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Fig. 3.3 China’s waterway construction investment and growth for 2006–2010 ( Source : Compiled from the Statistical Bulletin of Highway and Waterway Transportation Industry (2006–2010), pub-lished by the Ministry of Transport of China)
393 Development Status of China’s Logistics Infrastructure
Table 3.3 Ports with cargo throughput over 100 million tons in 2010
Ranking Port
Cargo throughput (100 million tons)
Coastal port Ranking Port
Cargo throughput (100 million tons)
Coastal port
1 Ningbo-Zhoushan
6.33 Y 12 Shenzhen 2.21 Y
2 Shanghai 5.63 Y 13 Nantong 1.51 N 3 Tianjin 4.13 Y 14 Yantai 1.50 Y 4 Guangzhou 4.11 Y 15 Nanjing 1.47 N 5 Qingdao 3.50 Y 16 Huzhou 1.44 N 6 Suzhou 3.20 N 17 Zhanjiang 1.36 Y 7 Dalian 3.14 Y 18 Lianyungang 1.27 Y 8 Qinhuangdao 2.63 Y 19 Xiamen 1.27 Y 9 Tangshan 2.46 Y 20 Jiangyin 1.25 N 10 Rizhao 2.26 Y 21 Beibu Gulf 1.19 Y 11 Yingkou 2.26 Y 22 Zhenjiang 1.06 N
Source : Compiled from the Statistical Bulletin of Highway and Waterway Transportation Industry (2010), published by the Ministry of Transport of China
Table 3.4 Ports with container throughput over one million TEUs in 2010
Ranking Port
Container throughput (million TEUs) Ranking Port
Container throughput (million TEUs)
1 Shanghai 29.06 10 Suzhou 3.64 2 Shenzhen 22.51 11 Yingkou 3.34 3 Ningbo-Zhoushan 13.15 12 Foshan 3.06 4 Guangzhou 12.55 13 Yantai 1.54 5 Qingdao 12.01 14 Fuzhou 1.47 6 Tianjin 10.09 15 Nanjing 1.45 7 Xiamen 5.82 16 Quanzhou 1.37 8 Dalian 5.26 17 Rizhao 1.06 9 Lianyungang 3.87 18 Jiangyin 1.01
Source : Compiled from the Statistical Bulletin of Highway and Waterway Transportation Industry (2010), published by the Ministry of Transport of China
increasing by 620.2 tons compared with that of 5 years ago. This shows that the size of China’s ships has grown considerably larger. Among all ships, there were 2,213 ocean transport ships with an average load capacity of 254 million tons/ship, 10,473 coastal transport ships with an average load capacity of 47.5 million tons/ship and 165,700 domestic transport ships.
40 X.-m. Jiang
3.5 Airport
As a number of airports in the Western region were put into service, China’s aviation service network coverage continued to expand in 2010. The cargo throughput at airports in the Eastern region accounted for nearly 80% of the total cargo throughput. The scale of transport fl eets also grew enormously.
3.5.1 Airport and Airline Network
In 2010, China’s investment in civil aviation infrastructure totaled 64.7 billion RMB, with an increase of 8.7% compared with the previous year. Nine airports were newly built, upping the total number of airports to 175. Aviation service cov-ered 76% of the population and 70% of the county-level administrative units. Table 3.5 shows the number of airports in each area of China in 2010.
From 2006 to 2010, the newly-built airports were mainly located in the Western region. During these 5 years, 33 airports were successively constructed, including 21 in the West, which accounts for 63.6% of the nation’s total newly-built airports.
By the end of 2010, China had 1,578 regularly scheduled domestic fl ights, link-ing 172 cities; it also had 302 regularly scheduled international fl ights reaching 54 nations and 110 cities.
3.5.2 Air Cargo Throughput
In 2010, China’s airports achieved a cargo throughput of 11.29 million tons. Figure 3.4 shows the proportion of cargo throughput of each region. There are 47 airports with yearly cargo throughput over 10,000 tons, among which the Beijing Capital Airport, the Shanghai Pudong Airport and the Guangzhou Baiyun Airport are the three major cargo hub airports. In 2010, cargo transport capacity of these three major airports accounted for 56.7% of China’s air transport volume.
Table 3.5 Number of airports in each area of China in 2010
Area Number Proportion (%)
Eastern 45 26 Central 25 14 Western 86 49 Northeastern 19 11 Total 175 100
Source : Compiled from the Statistical Bulletin of Development of Civil Aviation (2010) , published by the Civil Aviation Administration of China
413 Development Status of China’s Logistics Infrastructure
3.5.3 Transport Fleet
In 2010, the number of China’s aircraft for civil aviation increased substantially, and the number of aircraft registered for the airlines industry reached 1,597, increasing by 180 compared with that of the previous year. The number of cargo aircraft exceeded 60. The majority of aircraft is of advanced model with low age of service and good performance economy.
3.6 Warehousing Facility and Logistics Park (Center)
In recent years, automated warehouse, standard warehouse (distribution center) and specialized warehouse (distribution center) have developed rapidly in China. Bonded logistics center and bonded port grew rapidly after the international fi nancial crisis and some of these were established in inland locations. Logistics parks and centers expanded gradually towards the small- and medium-sized cities, and the number of specialized logistics parks and centers also grew gradually.
3.6.1 Warehouse and Distribution Center
Along with the swift development of China’s economy, the demand for warehous-ing facilities rose accordingly. Meanwhile business enterprises began to place higher requirements on the operational quality and the degree of specialization of warehousing facilities. These factors propelled a rapid development of China’s automated warehouse, standard warehouse (distribution center) and specialized warehouse (distribution center) in recent years.
By 2010, China has constructed about 200 automated vertical warehouses, with an average number of 10,000 storage slots and a height of about 20 m. They are gen-erally used in industries such as tobacco, medicine, and machinery manufacturing.
West, 13%
CentralRegion, 4%
Northeast, 4%
East, 79%
Fig. 3.4 Proportion of cargo throughput in each region in 2010 ( Source : Compiled from the Statistical Bulletin of Development of Civil Aviation (2010), published by the Civil Aviation Administration of China)
42 X.-m. Jiang
From 2006 to 2010, the total cumulative area of China’s newly-built standard warehouse facilities was over 100 million square meters. Investors were mostly foreign-funded and joint-ventured logistics real estate agents such as ProLogis, Goodman Group, AMB, and Mapletree.
Driven by the market demand and the government’s guidance and support, spe-cialized warehouses and distribution centers also developed rapidly; many refriger-ated warehouses, tobacco distribution centers and medicine distribution centers were built and put into service during 2006–2010. For example, the Ministry of Commerce chose the agricultural product cold chain logistics system as one of the key projects to support since 2005. By 2010, it had supported 378 cold chain construction projects for agricultural product wholesale markets and farmer’s markets, with newly added refrigerated storage capacity of 2.29 million tons. The Tobacco industry is one of the industries that adopted modern logistics concepts and vigorously build specialized distribution centers in China. By 2010, the tobacco industry’s distribution system had 356 specialized distribution centers nationwide. Also, under substantial government support, a number of medicine distribution centers with high degree of automation and specialization were built during 2006–2010.
3.6.2 Bonded Logistics Center and Bonded Port
To cope with the international fi nancial crisis and encourage the transfer of manu-facturing trade to the Central and Western regions, the Government purposely accel-erated the approval of bonded logistics centers and bonded ports after 2008. The General Administration of Customs approved 17 bonded logistics centers and eight bonded ports in 2008, among which fi ve bonded logistics centers and two bonded ports are located in the Central and Western regions. Another seven bonded logistics centers and one bonded port were built in 2009, among which one bonded logistics center is located in the Western region. In 2010, one bonded logistics center and one bonded port were respectively approved and built.
By 2010, China possessed 28 bonded logistics centers and 14 bonded ports. Figure 3.5 shows the number of China’s bonded logistics center and bonded port for 2006–2010.
2 3
20
27 28
3 4
12 13 14
0
5
10
15
20
25
30
2006 2007 2008 2009 2010
Qua
ntity
(uni
t)Bonded logistics center Bonded park
Fig. 3.5 China’s bonded logistics centers and bonded ports for 2006–2010
433 Development Status of China’s Logistics Infrastructure
3.6.3 Logistics Park and Logistics Center
The construction of China’s logistics parks and logistics centers in 2010 features a gradual expansion towards the small- and medium-sized cities, and an obvious increase in the number of planned and completed specialized logistics parks and centers. Logistics parks constructed in small and medium-sized cities are mainly integrated parks. For example, construction of the fi rst integrated logistics park in Wenzhou, Zhejiang (an economically developed province in the Eastern region) was of fi cially started in October 2010. The park is planned to be a modernized integrated logistics park which incorporates cargo storage, commercial logistics, multimodal transport, headquarters for logistics enterprises, urban and rural distribution, logistics fi nance, warehousing service, information service and international logistics service, etc. In November 2010, the fi rst phase of Changxing Integrated Logistics Park was built in Huzhou, which is another city in Zhejiang province. This logistics park is de fi ned as a regional “multimodal transport” public logistics platform in the northern part of Zhejiang province.
Specialized logistics parks and logistics centers are mainly built for two types of industries: agricultural products and medicine. In the Eastern region, an agricultural and auxiliary products logistics park was built in Tianjin. Another one is the fi rst fruit and vegetable logistics park built in Heilongjiang of the Northeastern region, for the main purpose of serving Russia. The construction of a grain logistics park in Anhui Province of the Central region and an agricultural product logistics park in Guizhou Province of the Western region were started. As for the construction of medicine logistics centers, according to the statistics of China Association for Pharmaceuticals and Medical Devices Technology Exchange, in 2010, at least ten pharmaceutical companies have begun constructing modernized medicine logistics centers.
3.7 Logistics Information Facility
In recent years, with the vigorous promotion by the governments of various levels, China has realized signi fi cant achievements in the construction of port information platform and public information platform in the transport fi eld. Meanwhile, the informatization level of enterprises has also been gradually improved.
3.7.1 Public Logistics Information Platform
The port information platform is an e-government system which is led by the General Administration of Customs and jointly constructed by 12 governmental departments. The construction was started at the end of the twentieth century.
44 X.-m. Jiang
By 2010, it has almost completed the nationwide network coverage with the number of accessing enterprises reaching 480,000. Functions of the platform expanded from simple e-government affairs to logistics and e-commerce; its function of logistics and e-commerce services was improved substantially, effectively supporting the development of Customs clearance and international trade.
As for public information platform in the transport fi eld, Zhejiang Province is a typical representative in the construction of public transport information platform. Zhejiang started a study on the platform in 2003, and initiated a construction proj-ect in 2007. By 2010, this platform has built up eight public logistics application centers concerning truck and cargo transaction, industry information, and cargo tracking; it has connected information systems such as e-port and Port of Ningbo, and realized the networking of all enterprises involving small package express delivery and hazardous cargo transport. There were over 3,000 users and a daily information volume of 19,000 postings. The public information platform system of Zhejiang Province also became a national pilot demonstration project, and the Ministry of Transport has promoted its adoption to the transport industries in 16 provinces and cities.
3.7.2 Informatization of Enterprise Logistics
Large-sized industrial and commercial enterprises as well as logistics enterprises are leaders of China’s enterprise logistics informatization. These enterprises include some large-sized industrial and commercial enterprises in the fi elds of communication, tobacco and medicine, as well as some specialized logistics enterprises involving marine transport, railway, air service, postal service and third-party logistics. These enterprises have made progress through independent R&D and cooperation with spe-cialized software enterprises to develop logistics software as well as introduction of advanced information technologies and facilities. By so doing, they have realized the integration and optimization of business process and management process, set up industry benchmark and played a leading role for small- and medium-sized enter-prises. On the whole, China’s enterprise logistics informatization level is still rela-tively low. Although some large- and medium-sized logistics enterprises have in general realized individual informatization application in their operations and man-agement, and most of manufacturing enterprises above the designated size and com-mercial enterprises have implemented informatization of their logistics linkages, the majority of enterprises still remain in the rudimentary informatization stage of ERP and network portals; few enterprises have achieved system integration and coordi-nated management. Logistics technologies such as barcode, GPS, GIS are widely used while the usage of RFID and RF is relatively rare.
This chapter presents China’s logistics infrastructure development in 2010 and provides a nutshell summary for the period 2006–2010. The discussion covers six aspects including investment in logistics infrastructure, railway, highway, waterway,
453 Development Status of China’s Logistics Infrastructure
airport, warehousing facility, logistics center (park), and logistics information facility. All in all, investment in logistics infrastructure in 2010 is the highest over the years, especially in transport infrastructure. Supported by the massive invest-ment, China’s transport infrastructures such as railway, highway, waterway and air-port have been improved notably both in scale and in technical level. Continual optimization of the network structure provides strong support for China’s increasing logistics market. Meanwhile, China also made great stride in building specialized warehousing facilities, bonded logistics centers, specialized logistics centers, and public logistics information platforms. Consequently, the scale of China’s logistics infrastructure has been expanded and the quality of its logistics facility has also been improved noticeably.
47B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_4, © Springer-Verlag Berlin Heidelberg 2013
This chapter describes the logistics development in certain selected key regions of China for the purpose of helping the readers gain a deeper and broader understanding towards the country’s latest logistics development. In the fi rst volume of this series, Contemporary Logistics in China: An Introduction , an overview of the regional differences in China’s logistics development was given. Also, characteristics of logistics development in the East, Central and West regions were analyzed respec-tively in detail. Regional economic development and logistics development of the Yangtze River Delta, Pearl River Delta, Bohai Rim Region, Hong Kong as well as Taiwan were discussed in particular. The contents in the fi rst volume of the series not only covers several hot issues in China’s regional economic development but also points out some key problems in logistics research.
To extend the scope of regional logistics development in the fi rst volume, this chapter places more emphasis on introducing the logistics development of certain districts in the Central, Western and Northeast regions. In particular, the logistics development characteristics of Chengdu-Chongqing Economic Region, Xinjiang Uygur Autonomous Region (hereinafter referred to as Xinjiang), the Zhongyuan City Cluster, and the Northeast Region are discussed.
P. Chen (*) • Y. Liu Department of Logistics Management, Nankai University, No. 23 Hongda Street, Economic-Technological Development Area , Tianjin 300457, P.R. China e-mail: [email protected]; [email protected]
J. Liu Logistics Research Center, Nankai University No. 94 Weijin Rd., Nankai District, Tianjin 300071 , P.R. China e-mail: [email protected]
R. Wei College of Economy and Management, Civil Aviation University of China, No. 2898 Jinbei Rd., Dongli District , Tianjin 300300 , P.R. China e-mail: [email protected]
Chapter 4 China’s Logistics Development in Certain Key Regions
Ping Chen , Jun Liu , Ran Wei , and Yong Liu
P. Chen, J. Liu, R. Wei, and Y. Liu are co-fi rst authors, each contributing one Section of the Chapter.
48 P. Chen et al.
In 2011, the State has concertedly formulated the nation’s development plan for key economic regions at the height of national strategic level. The plan aimed to ascer-tain the functional orientation and overall direction of those speci fi c economic regions by organically incorporating the national strategic intents and the concrete local needs. Thus a development pattern, which gives varied priority to Northeast China, East China, Central China and West China, has been created. Among these economic regions, the Chengdu-Chongqing Economic Region, one known for its solid overall strength, has been designated as a signi fi cant future economic center of West China by the State. Xinjiang is considered as a gateway for China in its opening-up towards the West. The unique geographical location and abundance of natural resources have fur-ther solidi fi ed Xinjiang’s standing in China’s international logistics system.
As an integrated transportation hub linking East China with West China and South China with North China, Zhongyuan City Cluster is developing itself into a crucial grain production base, energy material base, modern equipment manufactur-ing base, as well as hi-tech industrial base. Therefore, the Chengdu-Chongqing Economic Region, Xinjiang and the Zhongyuan City Cluster is selected as high-lights of the logistics development in Central and West China. Moreover, the Northeast region, endowed with rich natural resources in agricultural products and coal mines, established foundation in heavy industries and manufacturing capabili-ties, is gaining momentum as a contributor to the nation’s economic advancement.
In this chapter attentions are given to the afore-mentioned regions according to their logistics market, logistics infrastructure, logistics enterprise development, port logistics, industrial logistics, as well as interaction between logistics and manufac-turing. Readers will fi nd the coverage of these regions both unique on their own and complementary to the regional discussions in the fi rst volume. Figure 4.1 depictsthe geographical locations of these regions on the map of China.
4.1 Development Status of Logistics in the Chengdu-Chongqing Economic Zone
The Chengdu-Chongqing Economic Zone is an important agglomeration of population, cities and towns and industries in China. Through the development and construction since the Reform and Opening-up, especially the Westward development, this zone has become one with the most solid aggregate strength among all regions in western China. In recent years, the economy in Chengdu-Chongqing Economic Zone has undergone rapid development, which in turn also propelled the development of logistics industry in this zone. In May 2011, the Regional Plan of Chengdu-Chongqing Economic Zone was of fi cially approved by the State Council and thus created a major historical opportunity for the development of this zone.
This section includes three main parts. The fi rst part presents in retrospect the economic development of Chengdu-Chongqing Economic Zone, in terms of regional GDP, industrial development, retailing of consumer products and import and export trading. The second part elaborates on the characteristics of the logistics develop-ment in this economic zone, with respect to scale of logistics market, comprehensive transport system, logistics park and logistics center, logistics informationization
494 China’s Logistics Development in Certain Key Regions
level, logistics enterprise, and preferential policies for logistics development. And the third part addresses the development of logistics for some distinctive industries in Chengdu-Chongqing Economic Zone such as the automobile and motorcycle logistics, electronics logistics and bonded logistics.
4.1.1 Economic Development Conditions in the Chengdu-Chongqing Economic Zone
The Chengdu-Chongqing Economic Zone centers on Chongqing and Chengdu, and comprises 31 districts and counties of Chongqing Municipality and 15 cities of Sichuan Province, 1 covering an area of 206,000 km 2 and with a population of 98.4
Fig. 4.1 Geographica l locations of the key regions presented in this chapter
1 Chengdu-Chongqing Economic Zone comprises 31 districts and counties of Chongqing Municipality (Wanzhou, Fuling, Yuzhong, Dadukou, Jiangbei, Shapingba, Jiulongpo, Nan’an, Beibei, Wansheng, Yubei, Banan, Changshou, Jiangjin, Hechuan, Yongchuan, Nanchuan, Shuangqiao, Qijiang, Tongnan, Tongliang, Dazu, Rongchang, Bishan, Liangping, Fengdu, Dianjiang, Zhongxian County, Kaixian County, Yunyang and Shizhu) and 15 cities of Sichuan Province (Chengdu, Deyang, Mianyang, Meishan, Ziyang, Suining, Leshan, Ya’an, Zigong, Luzhou, Neijiang, Nanchong, Yibin, Dazhou and Guang’an).
The 31 Chongqing districts and counties included in the Chengdu-Chongqing Economic Zone account for 74% of total Chongqing area and 95% of Chongqing economic aggregate, so in view of the availability of comparable statistics, the overall data of Chongqing is cited in this section instead of the data of these 31 districts and counties.
50 P. Chen et al.
million, as shown in Fig. 4.2 . From 2006 to 2010, the Chengdu-Chongqing Economic Zone underwent a rapid economic growth and a substantial increase of industrial level, and has become a region with the highest level of economic development in western China.
4.1.1.1 Total Economic Value of the Region
From 2006 to 2010, regional GDP of Chengdu-Chongqing Economic Zone increased from 1,113.8 billion RMB to 2,317.1 billion RMB. The increase by 1,203.3 billion RMB, equaling an annual average rate of 19.2%, is 2.1 per-centage points higher than the national average. In 2010, the regional GDP of 2,317.1 billion RMB accounted for 5.7% of national GDP. Figure 4.3 shows the annual data.
As two pivotal cities of the Chengdu-Chongqing Economic Zone, the sum of regional GDPs of Chongqing and Chengdu accounts for more than half of the GDP of the entire zone. In 2010, the growth rates of regional GDPs of Chongqing and
Fig. 4.2 Regional plan of Chengdu-Chongqing Economic Zone ( Source : Graph prepared by the Modern Logistics Research Center, Nankai University, Tianjin, China)
514 China’s Logistics Development in Certain Key Regions
Chengdu were respectively 20.9% and 23.3%, 2 which are higher than the national average of 17.8%. Table 4.1 shows the GDP data for 2006–2010.
4.1.1.2 Conditions of Industrial Development
Presently, the Chengdu-Chongqing Economic Zone has formed an industrial system centering around industries in equipment manufacturing, automobile and motorcy-cle, electronic information, biological medicine, energy chemical industry, metallurgy
1348
2317.1
1913.3
1620.4
1113.8
18.120.221.0
15.6
21.1
13.2
20.5
18.3
15.2
18.1
0
500
1000
1500
2000
2500
2006 2007 2008 2009 20100
5
10
15
20
25
Reg
iona
l GD
P (
Bill
ion
RM
B)
Nom
inal
Gro
wth
Rat
e (%
)
Region GDP Chengdu-Chongqing Economic Zone Nationwide
year
Fig. 4.3 Regional GDP and nominal growth rate of Chengdu-Chongqing Economic Zone for 2006–2010 ( Source : Compiled from the China Statistical Yearbook (2006–2011), Sichuan Statistical Yearbook (2006–2010), Chongqing Statistical Yearbook (2006–2010) and related data in the China Statistical Bulletin of National Economic and Social Development (2010) of all Cities in Chengdu-Chongqing Economic Zone )
2 Unless otherwise stated, computation of growth rates of regional GDP, regional industrial added value, total volume of import and export trade and total retail sales of social consumption goods are nominal rates without considering price changes.
Table 4.1 Regional GDPs of Chongqing and Chengdu for 2006–2010
Year
Chongqing Chengdu
Total value (billion RMB)
Nominal growth rate (%)
The proportion in Chengdu-Chongqing Economic Zone (%)
Total value (billion RMB)
Nominal growth rate (%)
The proportion in Chengdu-Chongqing Economic Zone (%)
2006 349.2 13.7 31.3 275.0 16.0 24.7 2007 412.3 18.1 30.6 332.4 20.9 24.7 2008 509.7 23.6 31.5 390.1 17.4 24.1 2009 653.0 28.1 34.1 450.3 15.4 23.5 2010 789.4 20.9 34.7 555.1 23.3 24.0
Source : Compiled from the Sichuan Statistical Yearbook (2006–2010), Chongqing Statistical Yearbook (2006–2010) and related data in the China Statistical Bulletin of National Economic and Social Development (2010) of all Cities in Chengdu-Chongqing Economic Zone
52 P. Chen et al.
and building materials, textile, and food; it has become an important logistics, trade and fi nance center in western China and a renowned nationwide tourism destination. Chongqing is an important automobile and motorcycle production base for China; in 2010 its automobile and motorcycle output amounted to 278.2 billion RMB, which equals to 20.6% of the city’s total industrial output value of fi rms above the designated size. Equipment manufacturing plays an obviously elevated role in sup-porting Chongqing’s industrial economy; its equipment manufacturing achieved a total industrial output value of 165.6 billion RMB in 2010, which accounts for 20.6% of the city’s total industrial output value for fi rms above the designated size. This proportion is upped by 45.3% from that in 2009.
The high-tech industries evolved distinctly in Chengdu, where the three leading industries in electronic information, bio-tech medicine and precision machinery manu-facturing took shape. By the end of 2009, more than 13,000 enterprises congregated in the Chengdu High-tech Zone, including 863 foreign-invested enterprises and more than 600 software enterprises; many renowned international companies, like Intel, Foxconn, Symantec, SAP, and Siemens had settled in the Chengdu High-tech Zone.
From 2006 to 2009, industrial added value of the Chengdu-Chongqing Economic Zone has doubled and the average annual growth rate reached 26.4%, as shown in Fig. 4.4 . In 2010, added value of industrial fi rms above the designated size 3 in Chongqing was 268.3 billion RMB, increased by 23.7% from that in 2009. The growth rate is 8 percentage points higher than the national average and ranks fi rst nationwide. The added value of industrial fi rms above the designated size in Chengdu was 164.0 billion RMB and increased by 23.6% over the previous year.
4.1.1.3 Retailing of Consumer Goods
The consumption of consumer goods has been edging up in the Chengdu-Chongqing Economic Zone from 2006 to 2010; the 5-year average growth rate of total retail sales of consumer goods reached a level of 18.7%. In 2010, total retail sales of con-sumer goods in this zone were up to 881 billion RMB and accounted for about 5.6% of the national total. Total retail sales of consumer goods in Chongqing and Chengdu were 287.80 billion RMB and 241.76 billion RMB, respectively with annual growth rates of 16.1% and 18.1% respectively. Together their total consumption accounts for about 60% of the entire economic zone, as shown in Table 4.2 .
4.1.1.4 Import and Export Trade
The Chengdu-Chongqing Economic Zone traditionally exhibits a low degree of dependency on foreign trade. In 2009, the total volume of import and export in this
3 According to the provisions of National Bureau of Statistics, for years from 2007 to 2010, indus-trial fi rms above the designated size comprise of corporate industrial enterprises with an annual main operating revenue of fi ve million RMB and up.
534 China’s Logistics Development in Certain Key Regions
zone was only 31.5 billion USD and the degree of dependency on foreign trade was 11.2%, a much lower fi gure than the national average of 44.2%. In 2009, the value of import and export of Chongqing and Chengdu accounted for more than 80% of the total volume of import and export in the Chengdu-Chongqing Economic Zone, see Table 4.3 for details. The total annual imports and exports of Chongqing reached 12.4 billion USD and this represents an increase of 61.1% from that in 2008; of the total, export value of general trade accounted for 5.9 billion USD, increased by 60.9%; export value of mechanical and electrical products was fi ve billion USD, up by 70.5%; and export value for high-tech products amounted to 0.8 billion USD, rose by 348.6%. The total annual imports and exports of Chengdu reached 24.7 billion USD, which represents an increase of 38.1% from that in 2008; of the total, export
406.6
521.3
664.3
821.227.4
24.1
28.2
23.6
0
100
200
300
400
500
600
Indu
stria
l add
ed v
alue
(B
illi R
MB
)
Nom
inal
Gro
wth
Rat
e (%
)
Year
700
800
900
1000
2006 2007 2008 20090
5
10
15
20
25
30
Fig. 4.4 Industrial added value and growth rate of Chengdu-Chongqing Economic Zone for 2006–2009 ( Source : Compiled from related data in the Sichuan Statistical Yearbook (2006–2010) and Chongqing Statistical Yearbook (2006–2010))
Table 4.2 Total retail sales of consumer goods and growth rate in Chengdu-Chongqing Economic Zone for 2006–2010
Year
Chengdu-Chongqing Economic Zone Chongqing Chengdu
Total (billion RMB)
Nominal growth rate (%)
Total (billion RMB)
Nominal growth rate (%)
Proportion in the entire zone (%)
Total (billion RMB)
Nominal growth rate (%)
Proportion in the entire zone (%)
2006 431.6 15.2 140.4 15.4 32.5 115.5 14.9 26.8 2007 508.4 17.8 166.1 18.4 32.7 135.7 17.5 26.7 2008 613.2 20.6 206.4 24.3 33.7 162.2 19.5 26.5 2009 761.3 24.2 247.9 20.1 32.6 204.7 26.2 26.9 2010 881.1 15.7 287.8 16.1 32.7 241.8 18.1 27.4
Source : Compiled from the Sichuan Statistical Yearbook (2006–2010), Chongqing Statistical Yearbook (2006–2010) and related data in the China Statistical Bulletin of National Economic and Social Development (2010) of all Cities in Chengdu-Chongqing Economic Zone
54 P. Chen et al.
value of general trade was 6.54 billion USD, increased by 29.2%; export values of mechanical and electrical products reached seven billion USD, increased by 12.6%; and export value of high-tech products hit 3.4 billion USD, increased by 6.1%.
4.1.2 Main Characteristics of Logistics Development in the Chengdu-Chongqing Economic Zone
Logistics development in the Chengdu-Chongqing Economic Zone exhibits several main characteristics due to the zone’s advantages in geographical position, being a comprehensive transport hub, rapid development of its regional economy, and the government’s policy support. These characteristics are discussed below in terms of expansion of logistics market scale, comprehensive transport system, construction of logistics park and logistics center, upgrade in logistics informationization level, development of logistics enterprise, and assurance of preferential policies for logis-tics development.
4.1.2.1 Expansion of the Scale of Logistics Market
From 2006 to 2010, the transportation, storage and postal service in Chongqing and Chengdu exhibited a steady growth. For example, the average annual average growth rate of added value of transportation, storage and postal service in Chongqing was 10.7% from 2006 to 2010. The added value of transportation, storage and postal service in Chongqing and Chengdu for 2006–2010 is presented in Table 4.4 .
The main freight transport modes in the Chengdu-Chongqing Economic Zone are highway transportation and railway transportation, as in 2009, the volume of freight via highway and railway for Chongqing and for Chengdu accounted for
Table 4.3 Total volume of import and export in the Chengdu-Chongqing Economic Zone for 2006–2010
Year
Chengdu-Chongqing Economic Zone (billion RMB)
Chongqing Chengdu
Other regions (billion RMB)
Total (billion RMB)
Growth rate (%)
Total (billion RMB)
Growth rate (%)
2006 – 5.5 27.5 6.9 53.3 – 2007 – 7.5 37.0 9.5 37.0 – 2008 31.0 9.5 27.8 15.5 62.6 6.0 2009 31.5 7.7 −19.0 17.9 15.4 5.9 2010 44.8 12.4 61.2 24.7 38.1 7.7
Source : Compiled from the Statistical Yearbook (2006–2011) of Chongqing, the Statistical Yearbook (2009–2011) of Sichuan, and the Statistical Bulletin of National Economic and Social Development (2005–2007) of Chengdu
554 China’s Logistics Development in Certain Key Regions
88.7% and 99.9% of respective area’s total volume of freight. Besides, inland water transportation is a unique feature of Chongqing’s freight transport. The pro-portion of Chongqing’s throughput volume of freight transport via waterway in the total volume of freight transport grew yearly from 45.51% in 2006 to 77.71% in 2009. Both the average annual growth rate of waterway freight volume and that of throughput volume of freight transport reached approximately 20%. The freight volume and throughput volume of freight transport of Chongqing and Chengdu from 2006 to 2009 are respectively shown in Tables 4.5 and 4.6 .
The Chengdu-Chongqing Economic Zone possesses several inland ports, namely Chongqing Port, Yibin Port, Luzhou Port, and Leshan Port. Chongqing Port is the largest one along the main waterway in the upper part of the Yangtze River and also the most important hub port in this zone. From 2006 to 2010, the cargo handling capacity of Chongqing Port increased from 55.74 to 96.68 million tons and the aver-age annual growth rate was 13.9%, as shown in Fig. 4.5 . In 2010, Yibin Port was opened and put into trial operation. In the same year, phase II of Luzhou Port was completed and put into operation; cargo throughput reached 17.7 million tons which was an increase of 52.2% from that in the previous year; container throughput reached 70,000 TEUs which was 16.6% higher than that in the previous year.
In 2010, the take-off and landing of aircraft in civil airports in the Chengdu-Chongqing Economic Zone reached 589,000 times and was increased by 59.4% from the previous year; cargo throughput reached 639 kilotons and was increased by 12.4%, as shown in Fig. 4.6 . The regional distribution of cargo throughput shows that Chengdu Shuangliu Airport and Chongqing Jiangbei Airport undertake most goods transported by air in the Chengdu-Chongqing Economic Zone and each respectively accounts for 67.7% and 30.6% of the total in 2010. The two airports respectively rank sixth and tenth in terms of China’s airport throughput for 2010.
4.1.2.2 Comprehensive Transport System
The comprehensive transport system of the Chengdu-Chongqing Economic Zone is relatively developed in comparison with that in other areas of the country. Chongqing Port is the largest inland port in the upper section of the Yangtze River; more than
Table 4.4 Added value of transportation, storage and postal service in Chongqing and Chengdu for 2006–2010
Region
Added value of transportation, storage and postal service (billion RMB)
2006 2007 2008 2009 2010
Chongqing 25.96 26.57 30.96 34.80 38.96 Chengdu 13.89 15.64 18.59 21.17 26.04 Total 39.85 42.21 49.55 55.97 65.00
Source : Compiled from the Statistical Yearbook (2007–2010) of Chongqing, the Statistical Yearbook (2007–2010) of Chengdu , and the Statistical Bulletin of National Economic and Social Development (2010) of Chongqing
56 P. Chen et al.
Tabl
e 4.
5 Fr
eigh
t vol
ume
of C
hong
qing
and
Che
ngdu
for
200
6–20
09
(Uni
t: m
illio
n to
ns)
Cho
ngqi
ng
Che
ngdu
Yea
r To
tal
Rai
lway
C
ivil
avia
tion
Wat
erw
ay
Hig
hway
Y
ear
Tota
l R
ailw
ay
Civ
il av
iatio
n W
ater
way
H
ighw
ay
2006
42
8.08
20
.00
0.03
45
.51
362.
54
2006
28
1.43
14
0.07
0.
20
0.42
14
0.74
2007
49
9.70
20
.51
0.04
59
.04
420.
11
2007
30
0.26
14
6.94
0.
22
0.15
15
2.95
2008
63
6.51
20
.86
0.05
69
.71
545.
89
2008
35
4.56
14
0.99
0.
17
– 21
3.40
2009
68
4.91
21
.82
0.06
77
.71
585.
32
2009
39
5.01
14
1.16
–
– 25
3.85
Sour
ce : C
ompi
led
from
the
Stat
isti
cal Y
earb
ook
(200
7–20
10)
of C
hong
qing
and
the
Stat
isti
cal Y
earb
ook
(200
7–20
10)
of C
heng
du
574 China’s Logistics Development in Certain Key Regions
Tabl
e 4.
6 T
hrou
ghpu
t vol
ume
of f
reig
ht tr
ansp
ort o
f C
hong
qing
and
Che
ngdu
for
200
6–20
09
(Uni
t: bi
llion
ton-
km)
Yea
r
Cho
ngqi
ng
Yea
r
Che
ngdu
Tota
l R
ailw
ay
Civ
il av
iatio
n W
ater
way
H
ighw
ay
Tota
l R
ailw
ay
Civ
il av
iatio
n W
ater
way
H
ighw
ay
2006
82
.14
11.5
2 0.
04
53.3
2 17
.26
2006
12
0.51
11
4.40
0.
43
– 5.
68
2007
10
4.99
14
.40
0.06
69
.99
20.5
4 20
07
132.
56
125.
50
0.52
–
6.54
2008
14
8.65
16
.70
0.07
86
.56
45.3
2 20
08
139.
44
128.
70
0.62
–
10.1
2
2009
16
4.43
17
.18
0.08
96
.84
50.3
3 20
09
152.
72
137.
41
0.68
–
14.6
3
Sour
ce :
Com
pile
d fr
om t
he S
tati
stic
al Y
earb
ook
(200
7–20
10)
of C
hong
qing
, th
e St
atis
tica
l Yea
rboo
k (2
007–
2009
) of
Che
ngdu
, an
d th
e St
atis
tica
l B
ulle
tin
of N
atio
nal E
cono
mic
and
Soc
ial D
evel
opm
ent (
2009
) of
Che
ngdu
58 P. Chen et al.
90% of the local goods and materials for foreign trade are transported by waterway. Compared with other modes of transportation, shipping by way of Yangtze River has obvious economic advantage. Generally, industries located in the upper section of the Yangtze River rely on the Yangtze River golden waterway; nearly 90% of
64.3455.74
78.9386.12
96.6822.7
6.5
18.7
9.1
12.3
0
20
40
60
80
Thr
ough
put (
Mill
ion
Ton
s)
Gro
wth
Rat
e (%
)
100
120
2006 2007 2008 2009 2010Year
0
5
10
15
20
25
Fig. 4.5 Cargo throughput and growth rate of Chongqing port for 2006–2010 ( Source : Compiled from the Statistical Bulletin of National Economic and Social Development (2006–2010) of Chongqing )
476421
541568
63913.7
18.2
13.0
5.0
12.4
0
100
200
300
400
500
600
Car
go T
hrou
ghpu
t (M
illio
n T
ons)
Gro
wth
Rat
e (%
)700
800
900
2006 2007 2008 2009 20100
5
10
15
20
Fig. 4.6 Cargo throughput of civil airports in the Chengdu-Chongqing Economic Zone for 2006–2010 ( Source : Compiled from the Statistical Bulletin of Nationwide Airports (2006–2010) , published by the Civil Aviation Administration of China)
594 China’s Logistics Development in Certain Key Regions
Chongqing’s enterprises in metallurgy, machinery, electricity, automobile and motorcycle bunch up along the port-centered industrial belt. From 2002 to 2010, Chongqing invested cumulatively 15 billion RMB in waterway transport infrastruc-ture, and it has become the unique region possessing a level-I water channel, 5-kilo-ton deepwater berth, category-I port for water transportation and bonded port area in upper Yangtze River. Moreover, Chongqing also opened the fi rst domestic direct route for river-to-sea combined container transport.
By the end of 2009, the length of highways opened to traf fi c in the Chengdu-Chongqing Economic Zone reached 277,000 km with a highway network density of 1.3 km/km 2 . From 2006 to 2010, the expressway mileage in Chongqing increased from 778 to 1,861 km, increased by 139%. In this zone, an expressway network, centering on Chongqing and Chengdu, radiating from the Chengdu-Chongqing Ring Expressway, extending outward via ten major external high-speed channels has been formed. In addition, by the end of 2009, the total length of railways in operation in the Chongqing Municipality and Sichuan Province reached 4,575.6 km and increased by 6.5% compared with that in 2008; this railway mileage accounted for 5.35% of the national total. Multiple railway trunk lines converge in the Chengdu-Chongqing Economic Zone and form fi ve main external railway pas-sages. Three of these are access channels to sea – eastward to Shanghai to connect the Yangtze River Delta, southeastward to Shenzhen and Hong Kong to connect the Pearl River Delta, and southward to Guangxi to connect the Beibu Gulf. Two of these are artery land exit channels, viz. Zhengzhou-Chongqing-Kunming Railway to connect Southeast Asia and Lanzhou-Chongqing Railway, to link to Eurasia Land Bridge, respectively.
In 2010, the phase III expansion of Chongqing Jiangbei Airport was completed and went into service, and the operation of two airport terminals and two runways was accomplished simultaneously. In February 2011, the freight depot of Chengdu Shuangliu Airport came into operation and became the largest air cargo terminal in the Midwest. In 2010, Mianyang Airport expanded rapidly with passenger through-put and cargo throughput increased by 105% and 45.4%, respectively. This airport became one of the feeder route airports with the largest throughput, and provides effective supplement to Shuangliu Airport.
4.1.2.3 Construction of Logistics Park and Logistics Center
From 2006 to 2010, regional logistics parks centering on Chongqing and Chengdu were actively built in this zone. And regional logistics base and logistics center were also constructed to meet the need of regional city centers and regional economic development. Besides, in line with the industry characteristics and logistics demand of the areas in this zone, several secondary logistics centers were built to provide logistics service for industrial raw materials, fi nished goods and consumer goods.
Recently, Chongqing has focused the construction on three major hub-like logis-tics parks, namely, Chongqing Cuntan Logistics Park, Chongqing Railway Logistics Park and Chongqing Airport Logistics Park, and eight major regional logistics bases.
60 P. Chen et al.
Placing emphasis on the automobile and motorcycle industries, the agriculture and commercial circulation industries, Chongqing has established the automobile and motorcycle logistics center, the high and new technology industries logistics center, the rural comprehensive logistics distribution center, and the foreign trade logistics center. Sichuan Province has devoted efforts to developing two international hub-like logistics parks, viz. the Chengdu International Air Logistics Park and the Chengdu International Container Logistics Park, and has accelerated the construc-tion of two railway cargo logistics parks and four regional integrated logistics cen-ters. The establishment of logistics parks not only integrates the logistics resources and improves the ef fi ciency of logistics operations, but also attracts a large number of logistics service providers, thus playing an important role in promoting the devel-opment of logistics industry in the Chengdu-Chongqing Economic Zone and improving its regional competitiveness.
4.1.2.4 Upgrade of Logistics Informationization Level
In 2008, Shanghai, Chongqing and Sichuan Province signed the Agreement on a Cooperation Framework of Grand Clearance of Ports in Shanghai, Chongqing and Sichuan and the Agreement on Strategic Cooperation of Electronic Port Information Platform between Shanghai and Chongqing , which hastened the integration of the electronic port resources and information sharing of the three locales and promoted a further deepening of the “Grand Clearance” 4 cooperation. In 2009, the fi rst inland EDI center authorized by the Ministry of Transport came into operation in Chongqing which covered all foreign trade ports in this region. In the same year, Chongqing started to build a public information service platform for regional logistics in the upper section of the Yangtze River. This platform can be linked to the information system of various logistics enterprises, various common logistics platforms within the region, logistics information service platforms in other regions and the national logistics mega-platform to be built later.
In 2008, Chongqing was granted approval to establish the Cuntan Dual-way Bonded Port Area in the Liangjiang New Area, and it became the only inland bonded port area of the “waterport + airport” type. By the end of 2010, the Chongqing Shipping Exchange was formally settled down in Cuntan Dual-way Bonded Port Area, thus providing an integrated information platform for shipping companies, shipping agencies, forwarding agencies, port logistics enterprises and other subjects of the shipping market, as well as fi nance, insurance and other social service orga-nizations in the Chengdu-Chongqing Economic Zone.
4 “Grand Clearance” is the brief name for the project of improving port ef fi ciency. It stipulates that all port-related departments, units and enterprises shall adopt effective methods to make port logistics, document fl ow, capital fl ow and information fl ow operate ef fi ciently and smoothly, so as to simulta-neously achieve the effective supervision and ef fi cient service of the port management departments. The system involves the Customs, foreign trade departments, transportation, storage, maritime affairs, banks, insurance and other legal authorities and commercial organizations of various countries.
614 China’s Logistics Development in Certain Key Regions
4.1.2.5 Development of Logistics Enterprise
Industrial upgrading and transfer has expanded the scale of logistics market demand in the Chengdu-Chongqing region, raised higher requirements for logistics service and promoted the development of professional logistics and professional bases. Under this background, the Chengdu-Chongqing Economic Zone enticed the entry of numerous domestic and foreign logistics enterprises and pushed the advancement of local logis-tics enterprises. Maersk, DHL, Federal Express, APL, UPS and 40 other foreign-funded logistics enterprises have successively settled in the Chengdu-Chongqing Economic Zone. For instance, Maersk has seven global service centers respectively located in Denmark, India, China and the Philippines; its fi rst service center in China was built in Shenzhen and the second one was settled down in Chengdu. In March 2010, Maersk Information Processing (Chengdu) Co., Ltd. and its subordinate Chengdu Customer Service Centre of Damco Company began operation in the High-Tech Area. Besides, domestic logistics enterprises including STO and EMS and other express enterprises also sped up their layout of networks in the Chengdu-Chongqing Economic Zone.
4.1.2.6 Issuance of Preferential Policies for Logistics Development
In 2009, China’s Adjustment and Revitalization Plan for Logistics Industry speci fi ed that the Southwest logistics region should accelerate its pace of reform, further pro-mote the methodology and technology of modern logistics management, speed up the construction of logistics infrastructure, improve regional logistic environment, and bridge the gap between it and the Eastern and Central regions. In September of the same year, the Chongqing Municipal Government’s Opinion on Conscientiously Implementing the Adjustment and Revitalization Plan for Logistics Industry, approved by the Chongqing Municipal Government, stipulated that Chongqing would adopt the international logistics channel strategy, relying on “one river, two wings and three oceans” 5 as the main line to build a multi-level logistics infrastructure network, foster and develop logistics enterprises and promote the readjustment and revitalization of logistics industry in Chongqing. Moreover, it also would establish the State-level comprehensive logistics hub platform, the Western area’s international trade logistics highland, the multimodal transport hub and comprehensive logistics service base. In May 2011, the Regional Plan of Chengdu-Chongqing Economic Zone was of fi cially approved by the State Council and its issuance will lead to a new climax of
5 “One river” is the Yangtze River; “two wings” are “the northwest wing” and “the southwest wing”; and “three oceans” are the Paci fi c Ocean, the Atlantic Ocean and the Indian Ocean. “One river” refers to the access to the Paci fi c Ocean via the Yangtze River; “the northwest wing” refers to the access to the Atlantic Ocean via Kazakhstan – Russia – Belarus – Poland – Germany – Port of Rotterdam by way of Chongqing-Lanzhou Railway leaving the country from Ala Mountain pass in Xinjiang; “the southwest wing” refers to the access to the Indian Ocean and the Middle East via Mandalay (a central city of Myanmar) – Shidui Port by way of Chongqing–Guizhou Railway leaving the country from Guiyang – Kunming – Dali – Ruili.
62 P. Chen et al.
industrial transfer and bring a rare historic opportunity for the adjustment of regional industrial structure and the advancement of modern logistics.
4.1.3 Development of Distinctive Industry’s Logistics in Chengdu-Chongqing Economic Zone
Rapid growth of the automobile and motorcycle, commerce and trade and high-technology industries in the Chengdu-Chongqing Economic Zone has led to the development of logistics with conspicuous industry-speci fi c characteristics in this zone. Therefore, Chongqing Changan Minsheng APLL Logistics Co., Ltd., Chongqing National Container Automobile Logistics Co., Ltd., Chongqing Bestar Bonded Logistics Co., Ltd. and other logistics enterprises featuring distinctive industry characteristics and high degree of specialization have emerged in this zone. This section describes the development of industrial logistics in the Chengdu-Chongqing Economic Zone in three respects, viz. the automobile and motorcycle logistics, the electronics logistics and the bonded logistics.
4.1.3.1 Automobile and Motorcycle Logistics
Chongqing is known as an automobile city and motorcycle capital of China; the volume of motorcycle production and sales has ranked fi rst in China for nine consecutive years. In 2010, Chongqing’s automobile industry achieved a total industrial output value of 315.5 billion RMB, which was increased by 30.1% over the previous year, and accounted for 34.7% of its annual total industrial output value. The total volume of automobile production and sales reached 2,297,000 and 2,279,000, increased by 36.5 and 37% over the previous year, respectively, and the sales volume accounted for 12.58% of the national total. The total volume of motorcycle production and sales reached 10.15 mil-lion and 9.97 million, increased by 8.5% and 9.3% over the previous years, respectively, and the sales volume accounted for 37.5% of the national total. The total industrial out-put value of automobile and motorcycle parts for fi rms above the designated scale reached 122 billion RMB and increased by 35.57% over the previous year. 6
Fifteen automobile-motorcycle enterprises were listed in the 2010 top 50 Chongqing industrial enterprises and achieved the total primary operating revenue of 210.35 billion RMB, which accounts for more than 58.8% of that for the top 50 enterprises. Chongqing Changan Automobile Company Limited, Chongqing LIFAN Group Corporation and other four automobile-motorcycle enterprises rank among the fi rst ten of top 50 enterprises. And Chongqing LIFAN Group Corporation,
6 2010 Economic Operation of Chongqing Automobile and Motorcycle and Their Parts Industries.
http://www.cq.gov.cn/zwgk/zfxx/285763.htm
634 China’s Logistics Development in Certain Key Regions
Qingling Motors (Group) Co., Ltd., Loncin General Dynamics Co., Ltd. and Zongshen Industrial Group rank among China’s top 500 manufactures in 2010.
The expanding magnitude of production and sales of automobile and motorcycle has brought a huge market demand for automobile and motorcycle logistics and pro-moted the development of the specialized third party automobile logistics enterprises, such as Chongqing Changan Minsheng APLL Logistics Co., Ltd., Chongqing National Container Automobile Logistics Co., Ltd., etc. Based on the “ Eleventh Five-Year” Development Plan of Chongqing Automobile and Motorcycle Industry and the restructuring of industrial disposition, Chongqing, relying on its existing infrastruc-ture, accelerated the construction of resource-integrating and information-sharing automobile and motorcycle logistics center. The center encompasses transportation, storage, information and dispatching and other logistics service functions for whole vehicles and parts. Chongqing is also actively developing waterway transport of raw materials and parts for automobile and motorcycle as well as truckload ro-ro transport of automobile by taking full advantage of the Yangtze River’s golden waterway. In September 2010, the construction of Chongqing highway logistics base broke ground; this base is the unique State-level integrated hub highway base in Chongqing and the largest highway logistics base in the Western region. Upon completion this base will become a fi rst-class modern logistics base combining highway, railway and waterway multimodal transport and will highlight its development through a large-scale exhibition and trading marketplace of automobile and motorcycle.
4.1.3.2 Electronics Logistics
The electronic information industry in Chengdu-Chongqing Economic Zone is one which holds a competitive edge. Chengdu, Mianyang and Leshan are China’s impor-tant electronic information industry bases and Chongqing is an important production base of laptops, printers and communication products. By 2010, 175 of the world’s top 500 enterprises have settled in Chongqing. As the full integration of Intel Shanghai Assembly & Test Factory and Chengdu factory was completed, half of the global laptop chips are “Made in Chengdu.” And three global laptop giants – HP, Acer and Asus, six major foundries – Quanta, Compal, Wistron, Foxconn, Inventec and Pegatron, and more than 500 accessory factories have settled in Chongqing.
The settlement of parts manufacturers lowers the inbound logistics cost of laptop manufacturers; as to outbound logistics, Chongqing opened multiple international cargo airlines to Europe and America. On June 30, 2011, Chongqing formally opened the south line of new Eurasia Land Bridge – “Yu-Xin-Europe” international freight railways as an important channel for exporting computers. 7 The operation of
7 “Yu-Xin-Europe” (“Yu” and “Xin” refer to Chongqing and Alashankou in Xinjiang) means to make use of the south line of Eurasia Land Bridge international railway passage, starting from Chongqing, passing westward through North Xinjiang Railway via Xi’an, Lanzhou and Urumqi, crossing the boundary port Alashankou, then entering Kazakhstan, and fi nally reaching Duisburg of Germany by way of Russia, Belarus and Poland, with total a length of 11,179 km.
64 P. Chen et al.
this new channel reduces the transport time by 2/3 compared with water transport and saves 90% on cost in comparison with air transport, thus providing a high-ef fi ciency and low-cost method of exporting laptops. The settlement of manufactur-ers also attracts many specialized logistics enterprises, such as Fongfujin Precision Electronics (Chengdu) Co., Ltd., established under the contract between the Sichuan Provincial Government and Hon Hai Precision Industry, and the Golden House Logistics and Shenzhen Energy Logistics settled in Chongqing following Foxconn’s move.
4.1.3.3 Bonded Logistics
In 2008, the State Council approved the establishment of Chongqing Cuntan Dual-way Bonded Port Area, which is the fi rst inland bonded port area featuring dual-function of “dry port + airport” with the total project investment of about ten billion RMB, covering a planned area of 8.37 km 2 . On May 11, 2010, the phase I construc-tion of Chongqing Cuntan Dual-way Bonded Port Area passed the validation check by the Joint Acceptance Group of the State Council. Upon the Customs’ closure for initiating the operation, this area is expected to become a bonded processing and logistics center serving the Central and Western regions of China, and affording great signi fi cance to the development of foreign trade and export-oriented economy in the Western regions. The Chongqing bonded port features international trade transfer, dispatching, purchase, transit, processing and other functions. It not only enjoys the most preferential policies for bonded logistics but also has the strongest locational advantage; its degree of opening up surpasses that of any previous form of bonded logistics. So it is presently regarded as a special area having the highest level of bonded logistics operation. According to statistics, Chongqing bonded logistics business reached 190 million USD from January to July of 2011, and as estimated, the amount of external cargo transfer would reach 60,000 TEUs annu-ally, with a cargo value of one billion USD. 8 In addition, substantial savings in logistics cost draws numerous enterprises to gather in the bonded port area. By May 2010, Chongqing bonded port area has consummated cooperation agreement with 94 local and overseas enterprises, including Maersk, Japan Itochu, COSCO Chongqing Logistics and Southwest Aluminum, as well as some domestic top-500 enterprises, such as China Mobile, Tranvic Group, Lifan, Zongshen Industrial Group, Loncin, and Chongqing Trading Company Group.
The Chengdu export processing zone was established with the approval of the State Council in 2004, and it achieved a total export-import volume of 6.42 billion USD in 2009. The total export-import volume from January to July 2010 was 5.08 billion USD, increased by 43% compared with that in the same period of 2009. It is
8 New Type of Bonded Logistics in Chongqing Innovation Pattern Development .
http://www.cq.gov.cn/zwgk/zfxx/340359.htm
654 China’s Logistics Development in Certain Key Regions
one of the best developed export processing zones nationwide, ranking fi fth nation-wide and fi rst in the Midwest on a comprehensive basis. The Chengdu Bonded Logistics Center (type B) passed the validation acceptance in March 2009 and began operation in July, and has been developing steadily. On October 18, 2010, the Chengdu Comprehensive Hi-tech Bonded Zone was built with the approval of the State Council. This newly established bonded zone was founded on the integration and expansion of the existing Chengdu export processing zone and the Chengdu Bonded Logistics Center (type B), located in the western park of the Chengdu Hi-tech Zone with a planned area of 4.68 km 2 . It rolls the functions of bonded export, bonded logistics and port into one and is a domestic special area with the fullest functions and the most preferential policies under the Customs supervision. Inside the approved park, Intel, Foxconn, Texas Instrument, HP, Molex and more than 15 other enter-prises have settled in, bringing in a total investment of 223 million USD. 9
This section depicts the development of the economy and logistics in the Chengdu-Chongqing Economic Zone. From 2006 to 2010, the State continued to further the Westward development strategy while the migration of industries from the Eastern region to the Western region was accelerating. Hence the economic development in the Chengdu-Chongqing Economic Zone exhibited a strong posture. The economic growth provides a favorable environment for the development of logistics in this zone. Relying on the overall advantage of solid industrial foundation, obvious loca-tional advantage and well-endowed comprehensive transportation network, the logistics industry in Chengdu-Chongqing Economic Zone experienced a rapid development. Besides, industry upgrading and the positive effects from undertaking the massive transfer of eastern industries expand the scale of logistics market demand and promote the development of logistics enterprises. Based on the good locational advantage, the railway, highway, in-land river, aviation, and other trans-port infrastructures were further improved. Many logistics parks and centers were established, and the logistics informationization level was also improved. Finally this section describes the logistics for several distinctive industries in the Chengdu-Chongqing Economic Zone, including automobile and motorcycle logistics, elec-tronic logistics and bonded logistics. Development of specialized logistics for these industries is also presented.
4.2 Development Status of Logistics in Xinjiang
Xinjiang is the largest provincial administrative region of China with a total area of 1.66 million km 2 , accounting for 1/6 of the nation’s territory. It is situated in the hinterland of Eurasian Continent, in the northwest of China and adjacent to Russia, Kazakhstan, Kirghizstan, Tajikistan, Pakistan, Mongolia, India and Afghanistan.
9 Establishment of Chengdu Comprehensive Hi-tech Bonded Zone with Approval of the State Council.
http://scnews.newssc.org/system/2010/10/25/012939818.shtml
66 P. Chen et al.
The land border of Xinjiang is over 5,600 km, amounting to 25% of Chinese land borders. Xinjiang also serves as a gateway for China to Central Asia; its unique geographical location and opulent natural resources afford a crucial foundation for its recent fast economic development. With Xinjiang’s increasing status and contri-bution in China’s economic development, its logistics begins to play a more important role in the logistics system of China.
This section is divided into three parts. Part one presents an overview of the economic development of Xinjiang, including major economic indexes, industrial structures and characteristics. Part two elaborates on the development of the logistics market in Xinjiang, including statistics for the logistic enterprises, infrastructure construction and development environment. The third part describes Xinjiang’s port logistics, including the general status of its port construction, development of key ports and related problems.
4.2.1 Overview of Economic Development in Xinjiang
With a view of promoting the economic development of China’s Western region, the Chinese Central Government has implemented the “Grand Development Strategy of the Western Region” since 2000. Furthermore, a new round of policies on supporting the economic development of the Western region have been carried out since 2009, major economic indexes of Xinjiang have surged in 2010; its economic structure has been gradually adjusted, and its overall economic strength has been markedly forti fi ed.
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Fig. 4.7 Regional GDP and growth rate of Xinjiang and National GDP growth rate for 2006–2010 ( Source : Compiled from the Statistical Yearbook (2007–2010) of China, the Statistical Yearbook (2009) of Xinjiang, and the Statistical Bulletin of National Economy and Social Development (2010) of Xinjiang)
674 China’s Logistics Development in Certain Key Regions
4.2.1.1 Major Economic Indexes
The regional GDP of Xinjiang has made steady progress from 2006 to 2010 at an average GDP growth rate of 10.58%, with each year’s growth rate approaching the national average growth rate of the same year. In 2010, the regional GDP reached 541.9 billion RMB, seeing an increase of 10.6% 10 compared with that of 2009. Figure 4.7 shows the details.
The total retail sales of consumer goods in Xinjiang have maintained a constant and rapid growth from 2006 to 2010. Details are given in Fig. 4.8 . After the global fi nancial crisis, China has implemented the economic policies of expanding domes-tic demand and promoting consumption. With the ever-improving consumption environment, the consumer goods markets in Xinjiang have kept up its upward trend. In 2010, Xinjiang has achieved a 132.5 billion RMB of total sales of social consumer goods, realizing a year-on-year increase of 17.1%.
Total value of import and export trade: Xinjiang mainly imports crude oil, agri-cultural products, ore and other resource products and exports apparels and electro-mechanical products. Over the past 5 years, due to the sizable import of crude oil and natural gas, the total value of import and export trade rose rapidly, with the growth rate reaching 62% in 2008. But it suffered a drastic drop caused by the inter-national fi nancial turmoil in 2009. Figure 4.9 shows the total value of import and export trade and the growth rate of Xinjiang for 2006–2010.
10 In this section, price fl uctuations have been taken into account during the calculations of growth rates of GDP, total output value of the agricultural sector, added value of the industrial sector, total amount of export and import trade and other related data indexes. Unless otherwise speci fi ed, all above values are price-adjusted.
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Fig. 4.8 Development trend of total retail sales of social consumer goods in Xinjiang for 2006–2010 ( Source : Compiled from the Statistical Yearbook (2009) of Xinjiang, and the Statistical Bulletin of National Economy and Social Development (2009–2010) of Xinjiang)
68 P. Chen et al.
4.2.1.2 Industrial Structure and Characteristics
Evolution of the three industries: Xinjiang enjoys a rapid increase of added value of the secondary industry and the tertiary industry, adding great contributions to its GDP growth. In 2010, the added value of the primary industry reached 107.9 billion RMB, grown by 4.5%; the value for the secondary industry was 253.4 billion RMB, risen by 12.6%, and that for the tertiary industry was 180.7 billion RMB, increased by 10.9%. The proportion of contribution made by the three industries to GDP was respectively 19.9, 46.8 and 33.3%. Figure 4.10 exhibits the added values of the three industries in Xinjiang from 2000 to 2010.
Main characteristics of the regional industrial development: Traditionally, Xinjiang’ development focus had been on the excavation and preliminary process-ing of agricultural products, petroleum, coal and other resource products. However, guided by the transformation strategy basing on its advantageous resources, Xinjiang has basically established its distinctive modern industrial system in recent years. Notably, tourism, conference & exhibition, logistics and other sectors of the tertiary industry have all gained rapid development.
Thanks to its unique geographical location and climatic condition, Xinjiang is endowed with great strength in developing a primary industry with a broad cover-age. Rich in agriculture, forestry, animal husbandry and fi shery resources, Xinjiang is a vital strategic reserve base of food security and the largest high-quality com-modity cotton production base in China. In 2010, the total grain output has realized a record high grain output of 11.7 million tons, and its total cotton output was 2.48 million tons, accounting for 41% of the national total output. Total area of orchards has exceeded 2.8 million acres with the total fruit output of eight million tons. In addition, the total output of pork, beef and lamb in animal husbandry reached 1.05 million tons; the reserve of cold-water fi sh and sub-cold-water fi sh resources rank at the nation’s top.
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Fig. 4.9 Total value of import and export trade and growth rate of Xinjiang for 2006–2010 ( Source : Compiled from the Statistical Bulletin of National Economy and Social Development (2006–2010) of Xinjiang)
694 China’s Logistics Development in Certain Key Regions
Xinjiang’s secondary industry possesses certain distinctive characteristics and is developing rapidly. It has evolved from simple resource exploitation to processing and circulation; the industrial chains of petrochemical industry, coal chemical and textile have been established. With the brisk development of the new energy indus-tries, Xinjiang’s strength in crude oil resources has gained more prominent strategic status in China’s economic structure.
In contrast, the proportion of Xinjiang’s tertiary industry is relatively low and lagging the national average level by 10%. The majority of the tertiary industry belongs to traditional service industry; the development of modern logistics, fi nance, insurance and other productive services lags behind the regional eco-nomic development.
4.2.2 Development of Xinjiang’s Logistics Market
Logistics is a vital basis for Xinjiang to bring the advantage of both geographical location and resource into full play and speed up its economic development. In 2010, the construction of logistics infrastructure in Xinjiang was noticeably accelerated, and the policy environment was also improved. With the economic recovery after the global fi nancial crisis, the logistics market has grown steadily, showing a favorable development trend.
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Year
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Fig. 4.10 Added values of three industries in Xinjiang for 2000, and 2005–2010 ( Source : Compiled from the Statistical Yearbook (2009) of Xinjiang and the Statistical Bulletin of Social Economy and Social Development (2009–2010) of Xinjiang)
70 P. Chen et al.
4.2.2.1 Demand of Logistics Market
Added value of transportation, warehousing, posts and telecommunication: From 2006 to 2010, the added value of transportation, warehousing, posts and telecom-munication have made substantial progress at an annual average growth rate of 9.47%. The above added value was 23.6 billion RMB in 2010, showing a year-on-year increase of 12.4%. Figure 4.11 gives the details.
Freight volume and freight turnover: Over the past decade, both the economic aggregate and the scale of overall logistics have been expanded continually. Moreover, freight volume has realized a substantial progress at an annual average growth rate of 6%. Average freight volume of unit GDP has declined signi fi cantly, implying a rising average GDP per unit freight volume due to improved industrial structure. Figure 4.12 shows the changes. Meanwhile, the freight turnover has developed fast with an annual average growth rate of 12%. Average freight transport distance exhibits an increasing trend as shown in Fig. 4.13 .
Cargo handling capacity of ports: In recent years, Xinjiang has witnessed a swift development of boarder trade with Kazakhstan, Kirghizstan, Uzbekistan, and Tajikistan in Central Asia, so the cargo handling capacity of ports has attained a sustained growth. The boarder trade involves import of crude oil, natural gas and other bulk energy products, and export of food, shoes, textiles, apparels, articles for daily use, household appliances and other light industrial products. Border trade of Xinjiang has ranked at the top among nine land frontier provinces and regions nationwide for seven consecutive years; Xinjiang’s role as a channel for energy resources and a gateway of China to Central Asia, is further highlighted. During the entire “11th Five-Year Plan” period (2006–2010), except for 2008, the import and export freight volume at Xinjiang’s ports has grown rapidly at an average rate of
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Fig. 4.11 Added value and growth rate of transportation, warehousing and posts and telecommu-nications in Xinjiang for 2006–2010 ( Source : Compiled the Statistical Yearbook (2009) of Xinjiang and “Added value of provincial transportation, warehousing and posts and telecommunications” ( http://www.doc88.com/p-99257646964.html ) from 1987 to 2009)
714 China’s Logistics Development in Certain Key Regions
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Fig. 4.12 Freight volume and unit GDP freight volume of Xinjiang for 2001–2009 ( Source : Compiled from the Statistical Yearbook (2010) of Xinjiang and the Statistical Bulletin of National Economy and Social Development (2010) of Xinjiang)
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Fig. 4.13 Freight volume and average freight transport distance of Xinjiang for 2001–2009 ( Source : Compiled from the Statistical Yearbook (2010) of Xinjiang and the Statistical Bulletin of National Economy and Social Development (2010) of Xinjiang)
more than 20%. In particular, import and export freight volume has reached 26.26 million tons in 2010, representing an increase of 95.24% compared with that in 2006. Figure 4.14 gives more details.
72 P. Chen et al.
4.2.2.2 Supply of Logistics Market
Xinjiang has historically served as a corridor for travelers and logistics fl ows between the East and the West. At present, several trading nodes featuring interna-tional logistics, such as Urumqi, Kashi, Alashankou and Horgos, are scattered across Xinjiang. These nodes play an important role in regional economic cooperation between China and Central Asia, West Asia, Russia and Mongolia. Following is a description of the supply situations in logistics market of Xinjiang, basing on the transportation infrastructures and the construction of logistics parks.
Transportation infrastructures: Xinjiang has witnessed signi fi cant progress in railway construction from 2006 to 2010. As of 2010, the total railway millage in operation here reached 4,100 km, increasing by 1,070 km compared with the length at the end of 2005. From 2011 to 2015, Xinjiang plans to invest about 120–150 billion RMB in railway construction. By 2020, Xinjiang will form a main railway framework integrating four horizontal railways and four vertical railways, four for-eign channels, six railway ports and four railway hubs. 11 By then, the railway net-work will cover all prefecture-level cities and 90% of county-level towns as shown in Fig. 4.15 .
As for highways, the total highway millage of Xinjiang has reached 153,000 km at the end of 2010, which consists of 840 km of expressways, 1,400 km of fi rst class
11 Four horizontal railways: Zhundong-Jiangjunmiao-Hami-Ejina of Inner Mongolia Railway, Alashankou-Urumqi-Hami-Lanzhou of Gansu Railway, Korla-Ruoqiang-Golmud of Qinghai Railway, and Kashkar-Hetian-Shigatse of Tibet Railway.
Four vertical railways: Altay-Karamay-Yining-Aksu Railway, Fuyun-Zhundong-Urumqi-Baluntai-Korla Railway, Turpan-Korla-Aksu-Kashkar Railway, and Hami-Lop Nor- Ruoqiang-Hetian Railway.
Four channels: Lanzhou-Xinjiang Railway and the second double-line channel of Lanzhou-Xinjiang Railway, Hami-Linhe of Inner Mongolia Channel, Korla-Gulmod Channel, and Hetian-Shigatse Channel.
Six ports: Alashankou, Horgos, Turcart, Khunjerab, Jeminay and Taskhin. Four railway hubs: Urumqi, Hami, Korla and Kashkar.
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734 China’s Logistics Development in Certain Key Regions
highways and 10,980 km of second class highways. The remaining roads are of third, fourth classes and unrated. As planned, the total serviceable highway millage in Xinjiang will reach 170,000 km by 2015. Highways in the main framework will be upgraded into expressways, upping the total expressway millage to 4,000 km. In addition, the serviceable millage of higher-class highways (of fi rst and second class and above) will approach 20,000 km.
With respect to aviation, Xinjiang has 16 accessible airports by the end of 2010. As planned, portal hub airport of Urumqi will be completed at the end of 2015 and it will serve as a large international hub airport. At that time, Xinjiang will enjoy an airport cluster centered at Urumqi and radiating to other airports in East, South, West and North Xinjiang.
Construction of logistics park: Xinjiang has successively built several large and prominent logistics parks, which favorably promoted the regional and cross-border logistics development. The completion of Xinjiang Yisheng Drug Wholesale and Retail Logistics Park has ameliorated the out-dated model of drug distribution and operation. Xinjiang Yazhong Electromechanical Logistics Park is the largest elec-tromechanical market with most complete functions of its kind in Xinjiang, as well as in Northwest China at present time. Xinjiang’s logistics park system, which
Fig. 4.15 Railway framework of Xinjiang with four horizontal railways and four vertical railways
74 P. Chen et al.
comprises Urumqi and some key port cities as the center, is under planning and construction. The Xinjiang Commerce and Trade City Logistics Center, which covers a total area of 120,000 m 2 , has been completed in Urumqi. Covering a land area of more than 300,000 m 2 , the South Logistics Xinjiang Integrated Logistics Park is under accelerated construction in the Urumqi Economic and Technological Development Zone. Integrated logistics parks are also being actively planned in Kashkar, Horgos and other ports. In general, these projects are planned by private enterprises. However, they will be posted into the government’s planning agenda and be initiated and approved by the relevant authorities. During the government’s planning process, projects already under construction and to be built would be taken into account.
4.2.2.3 Signi fi cant Status and Development Environment of Logistics in Xinjiang
As an international channel for China to import energy resources and rare mineral resources, Xinjiang has become an ever-more important logistics hub. The logistics of Xinjiang plays a signi fi cant role in its gathering and distributing function for the continental bridge economic zone, as well as in incorporating the economic strength of the Eastern region with the resource strength of the Western region. Its unique resource strength and geographical advantage will thus help Xinjiang evolve into a processing base, transfer distribution center and logistic channel for China to the West. Furthermore, the logistics development in Xinjiang has propelled it to a vital strategic status in the promotion of economic cooperation between China and Central Asia.
Implementation of the Adjustment and Revitalization Plan for Logistics Industry : Presently relevant authorities of Xinjiang government are actively pushing forward logistics tasks in light of the Adjustment and Revitalization Plan issued by the Central Government. Important measures taken by the authorities to actuate the plan include eliminating policies and measures impeding or restricting cross-sector and inter-regional logistics services, breaking barriers of trade monopoly and local protectionism on logistics resource integration and all-round operation, and strength-ening industry control and administrative law enforcement. Further actions on the operational front include standardizing business operations of logistics enterprises, improving logistics service quality, putting an end to illegal operations, and keeping orders of all logistics markets.
Promotion of economic and trade cooperation with surrounding regions: Since the economic structure of Xinjiang is complementary to that of surrounding coun-tries as well as China’s inland provinces and municipalities, Xinjiang spares no effort to promote the development of export-oriented economy and carry out eco-nomic and trade cooperation. The Urumqi Foreign Economic Relations and Trade Fair, which has been successfully held for 19 years, afforded a valuable avenue for Xinjiang to expand its scope of foreign trade. The Fair aims to enhance Xinjiang’s economic cooperation with related inland provinces, municipalities and regions,
754 China’s Logistics Development in Certain Key Regions
boost its border trade and export trade, attract foreign investment to mesh the foreign trade, domestic investment and foreign investment into an organic whole, and to expand its market shares in Central Asia. Since 2011, the Fair has elevated its standing to the “China-Eurasia Expo,” further solidifying the signi fi cant status of Xinjiang in the “opening up the West” strategy.
4.2.3 Development of Xinjiang Port Logistics
Since the new Eurasian continental bridge traverses across Xinjiang, port logistics is naturally a distinct feature of logistics development in Xinjiang. With China’s intensi fi ed opening-up policy to the West, Xinjiang has forti fi ed its cross-border and inter-regional economic and trade cooperation. Such emphasis on economic devel-opment has mandated the continual improvement of its logistics infrastructures and policy climates, and thus strengthened the pace of its port logistics.
4.2.3.1 General Status of Port Construction
In the past decade, both the quantity and freight turnover in Xinjiang’s ports have been increasing year by year. As of 2010, the State Council and Xinjiang govern-ment have approved the plan for 17 category-1 ports and 11 category-2 ports. Among all category-1 ports, two ports are airports and 15 ports are land ports. The two airports are Urumqi Airport and Kashkar Airport. Of the 15 land ports, Tarkshken, Hongshanzui, Wulasitai and Laoyemiao are located at the border between Xinjiang and Mongolia; Ahitubiek, Jeminay, Baketu, Alashankou, Horgos, Dulata and Muzart are at the border between Xinjiang and Kazakhstan; Torugart and Yierkstan are at the border between Xinjiang and Kyrghizstan; Kalasu is at the border between Xinjiang and Tajikistan; Kunjirap is at the border between Xinjiang and Pakistan.
4.2.3.2 Rapid Development of Key Ports
Alashankou and Horgos are two most important frontier land ports among 17 national category-1 frontier ports, both situated at the border between China and Kazakhstan. Moreover, they also serve as major nodes for port logistics development in Xinjiang.
Development of Alashankou Port: This port is 460 km away from Urumqi and is the only national category-1 port having integrated railway, highway and oil pipeline. Since its opening in 1991, freight turnover at the port has been increasing with great momentum year by year. In 2009, freight turnover at this port reached 23.23 million tons, ranking at the top among all land ports nationwide for the fi rst time. In 2010, its freight turnover reached 25.24 million tons, representing a year-on-year increase of 8.65%. Figure 4.16 shows the annual details.
76 P. Chen et al.
The warehousing area at the port reaches 554,000 m 2 , and encompasses the largest indoor container transfer warehouse in Asia. It is equipped for around-the-clock container transfer, with an annual transferring capacity of 200,000 TEUs. Presently the port is actively promoting its logistics functions and applying for the status of an integrated bonded zone. In the future, the port will thus develop from a simple trans-portation channel of goods into a modern logistics center, integrating export and import commodity transfer, distribution and processing, and eventually becoming a center for import and export trade, processing trade, tourism and shopping.
Development of Horgos Port: This port is the largest highway port in Northwest China and has evolved into a major bridge and window for China to link with Kazakhstan and Western European countries. Figure 4.17 exhibits the freight turnover and growth rate of Horgos Port from 2006 to 2010. Worth-noting is that in 2010, the port has realized an import and export freight turnover of 3.27 million tons, re fl ecting a growth rate of 581% over 2009. The surge is due to the massive import volume of 2.61 million tons of natural gas, soaring by 151 times from the previous year.
Horgos Port has preliminarily established the economic framework of port develop-ment backed by the China-Kazakhstan International Border Cooperation Center, Industrial Parks and International Logistics Centers. Presently local governments are making plans for long-term logistics operations, expressway, railway port, international passenger transportation stations at the port and helping local logistics enterprises to expand their size as well as enhance their strength. As of 2010, the port has 13 warehous-ing and logistics enterprises with a total warehousing and logistics area of 630,000 m 2 .
4.2.3.3 Main Problems of Port Logistics Development in Xinjiang
Regardless of the substantial progress, steady growth of import and export trade and fast development of transportation and park construction, Xinjiang has encountered the following fundamental problems in the long-term development of its port logistics.
Weak port logistics infrastructures: Most of Xinjiang’s border ports are under unfavorable natural conditions, making it hard to build port infrastructures. Moreover,
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774 China’s Logistics Development in Certain Key Regions
lack of funds has impeded the construction of infrastructures for transportation, warehousing, Customs inspection and informatization, to keep pace with its economic development. At present, logistics parks under construction are mainly invested by enterprises. Due to high construction cost, long recovery period and lack of systematic support policies, enterprises are hampered by the high entry threshold, resulting in an adverse impact on the pace of infrastructure construction and development.
Incomplete functions of logistics node: Logistics at most border ports of Xinjiang is still restricted by geographical location, natural condition, population distribution, level of industrial development and scale of port development. Customs clearance, multi-modal transportation, bonding, supporting system for fi nancial settlement and international transportation are still unavailable at most ports; only ports at Alashankou and Horgos have relatively fuller functions. In particular, most ports lack specialized container transport stations; though some railway stations have container handling capability, they generally have sub-par operating capacity. There are even fewer infrastructures for highway and railway combined transport, thus weakening the inte-grated transportation capacity of the Eurasian continental bridge.
Service level of port logistics need to be elevated: About 70% of commodities exported from Xinjiang to Central Asia and surrounding countries are originated from inland China. With the trade development, Xinjiang has created certain commerce and trade type logistics nodes, drawing supplies from inland China and shipping to Central Asia and surrounding countries. These logistics nodes basically serve as retail and wholesale market, with simple auxiliary logistics facilities and functions. They can only provide rudimentary-level logistics services of low added value, such as parking, freight forwarding, break-bulk cargo transportation as well as warehousing. With the increasing volume of border trade, expansion in product variety and the emergence of port processing and manufacturing, the demand for logistics service has evolved
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78 P. Chen et al.
towards specialization, diversi fi cation and integration. The service level of port logistics in Xinjiang must be promoted to meet the demand of its economic development.
This section discusses the current standing of Xinjiang’s logistics development in terms of its economic overview, the status of its logistics market and the develop-ment of port logistics. Unique geographical location, abundant natural resources and supporting policies issued by the Central Government lay a signi fi cant founda-tion for the speedy economic development and a more reasonable industrial struc-ture in Xinjiang. As for logistics market, Xinjiang is an international corridor for China on import of energy and rare mineral resources. It is currently moving in the direction of becoming a processing base, transfer and distribution center and logis-tics channel for China towards the West. It also holds an important strategic status in enhancing China’s economic cooperation with Central Asia. Moreover, port logistics is the distinctive feature of logistics development in Xinjiang because the crossing of the new Eurasian continental bridge through Xinjiang. With improved logistics infrastructures and policy environments, Xinjiang’s port logistics will develop at a much faster pace. Urumqi, Kashkar, Alashankou, Horgos and other logistics nodes are playing a more and more important role in regional economic and trade cooperation with Central Asia, West Asia, Russia and Mongolia.
4.3 Logistics Development in the Zhongyuan City Cluster
The Zhongyuan City Cluster (hereinafter referred to as the cluster) is located in Henan Province of Central China. It features a strong economic strength and favor-able geographical location. Besides being an integrated transportation hub linking East China with West China and South China with North China, the cluster serves as an important grain production base, energy material base, modern equipment pro-duction base and hi-tech industrial base of China. In recent years, rapid economic development of the cluster has signi fi cantly driven its logistics development.
This section is divided into three parts. In the fi rst part, economic development of the cluster is illustrated in terms of regional GDP, total retail sales of social con-sumer goods, total value of import and export trade, and the structure of the three industries. Part two discusses the characteristics of the logistics development of the cluster in light of its logistics market scale, transportation infrastructure construc-tion and the growth of logistics enterprise. The fi nal part elaborates on the develop-ment of logistics in sectors of cold chain logistics, medicine logistics, steel logistics and grain logistics speci fi c to the cluster.
4.3.1 Economic Development of the Cluster
The cluster refers to a closely linked circle with a 500 km radius, composed of Zhengzhou as the center, Luoyang as the sub-center, Kaifeng, Xinxiang, Jiaozuo, Xuchang, Pingdingshan, Luohe, Jiyuan and other regional cities as major nodes.
794 China’s Logistics Development in Certain Key Regions
It encompasses nine provincially administrated cities, 14 county-level cities, 34 counties and 374 towns. It covers a total land area of 587,000 km 2 , amounting to 35.3% of the total area of Henan Province, with a population of 39.85 million, and accounting for 40.3% of the total population of Henan.
As planned, the cluster is divided into three spheres: the core sphere of Zhengzhou-Kaifeng integrated area with Zhengzhou as the center; a compact sphere with seven provincially administrated cities as Luoyang, Xinxiang, Jiaozuo, Xuchang, Pingdingshan, Luohe and Jiyuan; an outskirt sphere, including nine provincially administrated cities, i.e., Anyang, Hebi, Puyang, Sanmenxia, Nanyang, Shangqiu, Xinyang, Zhoukou and Zhumadian. Figure 4.18 depicts the geographical layout of the cluster.
4.3.1.1 Regional GDP
The regional GDP of the cluster reached 1,333.1 billion RMB in 2010, accounting for 58.1% of the provincial GDP of Henan Province, and had risen from the 56.8% in 2006. The regional GDP of the cluster per capita was 28,296 RMB, equaling to 140% of the provincial average level.
Fig. 4.18 Schematic drawing of geographical layout of the cluster
80 P. Chen et al.
In light of the aggregate indexes of the cluster’s GDP, the growth rate of the cluster’s GDP for 2010 was 18.1%, 12 which is slightly higher than the provincial growth rate of 17.8%. Figure 4.19 show a comparison of GDP and the nominal growth rate between the cluster and Henan Province from 2006 to 2010. As shown, the nominal growth rate of regional GDP in the cluster was higher than that of the provincial regional GDP from 2006 to 2010.
4.3.1.2 Total Retail Sales of Social Consumer Goods and Total Value of Import and Export Trade
Henan Province has a total population of 100 million and also covers a vast eco-nomic hinterland, giving rise to a huge consumption market. In particular, the income of residents in the cluster has grown rapidly in recent years. Moreover, accelerated industrialization and urbanization quickly scale up the consumer goods market and bring huge development potentials to the logistics of consumer goods. Total retail sales of social consumer goods and total value of import and export trade of the cluster have respectively achieved 454.65 billion RMB and 17.79 billion USD in 2010, accounting for 57.6 and 75.1% respectively of the provincial indexes.
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Fig. 4.19 Comparisons of regional GDP and nominal growth rate between the cluster and Henan Province for 2006–2010 ( Source : Compiled from the Statistical Yearbook (2007–2010) of Henan and the Statistical Bulletin of National Economy and Social Development (2010) of the cluster)
12 Price fl uctuations are not taken into account in growth rate calculation. Nominal growth rates are applied throughout this section.
814 China’s Logistics Development in Certain Key Regions
Both indexes are higher than the proportion of the cluster’s GDP to the provincial GDP. Table 4.7 shows the total retail sales of social consumer goods, total value of import and export trade and nominal growth rate of the cluster in 2010.
Compared with the coastal regions in East China, Henan Province, taken as a whole, lacking the sense in developing export-oriented economy, has low depen-dency on foreign trade and attracts a small scale of foreign investment. Nevertheless, total export-import volume of the cluster is still 17 percentage points higher than the proportion of the cluster’s GDP in that of the whole province, showing that the overall level of foreign trade in the cluster still exceeds that of the other regions of Henan.
4.3.1.3 Structure of the Three Industries
In recent years, the cluster has actively transformed its mode of economic growth, resorted to the path of industrialization and focused on the regional industrial structure adjustment. In 2010, the added value of the cluster’s three industries respectively reached 116.09 billion RMB, 811.45 billion RMB and 405.57 billion RMB, result-ing in the structural proportions of 8.7, 60.9 and 30.4%. In comparison with the structural proportions of 14.2, 57.7 and 28.1% of Henan Province, the secondary industry of the cluster is relative stronger. The proportion of its tertiary industry is slightly higher than the provincial average level, while the proportion of the primary
Table 4.7 Total retail sales of social consumer goods, total value of import and export trade and nominal growth rate in 2010
Area
Total retail sales of social consumer goods (billion RMB)
Nominal growth rate (%)
Total value of import and export trade (billion USD)
Nominal growth rate (%)
Zhengzhou 167.80 19.0 5.16 43.3 Luoyang 80.88 19.0 1.54 37.7 Kaifeng 36.46 20.2 0.24 12.9 Xinxiang 38.82 19.5 1.13 8.7 Jiaozuo 32.18 18.3 1.76 63.0 Xuchang 34.93 19.5 1.29 16.2 Pingdingshan 35.00 19.4 0.43 −40.8 Luohe 21.63 18.4 0.39 39.6 Jiyuan 6.95 18.4 1.43 2.1 Total of the
cluster 454.65 – 13.37 –
Proportion to the provincial index (%)
57.6 – 75.1 –
Provincial index 789.35 19.0 17.79 32.0
Source : Compiled from the Statistical Bulletin of National Economy and Social Development (2010) of the cluster
82 P. Chen et al.
industry is 5.5 percentage points lower than the provincial average level. Table 4.8 exhibits the structure of the three industries of the cluster in 2010.
In recent years, the cluster plays an active role in boosting the base-oriented devel-opment of its advantageous industries, intensive development of both the traditional sector and labor-intensive sector and transformation of its hi-tech industries into hi-tech parks. Cities with prevailing agricultural sector positively abandon the primitive pro-duction mode and attach greater importance to developing ecological agriculture and distinctive agriculture. As for the industrial cities, they employ high technologies to upgrade the traditional industries and purposely develop the technology-intensive industries. At present, the cluster has built up an industrial foundation of substantial strength. Its competitive sectors have been notably promoted in Henan Province and even the whole country. These days, Zhengzhou, Luoyang, Jiaozuo, and Pingdingshan are morphing into signi fi cant energy, raw material and equipment manufacturing bases. Light textile and electronics industries are well-established in Xinxiang, Kaifeng and Xuchang, while the food industry in Luohe and Zhengzhou is quite competitive. In addition, information product manufacturing, automobile manufacturing, biological engineering and other new industries possess huge potentials in the cluster.
The cluster gives top priority to four major industrial development zones. The fi rst zone is an urban industrial corridor involving Zhengzhou, Kaifeng, Luoyang, and 12 cities (districts) around them, including Kaifeng and Zhongmu as key nodes. This zone has plans to develop six industrial bases, namely high technology, advanced manufacturing, automobile, aluminum industry, coal chemical and petro-chemical. The second zone refers to the industrial development zone with Xinxiang, Zhengzhou and Luohe (along the Beijing-Guangzhou Railway Line); this zone has plan for light textile, high technology and food industry and mainly develop
Table 4.8 Structure of the three industries of the cluster in 2010
Area
Industrial added value (billion RMB)
Proportions of the three industries
Primary industry
Secondary industry
Tertiary industry
Zhengzhou 12.46 226.99 160.55 3.1: 56.7: 40.2 Luoyang 18.76 139.62 73.74 8.1: 60.1: 31.8 Kaifeng 21.93 40.07 31.03 23.6: 43.1: 33.3 Xinxiang 15.72 68.65 33.78 13.3: 58.1: 28.6 Jiaozuo 10.33 85.53 28.90 8.3: 68.5: 23.2 Xuchang 15.00 90.20 26.08 11.4: 68.6: 20.0 Pingdingshan 11.47 86.94 32.80 8.7: 66.3: 25.0 Luohe 8.82 47.46 11.93 12.9: 69.6: 17.5 Jiyuan 1.60 25.99 6.76 4.6: 75.7: 19.7 Total of the cluster 116.09 811.45 405.57 8.7: 60.9: 30.4 Proportion to the
provincial index (%) 35.58 61.35 62.85 –
Provincial index 326.32 1,322.68 645.26 14.2: 57.7: 28.1
Source : Compiled from the Statistical Bulletin of National Economy and Social Development (2010) of the cluster
834 China’s Logistics Development in Certain Key Regions
electronics and electric appliances, biomedicine, new material, synthetic fi ber and textile, and other specialty industrial clusters. The third zone covers Xinxiang, Jiaozuo and Jiyuan to plan and develop energy, raw material and heavy chemical industries in particular. The fourth zone consists of Luoyang, Pingdingshan and Luohe to plan and develop raw material and heavy chemical industries.
4.3.2 Main Characteristics of Logistics Development in the Cluster
With the cluster’s rapid economic development, the scale of logistics market, the construction of transportation infrastructure and the growth of logistics enterprises of the cluster have exhibited the following new characteristics in recent years.
4.3.2.1 Rapid Expansion of the Logistics Market
For 2008 and 2009, the freight volume of the cluster has respectively accounted for 48.7 and 49.4% of the provincial aggregate, while the freight turnover amounted to 44.3 and 44.0% of the provincial total. The growth rate of freight volume and freight turnover of the cluster reached 29.9 and 30.3% respectively, which are evidently higher than the growth rate of the regional GDP of the cluster. Table 4.9 shows the freight volume and freight turnover of the cluster in 2008 and 2009.
Table 4.9 Freight volumes and freight turnovers of the cluster for 2008 and 2009
Area
2009 2008
Freight volume (million tons)
Growth rate (%)
Freight turnover (billion tons·km)
Growth rate (%)
Freight volume (million tons)
Freight turnover (billion tons·km)
Zhengzhou 139.53 22.5 21.11 31.4 113.87 16.06 Kaifeng 51.60 25.0 9.67 28.5 41.27 7.52 Luoyang 108.05 29.1 23.69 35.6 83.72 17.47 Pingdingshan 102.65 57.9 13.49 55.4 65.01 8.68 Xinxiang 65.94 27.2 14.72 61.9 51.84 9.09 Jiaozuo 99.22 23.4 56.82 20.6 80.38 47.12 Xuchang 123.71 27.0 26.39 25.0 97.40 21.11 Luohe 31.06 45.7 4.29 25.8 21.32 3.41 Jiyuan 26.03 24.1 2.63 25.8 20.97 2.09 Total of the
cluster 747.79 29.9 172.81 30.3 575.78 132.55
Proportion to the provincial index (%)
49.4 – 44.0 – 48.7 44.3
Provincial index 1,513.43 28.0 392.71 31.1 1,181.98 299.52
Source : Compiled from the Statistical Yearbook (2009–2010) of Henan
84 P. Chen et al.
4.3.2.2 Signi fi cant Advantages in Logistics Infrastructures
In recent years, Henan Province has timely shifted its investment focus to speed up its transportation infrastructure construction. Under the circumstance, the structure of road network has been improved; its favorable geographical location has further solidi fi ed the status of the cluster as an integrated traf fi c hub. By the end of 2009, the railway mileage of the province has totaled 3,998 km and the expressway mileage reached 4,861 km, ranking at the top among all provinces nationwide. The expressway mileage of the cluster is 2,226 km, amounting to 45.8% of the provincial total.
Several national trunk railways, including the Beijing-Guangzhou Railway, the Lianyungang -Lanzhou Railway, the Jiaozuo-Liuzhou Railway and the Xinxiang-Rizhao Railway come across one another in the cluster, of which the Beijing-Guangzhou Railway and the Lianyungang-Lanzhou Railway are two artery railways of the country. Moreover, many national highways, such as No.106, 107, 220, 207, 310 and 311, and over ten expressways, including the Beijing- Hong Kong-Macau Expressway, the Lianyungang-Horgos Expressway, the Erenhot-Guangzhou Expressway, the Daqing-Guangzhou Expressway and the Rizhao-Lankao Expressway, spread across the whole cluster. Wherein, the Beijing-Hong Kong-Macau Expressway and the Lianyungang-Horgos Expressway serve as two critical links between South China and North China and between East China and West China. Besides, the cluster has three civil airports, including the Zhengzhou Xinzheng International Airport, the Luoyang Airport and the Nanyang Airport, which have served 73 airlines by the end of 2009 and realized over 700 fl ights every week. Hence an integrated transportation system, giving priority to railway and highway and having civil aviation and waterway as auxiliary means has basi-cally been established in the cluster. Figure 4.20 gives a graphical display of the integrated transportation infrastructures of the cluster.
4.3.2.3 Logistics Showing a Tend of Concentration
With improving railway, highway, aviation and other integrated transport networks and the city’s continuous uni fi cation of intercity transportation, the economic devel-opment, logistics infrastructures and logistics events of Henan Province tend to con-verge towards Zhengzhou. Zhengzhou, as the core city of the cluster, possesses great development potentials as an inland international logistics center in Central and Western China.
First, Zhengzhou being situated at the intersection of two trunk railways, namely the Beijing-Guangzhou Railway and the Lianyungang-Lanzhou Railway, is renowned as the largest passenger and cargo transfer station on the east end of Eurasian continental bridge. The Zhengzhou North Railway Station is the largest freight marshalling station, with world-class transfer throughput and operations capability. Its East Railway Station is one of the largest container transfer stations nationwide, with fi ve international container transportation lines which can directly
854 China’s Logistics Development in Certain Key Regions
transport cargos from Zhengzhou to the ports in Shanghai, Qingdao, Lianyungang, Kowloon, and Tianjin. Second, the Xinzheng International Airport has been improv-ing its infrastructures; with throughput of cargo and mail both growing swiftly, it has been recognized by the State as one of China’s eight regional hub airports. Third, Zhengzhou has two category-1 ports, including the cargo port at Zhengzhou East Station and the Zhengzhou Airport, two category-2 ports, namely the Zhengzhou Haitangsi Inland Port and the Zhengzhou Highway Port, and some other special Customs’ custodial areas in Zhengzhou Export Processing Zone and Henan Bonded Logistics Center. Building on its strengths in multi-modal transport via organically integrated highway, railway and airport, Zhengzhou possesses the potential of developing itself into a dry port for foreign trade in Central and Western China and an oriental inland port to Russia and Europe.
From 2006 to 2010, Henan Province has developed a core circle of modern logistics in the cluster centered at Zhengzhou, aiming to promote a coordinated regional economic development based upon logistics integration. During this period, the Government has invested close to ten billion RMB in seven major logistics projects. These projects include the following: Zhengzhou National Trunk Highway Logistics Port, Zhengzhou International Airport Freight Center, Zhengzhou Railway Container Cargo Center, Zhengzhou Railway Less-than-Truckload Cargo Center, Zhongnan Posts Logistics Distribution Center, Zhengzhou Export Processing Zone and Henan Import Bonded Zone. At present time, most of these projects have been put into operation.
Fig. 4.20 Schematic drawing of integrated transportation infrastructures of the cluster
86 P. Chen et al.
4.3.2.4 Fast Growth of Backbone Logistics Enterprises
Amid fi erce market competitions, a host of logistics enterprises in the cluster have accelerated their tempo in restructuring, transformation, integration, acquisition and strategic alliance. Some large and competitive backbone logistics enterprises, such as Yuxin Logistics, Henan Highway Port Logistics, Zhengzhou Transport Group, Xuchang Wanli Logistics, Zhengzhou Changtong Logistics, Shuanghui Logistics, Xinfei Express and Luoyang Branch and Zhengzhou Branch of Zhongchu Development Stock Co., Ltd., have emerged. In addition to the traditional ware-housing and transportation services, these enterprises have demonstratively expanded to procurement, circulation processing, information service, consulting service, logistics fi nance and other logistics related areas.
Over the past years, large logistics enterprises of the cluster have contributed more investment to the reformation and construction of logistics informatization software and hardware, and enhanced the logistics informatization renovation. For instance, Zhengzhou Transport Group and Xuchang Wanli Logistics have each invested over ten million RMB in the reformation of their logistics informatization and also actively perfected their business management information system, thus providing an exem-plary role to others. In 2007, Henan Province started to develop the logistics informa-tion platform for different sectors, including respectively public information platform for grain logistics, for publication logistics, and for agricultural products logistics. A logistics information website in Anyang named “ www.8glw.com ”, which signed strategic cooperation agreements with Anyang Mobile Communication Company and Beijing Handinfo Group, has been put into operation.
At present, the cluster has seven 4A-grade logistics enterprises, three 3A-grade logistics enterprises and fi ve 2A-grade logistics enterprises. According to incom-plete statistics of the Henan Logistics and Procurement Federation, there are cur-rently more than 200 enterprises at grade A and higher level, based on national logistics enterprise classi fi cation and appraisal standards; of which 39% are of transportation type logistics enterprises, 26% are of warehousing type and 35% are integrated logistics enterprises.
Overall, logistics in the cluster is still less developed when compared with developed logistics in the coastal regions of East China. The lagging is showing in the following attributes: smaller scale and lower quality logistics enterprises, services of most logistics enterprises focusing on traditional logistics, and weaker capability in providing logistics solution design, logistics system planning and all-round integrated logistics services.
4.3.3 Logistics Development in Different Sectors in the Cluster
With the cluster’s rapid development of food processing, equipment manufacturing, automobile, and steel industries, specialized third-party logistics serving speci fi c sectors possessing noticeable industrial features have boomed. Some logistics
874 China’s Logistics Development in Certain Key Regions
enterprises with distinctive features and high specializations, such as Shuanghui Food Logistics, Henan Jointown Medicine Logistics and Huafeng Steel Logistics, have emerged in the cluster. Logistics models, including “cold chain distribution plus chain store retail,” “network-based cold storage plus fresh raw material processing and distribution,” and “express delivery plus e-commerce” have been promoted vigorously. Furthermore, medicine logistics and household appliance logistics are making steady progress, and grain logistics and steel logistics both hold huge growth potential. A description of the actual logistics development of the cluster in sectors of cold chain logistics, medicine logistics, steel logistics and grain logistics follows.
4.3.3.1 Cold Chain Logistics
Henan Province boasts the largest grain production base nationwide. Nationally, its fruit and vegetable output ranks second, its meat output ranks third and milk output takes the fourth place. Moreover, the output of instant frozen foods, fresh meat and meat products has, respectively, amounted to 72 and 13% of the national total, and over 60 and 50% are shipped out of the province, respectively. In view of this, cold chain logistics has evolved into one of the key sectors in logistics development of the cluster.
At present, cold chain logistics enterprises in the cluster are actively establishing a cold chain logistics service system through interactive development with the food industry and the commercial circulation sector. Shuanghui, Topin and other food manufacturers have expedited their logistics operations as well as assets re-allocation to establish independently-operated specialized cold chain logistics companies. These manufacturers are working hard to improve their cold chain network, extend value-added services and realize network-based, standardized and large-scaled development. Some large meat and instant frozen food production enterprises have implemented low-temperature control over the full process of cutting & processing, storage & transportation and end-point sales. Furthermore, some commercial chain enterprises have established their own fresh raw material distribution centers for the joint distribution of fresh raw products to various retail stores.
4.3.3.2 Medicine Logistics
Pharmaceutical manufacturing industry has had a solid foundation in Henan Province, hosting more than 370 domestically famous pharmaceutical enterprises with the scale above designed level, such as Hualan Bio, Wanxi Pharmaceutical, Tianfang Pharmaceutical and Furen Pharmaceutical. In 2008, the total value of pharmaceutical industry for Henan reached 48.4 billion RMB, ranking fi fth nation-wide and fi rst among six provinces in Central China. With the increasing income level of its residents and growth in the aging population, greater concerns about health have directly stimulated the demand for medicines of about 100 million resi-dents in the province. Hence, medicine logistics is another key sector in the cluster’s logistics development.
88 P. Chen et al.
In recent years, medicine logistics in the cluster has witnessed rather fast development; two nationally known medicine logistics enterprises, the Sinopharm Group and Jointown, have already begun their business in Zhengzhou. Meanwhile, local enter-prises, Aisheng Medicine and Henan Medicine Supply Company, have also sped up their logistics development. Sinopharm Group has attained centralized delivery and information sharing with nine hospitals in Zhengzhou, while Jointown has applied advanced automatic sorting system and achieved a delivery accuracy of 99.99%. Furthermore, Sinopharm Group Zhengzhou Logistics & Distribution Center, Jointown Zhengzhou Distribution Center, and Aisheng Medicine Zhengzhou Distribution Center all have set up operation in the Zhengzhou Economic & Technological Development Zone, forming a clustering stance of the medicine logistics.
4.3.3.3 Steel Logistics
Henan Province is renowned for its solid foundation of steel industry and as a large steel manufacturer and consumer. With the fast development of automobile, equip-ment manufacturing, and building industries, the demand for steel materials in machinery, building and auto body has surge tremendously, bringing huge market potentials to the development of steel logistics in the cluster.
Steel logistics in the cluster started comparatively late but has developed rapidly with the following characteristics. First, the cluster has a large number of traditional steel trade markets. One or several steel trade markets are distributed around almost every provincially administrated city; there are more than ten such markets around Zhengzhou. Second, advanced types of steel logistics enterprises are developing rapidly. Zhengzhou Branch of Zhongchu Development Stock, Huafeng Steel, and Zhengzhou Metal Company are actively collaborating with upstream production enterprises, such as Taiyuan Steel, Handan Steel, and Anyang Steel, to establish strategic alliance. And they set up processing and distribution centers in key areas of steel consumption, so as to extend their logistics services to shearing & process-ing, distribution & transport, information processing and logistics fi nance. Third, steel manufacturers still favor self-managed logistics and adopt direct selling and distributor agency as their main marketing mode.
4.3.3.4 Grain Logistics
Henan Province produces abundant grain products, with total grain output ranked at the nation’s top for several previous consecutive years. In particular, the output of its summer grain accounts for 1/4 of the national total output, generating huge volume in grain circulation. Total output of grain commodity in the whole province reached 30 million tons in 2008, of which 11.25 million tons were sold to other provinces. Wheat fl our for the food processing industry, instant frozen rice and fl our foods, instant noodle and cookies have respectively accounted for 37, 72%, 27 and 31% of corresponding national total output, with top national ranking in each category.
894 China’s Logistics Development in Certain Key Regions
Besides, the annual processing and conversion capacity and the annual output of wheat processing and conversion enterprises have taken the fi rst place in this sector nation-wide. Rapid development of the food industry presents higher requirements for the grain logistics development of the cluster and meanwhile brings greater market potentials.
In recent years, the grain logistics department of certain large industrial and com-mercial enterprises in the food industry of the cluster has been gradually upgraded into independent grain logistics enterprises. COFCO and other large enterprises managed by the Central Government with integrated operational capability of grain logistics chain have started their businesses in Henan. Apart from this, foreign invest-ment and domestic private capitals have been directed toward grain logistics. In this sense, a diversi fi ed investment channel is basically taken shape, carrying the strong potentials of grain logistics development in the cluster.
Being core to the cluster, Zhengzhou has the fi rst national grain wholesale market approved by the State. The market has the online remote transaction capability and serves as a signi fi cant transaction platform of the nation’s grain reserves, grain at the lowest procurement price and other policy-based grains. The platform has integrated e-commerce, warehousing & logistics, fi nancing and settlement and other functions, greatly promoting the informatization development of the grain logistics. Moreover, transportation of bulk grain by truck is prevailing in grain circulations of the cluster; inter-provincial long-distance grain circulation is accomplished in bags by train. Bagged grain transportation suffers lower ef fi ciency at higher cost. Cost of grain logistics from production sites to sales areas account for 20–30% of the sales price.
At present, the cluster has highlighted logistics in ten sectors, such as cold chain, medicine, steel, automobile, household appliance, textile & garment, posts, grain, fl ower, and building material, for future development. The cluster is expected to vigorously develop industry-speci fi c logistics and establish interactions between logistics and manufacturing as soon as possible. Meanwhile, it plans to give priority to developing retail chains, logistics & distribution, e-commerce and other new types of circulation, and to improve logistics services of various urban and rural market systems and to promote the integration of logistics, industries and markets.
This fi rst part of this section gives an overview of the economic development of the Zhongyuan City Cluster. Rapid development of the regional economy and adjustment and upgrading of the industrial structure, and particularly the rapid expansion of consumer goods market, have provided the cluster with favorable economic founda-tions and huge market potentials. The second part describes the main characteristics of logistics development in the cluster, including fast expansion of logistics markets, notable advantages of logistics infrastructures, more concentrated logistics industry, and emergence of backbone logistics enterprises. Particular stress is laid on the status of the cluster as an integrated transportation hub, and the potentials of Zhengzhou to develop into an inland type international logistics center. In the fi nal part, the present conditions of cold chain logistics, medicine logistics, steel logistics and grain logistics in the cluster are illustrated. Furthermore, details are given regarding the interaction of logistics service system with upstream manufacturing enterprises, and downstream circulation enterprises for cold chain logistics enterprises, medicine logistics enterprises, steel logistics enterprises and grain logistics enterprises.
90 P. Chen et al.
4.4 Development Status of Logistics in the Northeast China
The Northeast China is composed of Heilongjiang Province, Jilin Province, Liaoning Province and three leagues and one city (Hulunbeir League, Hinggan League, Zhelimu League and Chifeng City) in the northeast of Inner Mongolia Autonomous Region. However, considering the concept of traditional geographic range, the State’s mindset of developing regional economy, the scope of statistical data and other factors, 13 this section will mainly describe the development of logistics in Liaoning, Jilin and Heilongjiang provinces in China’s northeast region. A map of the three provinces is shown in Fig. 4.21 .
The three northeastern provinces account for 8.26% of the country’s total land area and 8% of the country’s total population, respectively. The Northeast region lies in the
Fig. 4.21 Map of the three Northeastern Provinces
13 In the development mindset of revitalizing the Northeast region’s old industrial base proposed by the State Council in 2002, the Northeast is de fi ned as Liaoning Province, Jilin Province and Heilongjiang Province.
914 China’s Logistics Development in Certain Key Regions
center of Northeast Asia and is an important production base of heavy industry, energy, raw materials, commodity grain, etc. In the middle and late 1980s, due to historical and institutional reasons, the economic development in the Northeast faced adverse conditions. In October 2003, the State issued the Opinions on Implementing the Strategy to Revitalize the Northeast and other Old Industrial Bases by the CPC Central Committee and the State Council to integrate the revitalization of the Northeast into the national development strategy. In recent years, relying on the overall advantage of its solid industrial foundation, well-developed commerce and trading industry, com-plete comprehensive transportation network and high level of urbanization, modern logistics in the Northeast has manifested a trend of accelerated development.
This section comprises three parts. The fi rst part presents in retrospect the eco-nomic development of this region, the second part elaborates on the scale of the logistics market, the construction of transport infrastructures, logistics parks and centers, the development of logistics enterprises, and the establishment of logistics integration. And the third part cites the current status on the interactive development of the manu-facturing industry and the logistics industry, and the development of grain logistics to illustrate the distinctive characteristics of logistics development in the Northeast.
4.4.1 Overview of Economic Development in the Northeast
4.4.1.1 Economic Aggregate of the Region
In 2010, the economy in the Northeast achieved a rapid growth with the regional GDP of the three provinces reaching 3,749.35 billion RMB; this fi gure represents an increase of 20.6% compared with that in 2009, 14 which is higher than the national average growth rate of 17.7%. The regional GDP growth rates of Liaoning Province, Jilin Province and Heilongjiang Province are respectively 21.3, 19.1 and 20.7%, as shown in Table 4.10 .
14 Unless otherwise stated, growth rates of data indicators relating to GDP, gross output value of agriculture, industrial added value, and total volume of import and export trade and so on refer to nominal growth rate; that is, they are computed without considering price changes.
Table 4.10 Regional GDP and growth rate of the Northeastern Provinces for 2009–2010
Province
Regional GDP (billion RMB) Nominal growth rate (%) 2009 2010
Liaoning 1,521.25 1,845.73 21.3 Jilin 727.88 866.76 19.1 Heilongjiang 858.70 1,036.86 20.7 The Northeast total 3,107.82 3,749.35 20.6
Source : Compiled from the Statistical Yearbook (2011) of China
92 P. Chen et al.
4.4.1.2 Total Retail Sales of Social Consumption Goods
The total retail sales of social consumption goods in the Northeast reached 1,443.18 billion RMB in 2010 and increased by 18.6% compared with that in 2009. Of the three provinces, the total retail sales of social consumption goods for Liaoning were 688.76 billion RMB, ranking the highest and accounted for 47.73% of the Northeast total. The nominal growth rates of retail sales of the three provinces were slightly higher than the national rate, as seen in Table 4.11 .
4.4.1.3 Total Volume of Import and Export
Before the outbreak of the global fi nancial crisis, the value of import and export in the Northeast showed a trend of rapid growth and increased from 38.0 billion USD in 2003 to 108.9 billion USD in 2008, averaging an annual growth rate of 24.11%. Although the fi nancial crisis in 2009 caused the Northeast region a signi fi cant decline in the demand for exports, foreign trade recovered gradually with the implementation of the nation’s economic recovery plan. By 2010, total volume of import and export for the Northeast region rebounded to 123.1 billion USD and increased by 35.4% over the previous year. Figure 4.22 shows the yearly change in import and export volume.
Among the three provinces, total import-export volumes of Liaoning Province, Jilin Province and Heilongjiang Province were 80.71 billion RMB, 16.85 billion RMB and 25.52 billion RMB, and increased by 28.25, 43.46 and 57.22% respec-tively compared with those in 2009, as shown in Table 4.12 .
4.4.1.4 Industrial Structure
In 2010, industrial added value of the primary, secondary and tertiary industries in the Northeast reached 398.41 billion RMB, 1,968.72 billion RMB and 1,382.21 bil-lion RMB and increased by 12.24, 26.94 and 15.00% respectively in comparison with 2009. Industrial added value of the three industries accounted for 10.63, 52.51
Table 4.11 The Northeast total retail sales of social consumption goods in 2010
Province
Total retail sales of social consumption goods (billion RMB)
Nominal growth rate (%) 2009 2010
Liaoning 581.26 688.76 18.5 Jilin 295.73 350.49 18.5 Heilongjiang 340.18 403.92 18.7 The Northeast total 1,217.17 1,443.18 18.6 The National total 13,267.84 15,699.84 18.3
Source : Compiled from the Statistical Yearbook (2011) of China
934 China’s Logistics Development in Certain Key Regions
and 36.87% of the regional GDP respectively and the industrial structure exhibits the distinct “secondary-tertiary-primary” pattern as shown in Table 4.13 .
The Northeast is an important production and export base of agricultural and subsidiary products. It achieved a total agricultural output value of 337.64 billion RMB in 2010, which represents an increase of 16.52% compared with that in 2009, and accounting for 9.14% of the national total. In 2010, total agricultural output values of the Northeastern region reached 114.03 billion RMB, 86.69 billion RMB and 136.92 billion RMB, equaling an increase of 24.83, 11.50 and 13.46% respec-tively compared with those in 2009. Table 4.14 shows the details.
The three northeastern provinces are the important production bases of rice, soybean and corn in China and also the important production and export bases of edible vegetable oil. In 2010, the total output of grain in the Northeast reached 96,207 kilotons, which accounts for 17.60% of the country’s total grain output. In particular, the total output of corn and beans reached 54,789 kilotons and 7,518 kilotons and accounted for 30.91 and 39.64% of the national total output respec-tively, as shown in Table 4.15 .
38.048.0
57.1
87.1
108.9
571.07
90.9
123.1
27.5
26.3
18.0 21.1
25.9
25.1
−16.5
35.4
0
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009 2010
Tot
al E
xpor
t-Im
port
Vol
ume
(Bill
ion
US
D)
−20
−10
0
10
20
30
40
Gro
wth
Rat
e (%
)
Total Import-export Volume Growth Rate
Fig 4.22 Total volume of import and export and growth rate of the Northeast for 2003–2010 ( Source : Compiled from the China Statistical Yearbook (2003–2011))
Table 4.12 Total volume of import and export in the Northeastern Provinces in 2010
Province
Total import-export volume (billion USD) Nominal growth rate (%) 2009 2010
Liaoning 62.93 80.71 28.25 Jilin 11.74 16.85 43.46 Heilongjiang 16.23 25.52 57.22 The Northeast total 90.91 123.07 35.38 The National total 2,207.54 2,974.00 34.72
Source : Compiled from the Statistical Yearbook (2011) of China
94 P. Chen et al.
In 2010, the total industrial output values for fi rms above the designated size for Liaoning, Jilin and Heilongjiang were 3,621.94 billion RMB, 1,309.84 billion RMB and 953.52 billion RMB respectively and the growth rates were 28.65, 30.64 and 30.59% respectively. Refer to Table 4.16 for details.
Table 4.15 Production of grain crops in the Northeast in 2010
(Unit: kiloton)
Province Total output of grain Rice Wheat Corn Beans
Liaoning 17,654 4,576 37 11,505 370 Jilin 28,425 5,685 12 20,040 1,129 Heilongjiang 50,128 18,439 925 23,244 6,019 The Northeast total 96,207 28,700 974 54,789 7,518 The National total 546,477 195,761 115,181 177,245 18,965 Proportion in the
entire country 17.60 14.66 0.85 30.91 39.64
Source : Compiled from the Statistical Yearbook (2011) of China
Table 4.14 Total agricultural output value and growth rate in the Northeastern Provinces for 2010
Province
Total agricultural output value (billion RMB) Nominal growth rate (%) 2009 2010
Liaoning 91.35 114.03 24.83 Jilin 77.75 86.69 11.50 Heilongjiang 120.68 136.92 13.46 The Northeast total 289.78 337.64 16.52 The National total 3,077.75 3,694.11 20.03
Source : Compiled from the Statistical Yearbook (2003–2011) of China
Table 4.13 Development of three industries in the Northeast for 2003–2010
Year
Primary industry Secondary industry Tertiary industry
Added value (billion RMB)
Proportion in regional GDP (%)
Added value (billion RMB)
Proportion in regional GDP (%)
Added value (billion RMB)
Proportion in regional GDP (%)
2003 160.35 12.60 657.47 51.68 477.69 37.55 2004 191.86 13.19 781.35 53.72 540.17 37.14 2005 219.26 12.79 850.58 49.62 644.24 37.59 2006 238.67 12.12 1,001.01 50.84 731.84 37.17 2007 283.26 12.12 1,202.41 51.44 851.65 36.44 2008 330.78 11.73 1,494.26 53.00 994.52 35.27 2009 354.98 11.42 1,550.90 49.90 1,201.95 38.67 2010 398.41 10.63 1,968.72 52.51 1,382.21 36.87
Source : Compiled from the Statistical Yearbook (2003–2011) of China
954 China’s Logistics Development in Certain Key Regions
The Northeast has a solid industrial foundation on heavy and chemical indus-tries. In 2010, added value of equipment manufacture in Liaoning Province accounted for 31.8% 15 of its total industrial output values above the designated size. Besides, the metallurgical industry, agricultural product processing industry and petrochemical industry also played a key role in the industry of Liaoning Province. Automobile, petrochemical industry and food industry are vital industries of Jilin Province; in 2010, automobile industry, petrochemical industry and food industry achieved added values of 109.14 billion RMB, 56.54 billion RMB and 59.62 billion RMB and increased by 24.6, 7.8 and 16.6% 16 respectively compared with those in 2009. And in the same year, four leading industries in Heilongjiang Province, viz. the equipment manufacturing, petrochemical, energy, and food industry achieved a total output value of 845.46 billion RMB, which accounts for 85.1% of the prov-ince’s total industrial output values for fi rms above the designated size.
4.4.2 Characteristics of Logistics Development in the Northeast
4.4.2.1 Continually Expanding Scale of Logistics Market
In 2010, the transportation, storage and postal service in the Northeast achieved an added value of 177.01 billion RMB, which increased by 13% compared with that in 2009 and accounted for 9.3% of the national total, as shown in Table 4.17 .
In 2010, the Northeast achieved freight volume of 2,585.27 megatons and increased by 15.4% over the previous year. Highway freight volume reached 2,009.56 megatons and accounted for 77.73% of total freight volume of the Northeast. And volumes of freight by railway and waterway reached 458.96 mega-tons and 116.75 megatons and accounted for 17.75 and 4.52% of total volume respectively. Details by province are shown in Table 4.18 .
15 2010 Liaoning Statistical Bulletin of National Economic and Social Development. 16 2010 Jilin Statistical Bulletin of National Economic and Social Development.
Table 4.16 Gross industrial output value and growth rate of industrial enterprises above designated size for the Northeast in 2009–2010
Province
Total industrial output value (billion RMB) Nominal growth rate (%) 2009 2010
Liaoning 2,815.27 3,621.94 28.65 Jilin 1,002.66 1,309.84 30.64 Heilongjiang 730.16 953.52 30.59 The Northeast Total 4,548.09 5,885.29 29.40 The National Total 54,831.14 69,859.05 27.41
Source : Compiled from the Statistical Yearbook (2003–2011) of China
96 P. Chen et al.
In 2010, throughput volume of freight transport in the Northeast reached 2,121.73 gigatons-km and increased by 14.87%; of which highway volume reached 337.58 gigatons-km and accounted for 15.91% of the total throughput volume of freight transport in the Northeast. The throughput volume of freight transport by railway reached 1,213.75 gigatons-km and accounted for 57.21% of the total; freight volume by waterway reached 570.4 gigatons-km and accounted for 26.88% of the total. Table 4.19 gives the details by province.
Table 4.18 Total freight volume of the Northeast in 2010 (Megaton)
Province Highway freight volume
Railway freight volume
Waterway freight volume
Total freight volume
Liaoning 1,273.61 206.89 104.34 1,584.84 Jilin 330.13 74.90 2.26 407.29 Heilongjiang 405.82 177.17 10.15 593.14 The Northeast total 2,009.56 458.96 116.75 2,585.27 Proportion in the
Northeast (%) 77.73 17.75 4.52 –
Source : Compiled from the Statistical Yearbook (2011) of China
Table 4.19 Total throughput volume of freight transport in the Northeast in 2010 (Gigaton-km)
Province Highway Railway Waterway Total
Liaoning 193.03 902.91 569.57 1,665.51 Jilin 68.31 128.22 0.13 196.66 Heilongjiang 76.24 182.62 0.7 259.56 The Northeast total 337.58 1,213.75 570.4 2,121.73 Proportion in the
Northeast (%) 15.91 57.21 26.88 –
Source : Compiled from the Statistical Yearbook (2011) of China
Table 4.17 Added value and growth rate of transportation, storage and postal service in the Northeast for 2009–2010
Province
2009 2010
Industrial added value (billion RMB)
Nominal growth rate (%)
Industrial added value (billion RMB)
Nominal growth rate (%)
Liaoning 79.06 10.5 92.68 17.2 Jilin 34.18 7.2 37.39 9.4 Heilongjiang 43.36 12.1 46.93 8.2 The Northeast
total 156.59 10.2 177.01 13.0
The National total
1,672.71 2.2 1,896.85 13.4
Source : Compiled from the Statistical Yearbook (2009–2011) of China
974 China’s Logistics Development in Certain Key Regions
In recent years, cargo throughput of the airports in the Northeast grew continually and achieved an average annual growth of 12.45% from 2005 to 2010. In 2010, cargo throughput of the airports reached 407.64 kilotons and increased by 13.77% compared with that in 2009. The number of aircraft takeoff/landing in the airports was up to 291,181, which increased by 10.16% compared with that in 2009; an average annual growth from 2005 to 2010 was16.28%. Table 4.20 gives the annual details.
4.4.2.2 Well-Developed Transport Infrastructures
The railway system in the Northeast are well developed with a railway density 1.87 times that of the national railway network. At the end of 2010, the length of railways in operation in the Northeast reached 14,090 km, increased by 1.36% compared with that in 2009, and accounted for 15.45% of the national total.
By year end of 2010, the total highway mileage in the Northeast reached 343,930 km, increased by 0.85% compared with that in 2009, and accounted for 8.58% of the national total highway mileage; the total expressway mileage reached 6,260 km, increased by 23.12% compared with that in 2009, and accounted for 8.45% of the national total.
Many large ports along the Bohai Sea and the Yellow Sea are located in Liaoning Province, namely Huludao Port, Jinzhou Port, Yingkou Port, Dalian Port, and Dandong Port. Dalian Port and Yingkou Port are the two above designated size ports along China’s coast; in 2010, the length of quay line of the two ports was 51.10 km and the number of berths was 293, increased by 4.98 and 6.16% respectively compared with those in 2009.
The Northeast is a region with a well-developed aviation industry. In 2010, there were totally 25 airports, which accounts for 14.29% of the total 175 air-ports nationwide. In the same year, cargo throughput of airports in the Northeast was 407.64 kilotons and accounted for 3.61% of the national total, and the number of takeoff/landing reached 291,180 times and accounted for 5.28% of the national total.
Table 4.20 Cargo throughput and aircraft takeoff/landing of civil aviation in the Northeast for 2005–2010
Year
Cargo throughput Aircraft takeoff/landing
Total (kiloton) Growth rate (%) Number Growth rate (%)
2005 226.66 6.87 136,958 9.65 2006 274.33 21.03 172,620 26.04 2007 310.32 13.12 197,538 14.44 2008 331.62 6.87 225,297 14.05 2009 358.29 8.04 264,320 17.32 2010 407.64 13.77 291,181 10.16
Source : Compiled from the Statistical Bulletin of Civil Aviation Airport Production (2005–2010)
98 P. Chen et al.
4.4.2.3 Construction of Logistics Parks
In recent years, Shenyang city of Liaoning Province has focused its logistics infrastructure development effort on a number of construction projects. These include the Northeast Asia Logistics Center, the Shenhai Comprehensive Logistics Park, the Shenxi Manufacturing Logistics Park, the Shenbei Comprehensive Logistics Park, the Sutao Road Logistics Agglomeration Belt, the Tiexi Steel Logistics and Automobile Trade Agglomeration Zone, and the Hunnan Compre-hensive Logistics Park. Jilin Province, building on its manufacturing base and comprehensive transportation hub, has focused on promoting the construction of the Changchun Airport (land port), the Jilin Inland Port Logistics Park, the Tonghua Inland Port Comprehensive Logistics Park and some other 12 compre-hensive logistics parks.
With the intention to further expand the opening-up of the Northeast and improve the international competitiveness of the Northeast China Economic Region, the Government has successively approved the construction and operation of several comprehensive bonded port areas and bonded logistics centers in recent years. Shenyang Bonded Logistics Center was approved in February 2009 and came into operation in October. Heilongjiang Suifenhe Comprehensive Bonded Zone, the unique special area under the Customs’ supervision, was established with the approval in April 2009 and came into operation in August 2010, upon passing the inspection and acceptance by ten Government ministries. And in 2010, Yingkou Port Bonded Logistics Center passed the joint inspection and acceptance by the General Administration of Customs and three other ministries and came into operation.
4.4.2.4 Development of Logistics Enterprise
A diversi fi ed tri-pillar pattern of logistics supply, composed of State-owned, foreign-funded and private enterprises has formed in the Northeast. DHL, UPS, Maersk and many other renowned international logistics enterprises set up branches in the Northeast, or engage the Northeast as a key region of business development. China Ocean Shipping (Group) Company (COSCO), China Shipping (Group) Company (China Shipping), China Merchants Group, P.G. Logistics Group Co., Ltd. and other large State-owned logistics enterprises have strengthened their cooperation with the local ports or logistics enterprises and developed the compre-hensive logistics business in the Northeast. Meanwhile, private logistics enterprises also fl ourished and some private logistics enterprises like JC Trans Group Co., Ltd., Lujie Logistics Co., Ltd., Changjiu Logistics and Jiutian Logistics Co., Ltd. have started to develop comprehensive logistics services. Logistics enterprises in the Northeast have attended to foster the long-term cooperation with customers in the manufacturing industry and to meet their logistics needs through innovative service modes. For example, Liaoning Zhonglian Logistics Co., Ltd. uses the Shenbei Automobile Logistics Park to provide integrated logistics services for the automobile manufacturers.
994 China’s Logistics Development in Certain Key Regions
4.4.2.5 Gradual Promotion of Regional Logistics Integration Construction
The process of regional logistics integration in the Northeast has been accelerating over the years. In 2005, Harbin of Heilongjiang, Shenyang and Dalian of Liaoning and Changchun of Jilin invited Anshan of Liaoning, Changchun of Jilin and Qiqihaer of Heilongjiang to attend the City Summit of the former four cities, formulated and signed the Agreement on Strategic Cooperation in Joint Acceleration of Logistics Development . In 2008, the Northeast City Logistics Alliance sponsored by Harbin, Shenyang, Dalian and Changchun was formally established. The Alliance has facil-itated the sharing of logistics infrastructures, information, human talents and other resources in the Northeast through the exchange, communication and cooperation among city governments, and hence promoted the logistics development in the Northeast. In September 2009, the State Council issued the Opinions on Further Implementing the Strategy to Revitalize the Northeast and other Old Industrial Bases , which clearly speci fi ed the promotion of regional integration development, aiming to “organize and develop the cooperation in integrating tourism, logistics, transportation and technology in the near future.” It also proposed to “establish chief administrators’ coordination mechanism of the four northeastern provinces, periodically study and coordinate the construction of major inter-provincial infra-structure facilities, industry layout, as well as regional coordinated development.” In 2010, the “Northeast Asia Logistics Cooperation and Development Forum” pro-posed to build a uni fi ed logistics standard for establishing regional logistics devel-opment platform, accelerating logistics informationization construction and achieving resource sharing. All efforts shall be made to establish a world-leading logistics information exchange platform and information hub and achieve logistics information sharing and information exchange integration in 5 years.
4.4.3 Development of Logistics for Key Industries
4.4.3.1 Interactive Development of the Logistics and Manufacturing Industries
Promotion of the “Dual-Industry Interactive” Development of Key Industries
As a heavy industrial base, the Northeast attaches great importance to the interactive development of the manufacturing and logistics sectors. The local governments have issued a series of plans, policies and measures to promote the interactive development of logistics and manufacturing in conjunction with the development of key industries. The Shenyang Modern Logistics Industry Development Plan ( 2008–2012 ) put for-ward the construction of eight logistics agglomeration zones. Some logistics parks were built speci fi cally for industrial development and improvement. For instance, Shenxi Manufacturing Logistics Park was built speci fi cally to provide support for the development of equipment manufactures and Tiexi Steel Logistics and Automobile
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Trade Agglomeration Zone aimed mainly to serve equipment manufactures and automobile producers. And many other cities in the Northeast also took advantage of their competitive industries to promote interactive development of the two industries. For example, Qiqihaer of Heilongjiang and Dalian of Liaoning focused on the devel-opment of logistics outsourcing industry relating to the equipment manufacturers; Changchun of Jilin, Harbin of Heilongjiang and other cities established automobile logistics centers to promote the interactive development of the automobile and the logistics industries. Daqing of Heilongjiang, relying on its rich oil and gas resources, put emphasis on developing petrochemical industry logistics system and establishing logistics center of petroleum and petroleum products.
To promote the interactive development of logistics and manufacturing, all prov-inces and cities adopted series of measures to optimize the environment for interac-tive development. Shenyang established the comprehensive service platform and information platform of manufacturing enterprises and logistics enterprises, formu-lated the interaction speci fi cations and standards for the two industries, and set up the system for logistics statistical indicators. It also intensi fi ed the operational mon-itoring of industry development, provided the scienti fi c basis for dual-industry interactive development. It further established the of fi ce of task force group for logistics development, and designated the Municipal Development and Reform Commission as the leading agency in charge of coordinating and solving the speci fi c problems encountered in the dual-industry interaction.
Main Modes of Logistics and Manufacturing Interactive Development
Logistics parks are the important carrier for driving logistics and manufacturing interactive development, so all government sectors attach great importance to this carrier and use the planning and construction of logistics parks to drive the dual-industry interactive development. For example, some logistics industrial conglom-erates stated in the Shenyang Modern Logistics Industry Development Plan ( 2008–2012 ) are set up for the purpose of providing supporting services for the manufacturing enterprises. And the most typical case is by the Anshan city which established logistics parks to promote the interactive development of iron and steel manufacturing and logistics.
Anshan is an important iron and steel industrial base of China. In 2009, output of iron, steel and rolled steel of Anshan Iron and Steel Group Corporation reached 20.51 megatons, 20.13 megatons, and 18.99 megatons, 17 respectively. In recent years, the mode of steel and iron circulation has transformed from low-level and decentralized management to the modern circulation, featuring all-inclusive service functions and high concentration. Speci fi cally, the portion of iron and steel manu-facturers supplying products directly to the customers is gradually expanded, while
17 Output of ship plates of Anshan Iron and Steel Group Corporation was about 2.4 megatons in the last year [N]. China Ship News, January 16, 2010.
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that of the middleman supplying in single trade is reduced considerably, and the share of steel processing and delivery through modern circulation channel is increased substantially. Using the added value of logistics links to enhance the industry’s development has become the trend for the iron and steel industry. To take advantage of this development trend for the iron and steel industry, the Anshan city government established a large Northeast Iron & Steel Logistics Market in Dadaowan Industrial Zone, on the west side of Anshan, covering a planned area of 7 km 2 . And it also constantly upgraded the service functions of its logistics parks and sped up the integration operation of business fl ow, material fl ow, information fl ow and capi-tal fl ow in line with the modern logistics developmental pattern.
Response to Manufacturers’ Demand Through Innovative Service Mode
More logistics enterprises are providing integrated logistics services based on the platform of logistics parks. In 2008, Liaoning Zhonglian Logistics Co., Ltd. invested in the construction of Shenbei Automobile Logistics Park in Shenbei New District; the phase I project took up an area of 370,000 m 2 in a reserved lot of 32.95 acres. The park has a distribution center for fi nished vehicles, storage center, parts manu-facturing center and container yard. And relying on Shenbei Automobile Logistics Park, Liaoning Zhonglian Logistics Co., Ltd. adopts the business mode of integrat-ing “self-managing, subcontracting and collaboration,” to cooperate with BMW Brilliance, Brilliance Jinbei, Shanghai GM, Nissan, Dongfeng Honda and many other main engine plants, and to provide Shanghai GM (Shenyang) Beisheng Motor Co., Ltd. with storage of spare and accessory parts. Liaoning Zhonglian Logistics Co., Ltd. not only serves a single link or module of the logistics industry but also actively explores value chain service for automobile logistics. For instance, it pro-vides all-around service to the EW project of BMW Brilliance, including storage, operation, assembling, processing, etc.
The “Transfer Sales Model” of Itochu Corporation
Another example of innovative service mode is the “transfer sales model” the Itochu Corporation provides to the Shenyang North Traf fi c Heavy Industry Group. In this model, Itochu stores the goods of its customers at nearby con-tracted ports and piers, railway transport depots and port transport yards in China and other countries, based on its customers’ order-shipping time, commodity type and quantity. The model helps to ensure timely ful fi llment and transport of products, and reduce the customers’ cost of procurement and transportation. Under this arrangement, the North Traf fi c Heavy Industry Group can directly take delivery of goods from the ports, thus shortening its delivery cycle and reducing the logistics cost. After 1 year of trial operation, the two parties attained highly signi fi cant cooperation bene fi t in 2010; the Group’s capability in produc-tion, R&D, as well as the speed for order ful fi llment are all improved considerably.
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Savings to the Group in raw materials procurement cost, transportation cost, personnel expenses, vehicle maintenance cost and production operating capital amounted to 53 million RMB, 2.8 million RMB, 2.17 million RMB, 0.3 million RMB and 5.8 million RMB, respectively. And the production cycle is shortened by 23% on average, the turnover rates for stocks and fi nished goods are lifted and the inven-tory costs is reduced by 33%.
Innovation of Logistics Operation Mode in Manufacturing to Improve Competitive Strength
The Huachen Auto Group has a widely-dispersed base of parts suppliers and desires to ensure that parts are replenished on schedule and in the right amount. It adopts a hybrid mode of managing its parts by entrusting to a third party fi rm in conjunction with its own online inventory management. Under this arrangement, the suppliers deliver the parts and components to the third-party logistics company, the third-party logistics company is responsible for gathering the parts as per production plan and dispatching them to the front-end distribution center of the production lines, and then the logistics department of the enterprise will deliver the needed parts to the production lines in accordance with the production schedule. This mode of par-allel operation has effectively improved Huachen’s logistics service level and opera-tional ef fi ciency; it also raised its suppliers’ on-time delivery rate to over 95% and trimmed the delivery cost by over 10%.
Graded Suppliers Administration and Vendor Managed Inventory Model
In 2008, Shenyang Machine Tool Co., Ltd. realigned its upstream resources, rede fi ned its stance in procurement to the form of “transport logistics + ware-house logistics + procurement information fl ow + capital fl ow = procurement logistics,” and sought an integrated solution from this pattern. The company established a special supply chain management department for integration of the supplier’s resources and that of procurement logistics. The concrete steps taken involve dividing the suppliers into four levels, viz., A, B, C and D based on their importance and adopting corresponding measures for each level to achieve the integration of the supplier’s resources. Through consultations and negotiations, Shenyang Machine Tool Co., Ltd. established a strategic win-win relationship with its key suppliers, set up a complete collaboration system to actualize the integrated supply chain synergistic relationship and a vendor managed inventory model. At present, the Shenyang Machine Tool Co., Ltd. has developed more than 100 VMI suppliers, which accounts for about 15% of the total suppliers; the monthly inventory of materials on consignment reached over 60 million RMB and the monthly withdrawal amount was more than 35 million RMB, which accounts for over 10% of the total current procurement expenditure.
1034 China’s Logistics Development in Certain Key Regions
4.4.3.2 Development of Grain Logistics
The Northeast is the largest commodity grain base of China and the main outlet for the practice of “shipping grain from the North to the South.” In 2008, the outbound inter-province grain transport from the region reached 53.70 megatons, a volume which accounted for 40% of the nation’s cross-province grain circulation. In the same year, the volumes of outbound shipment of corn, rice and bean from the Northeast were 33.16 megatons, 12.14 megatons and 5.79 megatons, respectively, accounting for 95.14% of the total outbound volume of grain from the Northeast.
In recent years, with the development of grain processing industry, both the amount of grain processed locally and the proportion of processed grain transported outward increased with years. In 2008, the amount of processed corn, rice and bean reached 21.38 megatons, which accounts for 41.85% of the nation’s total outbound amount of the three items. With the implementation of the Plan to Increase Grain Production Capacity by 100 Billion Tons Nationwide ( 2009–2020 ) , the aggregate grain production capacity of the Northeast has increased steadily. As predicted, in 2020, the Northeast grain yield and the amount of outbound cross-province grain shipment will be increased up to 136 megatons, 65.70 megatons, respectively.
At present, there are three main modes or routes for outward transport of the Northeast grain: the fi rst one refers to the transport by railway access to the area inside Shanhaiguan Pass, 18 mainly for packaged raw grain and processed grain; the second one refers to the railway-river combined transport access to Huludao Port, Jinzhou Port, Yingkou Port, Dalian Port and Dandong Port, mainly for bulk grain and also for some packaged grain transported by cross-sea ferries; the third one refers to the trans-port by highway access to the northeastern ports or the Beijing-Tianjin region.
To promote the development of grain logistics, in recent years, the Northeast region carried out a number of mega-projects concerning grain logistics system, so as to strengthen the construction of grain storage logistics facilities and improve the capability of outbound grain transportation. In the past 3 years, the total capacity of special port facilities newly built and expanded for bulk grain reached about 1 mega-ton and the capacity of bulk grain unloading facilities of trains, vehicles and ships reached 4.4 kilotons/h. In particular, after the fourth quarter of 2008, with the imple-mentation of the measures to cope with the fi nancial crisis and the policies of boost-ing domestic demand, the State provided substantial aid to the construction of grain storage facilities in the Northeast, which helped to alleviate the shortage of grain storage capability to some extent. And in 2009, Jilin Province invested a total of 250 million RMB in providing grain-drying capacity of 3.05 million kilotons; it also promoted 30,000 sets of modern granaries among peasants to mark the full com-mencement of Jilin’s safe grain storage project. 19
18 Qinhuangdao-Shanghaiguan Pass-Liaoning Province is taken as the boundary of dividing the area inside and outside the pass. Where the area inside Shanghaiguan Pass refers to the region to the west of Shanghaiguan Pass. 19 Strengthening of Grain Storage Construction in Major Grain Producing Areas of China.
http://news.xinhuanet.com/fortune/2010-03/27/content_13256660.htm
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In November 2009, the project of Northeast Agricultural Logistics City covering an area of 3.2 km 2 was commenced in Tieling of Liaoning. This project comprises grain trading market, agricultural machinery market, agriculture capital market, processed agriculture products market and ultra-large grain and agricultural prod-ucts warehouse and distribution center with the capacity up to 1 megatons. After completion, this agricultural logistics city will become the largest modern agricul-tural products trading base and logistics center in the Northeast. And in 2010, the grain logistics transshipment platform of Heilongjiang Nongken Beidahuang Business Trade Liability Group Co., Ltd. began operation; the annual total through-put volume of grains of this logistics center would reach 2 megatons, thus creating a convenient, speedy and ef fi cient channel for sending the grains from Beidahuang to the South.
This section describes the development of logistics in the Northeast region with respect to its economic development and characteristics of logistics development. On the economic development of the Northeast, the regional economic aggregate, total social consumption goods and import and export trade have had a substantial growth due to the effect of the State’s recent laxer monetary policy and the expan-sion of fi scal policy. As for the characteristics of the region’s logistics development, the scale of logistics market in the Northeast has been expanding continually, its logistics and transport infrastructures, especially railway infrastructures are well developed and the construction of logistics parks has been highly promoted. Propelled by the government’s efforts and the regional economic integration, the regional logistics integration process is also accelerated. Furthermore, the Northeast is the heavy industry base and grain base of China, its manufacturing logistics and grain logistics have achieved rapid development, and in turn advanced the manage-ment and operational capabilities of these two types of logistics enterprises.
105B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_5, © Springer-Verlag Berlin Heidelberg 2013
In the fi rst volume of this series, the Contemporary Logistics in China: An Introduction, three logistics sectors- chain retail, automobile and petroleum were chosen as examples of segmented markets, and analyzed to give details about the development characteristics, problems and development trend of logistics markets in these sectors. By following the same principles and intentions, this present chap-ter selects three other sectors as the particular subjects for discussion. The three sections of this chapter deal with the development of fresh agricultural product logistics, the coal logistics and the express logistics in China.
China has a vast territory and a large population. A huge amount of fresh agricultural products are produced and consumed each year. Due to the products’ perishable nature, their logistics characteristics differ greatly from those of other commodities handled under normal temperature; specialized logistics operations are needed. The fi rst section presents an overview of consumption characteristics and distributions of fresh agricultural product markets in China, followed by a discussion of the current situations, problems and the development trends of fresh agricultural product logistics.
Being the largest coal production and consumption country in the world, coal logistics has taken a prominent place in the bulk commodity logistics markets. In the second section, basic features and main operating models of China’s coal logistics are illustrated fi rst. Then the current situations of coal logistics, including
Z.-l. Jiao (*) • J.-h. Xiao Logistics Research Center , Nankai University , No.94 Weijin Rd. , Nankai District , Tianjin , 300071 , P.R. China e-mail: [email protected]; e-mail: [email protected]
F. Qin Department of Logistics Management, Nankai University, No.23 Hongda Street, Economic-Technological Development Area , Tianjin 300457 , P.R. China e-mail: [email protected]
Chapter 5 Logistics Development in Some Key Industrial Segments
Zhi-lun Jiao , Jian-hua Xiao , and Fan Qin
Z.-l. Jiao, J.-l. Xiao, and F. Qin are co-fi rst authors, each contributing one Section of the Chapter.
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channels for coal logistics, coal logistics park and logistics resource integration of coal enterprises, are detailed. Finally, problems and trends of China’s coal logistics are analyzed.
Driven by rapid development of both international trade and e-commerce in recent years, China’s express delivery market has evolved at high speed. In 2011, the scale of China’s express delivery market ranked third worldwide after the US and Japan. Express delivery service is known as a segmented logistics market with extremely high specialization. The evolution, main types, management system and policy environment of express logistics in China are fi rst introduced in the third section. Then the market scale, pattern of market competition, service capacity of express enterprises and regional features of express delivery markets are analyzed. Finally, problems and trends of China’s express delivery market are discussed.
Readers will fi nd the choice and treatment of these three segmented markets most relevant to the daily lives of the general population in China.
5.1 Development of Fresh Agricultural Products Logistics in China
Along with the continuing economic development, the residents’ household consumption level has also been raised. The demand for fresh agricultural products in China increases with years, and so is the attention paid to the quality and safety of these products. Since fresh agricultural products are perishable, the level of logistics operations required for these products is higher than that for general commodities. The improvement of logistics capability for fresh agricultural products can, on the one hand, reduce their rate of deterioration and ensure their quality in the process of circulation, and on the other hand, balance their availability in various regional markets and help maintain price stability.
This section comprises fi ve parts. The fi rst one presents the consumption charac-teristics of fresh agricultural products in China, the second one describes the circu-lation mode of fresh agricultural products, and the remaining three parts respectively discuss the current development, existing problems and development trend of fresh agricultural products in China.
5.1.1 Consumption Characteristics of Fresh Agricultural Products in China
Fresh agricultural products are un-processed or slightly processed and cannot be kept at normal temperature for prolonged period. These include mainly fresh vege-tables, fruits, fresh aquatic products, livestock, fresh meat, eggs and milk. Logistics for fresh agricultural products refer to the process of transferring fresh agricultural products from the supplying origins to the receiving destinations; the process
1075 Logistics Development in Some Key Industrial Segments
comprises links such as transportation, storage, loading/unloading, handling, packaging, distribution processing, dispatching, and information processing.
With the rapid growth of national economy in China, the consumption level of fresh agricultural products by the populace increases continually, and the consumption characteristics of fresh agricultural products also changed gradually. The shift in demand for fresh agricultural products affects its logistics operations and also promotes the improvement of its operations level and operational ef fi ciency. The consumption characteristics of China’s fresh agricultural products are mainly as follows.
5.1.1.1 Continual Rise in Price
The price of fresh agricultural products fl uctuates rather easily in the consumption market. For example, a drop in vegetable yields or an occurrence of severe weather condition in the production site or an impeded transport logistics link can easily cause the reduction in supply of vegetables to the cities and results in a price. Since the second half of 2010, the price of fresh agricultural products in China has shown a continuous rising trend. According to the data (as shown in Fig. 5.1 ) published by the National Bureau of Statistics of China, from January 2010 to August 2011, the price of poultry and their products, fresh vegetables and fresh fruits generally maintained a upswing trend. The consumer price index (CPI) by category of these products, compared with that in the same period of the previous year, was predomi-nantly above 100. In the fi rst half of 2011, the increase in price of poultry and their products exceeded more than 10% (with a price index above 110), compared with that in the same period of the previous year, and the rate of increase exhibits an upward trend. Part of the factors causing the rise in the price of agricultural products was due to the increase in logistics cost driven by the rise in fuel price.
80
90
100
110
120
130
140
1
2011
3 5 7 9 11 1
2012
3 5 7 8
Month
Con
sum
er P
rice
Ind
ex
Poultry and their products Fresh vegetables Fresh fruit
Fig. 5.1 Monthly data of consumer price index of some fresh agricultural products in China from January 2010 to August 2011
108 Z.-l. Jiao et al.
5.1.1.2 Gradual Change in Demand Structure
In recent years, the consumption structure of fresh agricultural products has undergone a gradual and steady change. First, demand for fresh agricultural products of the populace has transitioned from the previous state of acquiring adequate food to the current pursuit of freshness, nutrition and health. Second, the speed of increase in demand of fresh agricultural products has exceeded that of the basic grain products. Third, another change in the consumption structure of agricultural products is that high-quality agricultural products with special characteristics are popular in the market, even though their prices are higher than that of more common agricultural products. For instance, high-quality, high-grade and gift-box packaged agricultural products with regional characteristics are favored in the holiday gift market. In 2010, the sales volume of vegetables packaged in gift boxes in Xinfadi Wholesale Market – the largest wholesale market for agricultural products in Beijing, reached 1.35 million boxes in 15 days before the Spring Festival, and accounted for over 10% of the total sales volume of all vegetables in the same period. These changes in demand structure prompted much higher requirements for the operations of fresh agricultural products logistics, including shortened process time, improved preser-vation level and packaging level, etc. The improvement of market consumption level also propelled the development of fresh agricultural products logistics in China towards higher technology and higher added value.
5.1.1.3 Raised Safety Requirements
Since 2000, several food safety incidents with damaging publicity have been exposed one after another and alarmed the general public about the quality and safety issues of fresh agricultural products. Since logistics operation is an important link in the supply chain, accelerating the development of fresh agricultural products logistics has become a critical avenue for improving the freshness and quality, and assuring food safety. In August 2010, the METRO supermarket chain in Shenyang took the lead in launching the “ Star Farm” series agricultural products with trace-ability code, including fruits, vegetables, chilled meat products, sea food products. These fresh agricultural products came with fi xed fully-closed or semi-closed pack-ages accompanied with bar codes for traceability. Consumers can visit the Company’s website to inquire by code, and obtain information relating to the products. Such a transparent logistics process strengthens the safety level of fresh agricultural products through its circulation linkages.
5.1.2 Circulation Modes of Fresh Agricultural Products in China
There are four main circulation modes for fresh agricultural products in China, viz. self-marketing, wholesale market, direct delivery, and processing & sales.
1095 Logistics Development in Some Key Industrial Segments
The manner and level of operations of fresh agricultural products logistics vary greatly under different circulation modes. The four circulation modes are described as follows.
5.1.2.1 Self-Marketing Mode
The self-marketing mode means that the farmers sell their own agricultural products in farmer’s markets at the origin. This mode still exists in the farmer’s markets of many counties and townships. Under this mode, the main logistics activities and logistics functions are mostly accomplished by the farmers, so the scale of circula-tion is small and there are few intermediate links. This logistics operating mode lacks the logistics technology in preservation and packaging for processing, so products have a relatively small radius of logistics span, and comparatively low added value of logistics. The agricultural products logistics process of self-market-ing mode is shown in Fig. 5.2 .
5.1.2.2 Wholesale Market Mode
The wholesale market mode means that after harvesting of fresh agricultural products, distributors of agricultural products purchase them from scattered farm-ers or wholesale markets (near production site of agricultural products) at the origin and then transport and sell them in wholesale markets (near the large cities with concentrated demand for agricultural products) in the marketplace. In this process, the wholesale markets, as the main logistics nodes, play the pivotal role in products collection and dissemination. This form is currently the main mode of circulation of agricultural products in China; the main players of logistics in this mode include the intermediaries or sellers purchasing fresh agricultural products, agricultural companies, wholesalers, and retailers, so it takes relatively longer time for products to be sold to the fi nal consumers. Due to the backward condition of the facilities in most agricultural products wholesale markets, the logistics operations are carried out predominately at normal temperature; the low level of preservation technology causes severe deterioration problems to the fresh agricultural
FarmerFarmer's market
at the originConsumer
Farmer
Farmer
Consumer
Consumer
Fig. 5.2 The self-marketing mode of agricultural products logistics process
110 Z.-l. Jiao et al.
products. The speci fi c logistics process in wholesale market mode is shown in Fig. 5.3 .
5.1.2.3 Direct Distribution Mode
The direct distribution mode refers to the operating mode of directly transporting fresh agricultural products from production base of agricultural company (or via distribution center) to point-of-sale terminal with support from professional infor-mation system and transportation system. Under this mode, logistics service is generally provided by the third-party logistics provider, and point-to-point direct cooperation is achieved in the whole logistics process. This mode involves fewer logistics links, leading to shorter distribution time and lower deterioration rate of agricultural products through the logistics process. Currently the Government is taking measures to encourage the development of direct distribution circulation mode, and the Ministry of Agriculture provides direct support to more than 2,000 specialized farmer’s cooperatives to foster the direct cooperation of production and sales with supermarkets in the forms of “farmers and supermarkets linkage” and “made-to-order farming.” 1 In this way, the third-party logistics providers can make
Farmer
Farmer's marketat the origin
Production base
Who
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arke
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lemarketin the
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Farmer's marketin the marketing
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Hotel, restaurant, etc.
Supermarket andspecialty store
Con
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Fig. 5.3 The wholesale market mode of agricultural products logistics process
1 “Farmers and supermarkets linkage” means that agricultural producers or agricultural cooperative organizations sign contract directly with the supermarkets or other retail terminals with large demand and dispatch fresh agricultural products they produced directly to retail markets. “Made-to-order farming” means that the agricultural producers or agricultural cooperative organizations determine the varieties of products to be produced or collected in advance according to the require-ments of the supermarkets or other retail terminals. The two methods are carried out based on the practice of information sharing at the upstream and downstream of the supply chain.
1115 Logistics Development in Some Key Industrial Segments
the most of the scale effect and the professional advantage of logistics distribution. They can also effectively transmit the demand information to the producers to reduce the circulation linkages. The speci fi c logistics process in direct distribution mode is shown in Fig. 5.4 .
5.1.2.4 Processing & Sales Mode
Proper processing of fresh agricultural products can extend their preservation period and alleviate the problems from long-distance sales and out-of-season supply, so as to reduce the deterioration loss and boost their added value. Meanwhile, appropriate processing of primary agricultural products also extends their value chain, expands sales territory and creates favorable conditions for international trade. Processing & sales mode refers to the process of purchasing, storing and transporting fresh agricultural products by food manufacturers. The operating entities of this mode, besides the agricultural producers, the wholesale markets and the distributors, are in particular, the third-party logistics enterprises or food processing enterprises which perform primarily the logistics operations. The processing & sales mode also comprises export processing, which involves logistics agents such as the Customs, international transport enterprises and foreign customers. The speci fi c logistics pro-cess in processing & sales mode is shown in Fig. 5.5 .
Pro
duce
r
Distribution center
Sup
erm
arke
t and
spe
cial
ty s
tore
Con
sum
er
Fig. 5.4 The direct distribution mode of agricultural products logistics process
Producer
Wholesalemarket
Pro
cess
ing
oper
atio
n
For
eign
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tom
er
Customs Inte
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iona
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rtDistributor
Domesticconsumer
Fig. 5.5 The export processing type of agricultural products logistics process
112 Z.-l. Jiao et al.
5.1.3 Status of Development of Fresh Agricultural Products Logistics in China
Logistics for fresh agricultural products has evolved to re fl ect the changing market demand conditions, logistics and information technology and business environment. It has received greater attention from consumers, enterprises, and governments. The current status of its development is given in the following discussion.
5.1.3.1 Enlargement in the Scale of Collection and Distribution
Through active promotion by the Chinese Government, 2 the course of industrial-ization of China’s agriculture has been accelerated; t rational regional layout of agricultural production and establishment of industrial zone for advantageous agricultural products have also achieved substantial results. The production of fresh agricultural products in China is gradually converging towards advanta-geous regions, and scattered local production patterns are gradually been inte-grated. For instance, in 2007, the concentration of growing area for apple and that of orange in China reached 50.7 and 54%, respectively. Advantageous region of dairy cow comprises Inner Mongolia, Heilongjiang, Hebei, Shanxi, Beijing, Tianjin and Shanghai, and the cow population in these areas accounted for 50% of the national total. The pattern of export-advantaged aquatic product breeding zones is forming in the southeast coast, the Yellow Sea and Bohai Sea, while the high-quality fresh-water crab breeding zone is taking shape along the middle and lower section of the Yangtze River. The concentration of breeding area for Pseudosciaena crocea , tilapia and eel has exceeded 80%. 3 The distribution of main origins of certain fresh agricultural products in China is presented in Table 5.1
Since 2000, the construction of infrastructures for wholesale markets of agricul-tural products has been improved gradually, the operating management level has been raised continually, the trading volume and business transactions volume of wholesale markets for agricultural products have increased markedly, and the con-glomeration of all agricultural products in wholesale markets has also been raised greatly. Up to 2008, there were more than 4,500 wholesale markets for agricultural products in China and the volume of annual transaction was about 833.02 billion
2 The Chinese governm ent successively issued the Plan on Distribution of National Advantaged Agricultural Product Regions (2008–2015) , the Plan on Distribution of National Characteristic Agricultural Product Regions (2006–2015) and other related plans and provides various support to promote the scale and industrialized development of China’s agriculture. 3 Plan on Distribution of National Advantaged Agricultural Product Regions (2008–2015) , the Ministry of Agriculture. http://www.china.com.cn/policy/txt/2008-09/12/content_16441571.htm . September 4, 2008.
1135 Logistics Development in Some Key Industrial Segments
Table 5.1 Distribution of main origins of certain fresh agricultural products in China
Category of agricultural products Distribution of main origins
Apple There are two main production regions, viz. Bohai Bay and Loess Plateau: (1) Bohai Bay – located in Jiaodong Peninsula, Tai – Yi mountain area, some areas in southern Liaoning and western Liaoning, Yanshan Mountain, and low hills in Taihang Mountains; (2) Loess Plateau – mainly located in north Weihe River area of Shaanxi and southern areas of northern Shaanxi, the south and middle of Shanxi, Sanmenxia area of Henan and the east and south of Gansu
Orange There are fi ve main production regions: (1) the upper and middle sections of Yangtze River; (2) southern Jiangxi – southern Hunan – northern Guangxi; (3) Zhejiang – Fujian – Guangdong; (4) western Hubei – western Hunan; (5) distinctive orange production base. Among them, orange advantaged regions in the upper and middle sections of Yangtze River are located in the riverine area to the west of Zigui, Hubei and the east of Yibin, Sichuan and centering on the reservoir area of Three Gorges in Chongqing
Dairy cow There are four main production regions: (1) 17 suburbs and counties under the jurisdiction of Beijing, Shanghai and Tianjin; (2) 117 counties of Heilongjiang, Liaoning and Inner Mongolia; (3) 111 counties of Hebei, Shanxi, Henan and Shandong; (4) 68 counties of Xinjiang, Shaanxi and Ningxia
Live pig There are four main production regions: (1) 55 counties of Jiangsu, Zhejiang, Guangdong and Fujian; (2) 30 counties of Jilin, Liaoning and Heilongjiang; (3) 226 counties of Hebei, Shandong, Anhui, Jiangxi, Henan, Hubei and Hunan; (4) 126 counties of Guangxi, Sichuan, Chongqing, Yunnan and Guizhou
Exported Aquatic Product There are three main production regions: (1) exported aquatic product breeding zone in the Yellow Sea and Bohai Sea, including Tianjin, Hebei, Liaoning and Shandong; (2) exported aquatic product breeding zone in the southeast coast, including Zhejiang, Fujian, Guangdong, Guangxi and Hainan; (3) exported aquatic product breeding zone in Yangtze River basin, including Jiangsu, Anhui, Jiangxi, Hubei, Hunan, Chongqing and Sichuan
Source : Compiled from the Plan on Distribution of National Advantaged Agricultural Product Regions (2008–2015) , published by the ministry of agriculture. http://www.china.com.cn/policy/txt/2008-09/12/content_16441571.htm . September 4, 2008
RMB; among them, 1,551 markets were above designated scale (with annual sales above 100 million RMB). In 2009, the trading volume of agricultural products in wholesale markets nationwide accounted for over 70% of the total consumption of agricultural products. Table 5.2 presents a list of top ten agricultural products general markets ranked by trade volume.
114 Z.-l. Jiao et al.
5.1.3.2 Establishment of the Green Channel Network
With the gradual expansion of main production regions of various agricultural products and the collection and distribution scale of priority industrial belt, an emerging con fi guration of regional agricultural markets has emerged gradually. On this basis, the Government formulated measures to prioritize the transporting of fresh agricultural products across the country, forming a fresh agricultural products logistics channel with large transport volume and smooth process, so as to ensure that the supply of agricultural products meets the daily need of the citizens. In January 2005, multiple of fi ces of the Central Government jointly formulated the Implementation Plan on Construction of National “Green Channel” for Ef fi cient Circulation of Fresh Agricultural Products for the purpose of improving trans-regional circulation ef fi ciency of fresh agricultural products. The “green channel” network for circulation of fresh agricultural products, comprising fi ve longitudinal channels and two transverse chan-nels, covers 31 provinces (regions and cities) nationwide with a total mileage reaching 27,000 km, began full operation in January 2006. The diagram of this “5 + 2” green channel network for fresh agricultural products is shown in Fig. 5.6 .
To further promote the construction of logistics channels for fresh agricultural products, the State Council issued the Notice to Stabilize Overall Level of Consumption Price to Protect Basic Livelihood of the People by the State Council in November 2010 and began implementing much laxer transportation policies for agricultural products. As required, from December 1, 2010, vehicles legally and fully loaded with fresh agricultural products are exempt from tolls on all toll-roads; the same exemption policy also applies to some fresh agricultural product transport vehicles carrying other agricultural products, and to vehicles overloaded within the range of reasonable measurement error. This policy of “green channel” plays a very signi fi cant role in reducing the logistics transaction cost and accelerating the circu-lation of fresh agricultural products. Meanwhile, the new policy also further expanded the variety of fresh agricultural products eligible for the green channel.
Table 5.2 List of top ten agricultural products general markets
Rank Name of market
1 Beijing Fengtai Xinfadi Wholesale Market for Agricultural and Sideline Products
2 Chongqing Guanyinqiao Farmer’s Market 3 Suzhou Nanhuanqiao Market 4 Wuhan Baishazhou Agricultural and Sideline Products Market 5 Qingdao Chengyang Wholesale Market for Vegetables and Aquatic Products 6 Beijing Dayang Road Agricultural and Sideline Products Market 7 Hefei Zhougudui Wholesale Market for Agricultural Products 8 Wholesale Market of Shenzhen Agricultural Products Center in Nanchang 9 Agricultural and Sideline Products Market of Hongxing Industrial & Commerce
Group Co., Ltd. in Changsha 10 Zhejiang Hangzhou Nongdu Agricultural Products Market
Source : Compiled from the Statistical Yearbook of China Commodity Exchange Market (2010), published by the national bureau of statistics of China
1155 Logistics Development in Some Key Industrial Segments
5.1.3.3 Acceleration of the Infrastructure Construction
Since 2005, the construction of infrastructures for fresh agricultural products logis-tics in China has been accelerating. Take refrigerated storage for example, in 2009, the total capacity of refrigerated storehouses in China exceeded nine million cubic meters and has kept a growth rate of 10% for two consecutive years. Many leading agricultural enterprises, large- and medium-sized supermarket chains and cold chain logistics enterprises successively planned and constructed a host of low temperature fresh agricultural products distribution centers around large- and medium-sized cit-ies, with transferring and dispatching functions. Fresh agricultural products distri-bution centers of some large-sized supermarkets serve both their own stores and other supermarkets and hotels. For example, Beijing Glorious Land Agricultural Company built a “Logistics Port” for agricultural products in the northern suburb of Beijing. The Port covers an area of 20,000 m 2 , comprising refrigerated storage, freshness storehouse and normal temperature storehouse, and is equipped with the function of low temperature operations. Terminal customers of the company include CuiweiMension, Shuangan Department Store, North Star Shopping Center and similar shopping malls and supermarkets, as well as Beijing Kerry Hotel, Shangrila Hotel, China World Hotel and other hotels and chain restaurants. Many domestic large-scale cold chain logistics enterprises have started to invest in the construction of cold chain logistics centers and accelerated the construction of various preservation,
Fig. 5.6 Diagram of the national “5 + 2” green channel network for fresh agricultural products
116 Z.-l. Jiao et al.
refrigeration, freezing, pre-cooling infrastructures to strengthen their competitive-ness in logistics service.
5.1.3.4 Simultaneous Development of Self-Operated Logistics and Outsourcing Logistics
Self-operated mode and third-party logistics mode for logistics of fresh agricultural products develop simultaneously in China. In the above-mentioned wholesale mar-ket mode of circulation, the proportion of socialized logistics operation has increased continually; third-party logistics enterprises, especially cold chain logistics enter-prises, have become the important operating body. For the direct distribution mode, the trend of self-operated logistics distribution in supermarkets is becoming increas-ingly clear and logistics distribution has become an important component of a supermarket’s competitiveness. For instance, the latest study 4 shows that, among 10 large- and medium-sized supermarkets in Beijing- Wal-Mart, METRO, Wu Mart Hypermarket, Wu Mart convenience stores, Merry Mart, Jing Ke-long, White Lamb and China Resources, all have established their own fresh agricultural products distribution centers. Currently, regular fresh agricultural products marketed by these supermarkets are delivered by their own distribution centers; these products are purchased fi rst by the supermarkets in a uni fi ed manner and then delivered by the markets’ own distribution centers to the chain stores, thus realizing the centralized management in self-operated form.
5.1.4 Problems in Fresh Agricultural |Products Logistics in China
Despite the recent progress in fresh agricultural products logistics in China, there are still areas where problems exist and improvements are needed. Following are some issues which must be dealt with in order to raise the operational level of fresh agricultural products logistics in China.
5.1.4.1 Logistics Ef fi ciency
Although logistics ef fi ciency of fresh agricultural products in China has been raised gradually, it still needs to be improved on the whole. China’s agricultural production relies mainly on individual farmers, so both the individual planting area and the output remain at a low level. The often repetitive collection and disbursement of fresh agricultural products during the circulation process increase the operational
4 He, Zhongwei et al. (2010) Development trend and quality & safety of fresh agricultural products logistics distribution industry in Beijing [J]. Soc Sci Beijing (4):43–47.
1175 Logistics Development in Some Key Industrial Segments
linkages. Such form of logistics process hinders the improvement on specialization level, returns to scale and logistics ef fi ciency. Besides, constrained by the circula-tion mode and the logistics ef fi ciency, it is dif fi cult to increase the added value of agricultural products in the production link, which adversely affects the betterment of the farmers’ income in China. The comparison of fresh agricultural products logistics at home and abroad (taking vegetables and fruit for example) is shown in Table 5.3 .
5.1.4.2 Facilities and Equipment
Although the construction of infrastructure for fresh agricultural products logistics in China has been accelerated continually, owing to the rapidly increasing demand, seri-ous imbalance still exists between supply and demand of facilities and equipment for fresh agricultural products logistics. For example, the capacity of refrigerated storage per capita in China is 7 kg; cold-insulated vehicles only account for 0.3% of freight vehicles in China, while the fi gure is 1% in USA, 2.6% in UK and 3% in Germany. Currently in China, existing freezing and refrigeration facilities are mostly outdated and nearly half of State-owned refrigerated storehouses have been in service for more than 30 years. The main production regions of farming and animal husbandry in the Central region and specialized agriculture areas in the West suffer from acute shortage of refrigerated storage; while large-scale wholesale market for agricultural products,
Table 5.3 Comparison of fresh agricultural products (vegetables and fruit) logistics at home and abroad
Item USA Japan and South Korea China
Main Circulation Channel Distribution center Wholesale market Wholesale market Terminal Sales Channel Supermarkets and
provisions shops Supermarkets and
provisions shops Farmer’s market
Main Circulation Form Cold chain throughout
Low-temperature preservation
Normal tempera-ture and natural
Proportion of Circulation by Cold Chain
Over 95% Over 95% 5%
Proportion of Preservation Volume over the Total (%)
>50 >50 10 ~ 20
Deterioration Rate (%) 1 ~ 2 <5 20 ~ 30 Proportion of Logistics
Cost in Total Cost (%) » 10 » 10 30 ~ 40
Gross Operating Pro fi t Margin (%)
» 20 » 20 0 ~ 10
Source : Drawn from the Development Plan of Agricultural Products Cold Chain Logistics , the national development and reform commission, and the 2008 Survey Report of Food Safety in Circulation Domain , the Ministry of Commerce. http://www.cawa.org.cn/ArticleInfo.aspx?ID=16806 . April 21, 2009
118 Z.-l. Jiao et al.
regional distribution centers of agricultural products and other key logistics nodes carrying over 70% of wholesale transactions of fresh agricultural products nationwide lack freezing and refrigeration facilities in general. 5 In addition, informatization devel-opment of fresh agricultural products logistics in China is lagging, public information platform of fresh agricultural products logistics has not been established in many advantaged production areas, collection and disbursement locations, large- and medium-sized cities and other concentrated consumption areas. Hence a control and full traceability system of fresh agricultural products logistics is also lacking.
5.1.4.3 Management Policies
From the perspective of macroscopic management by the Government, the organization and management level of fresh agricultural products logistics in China also needs to be improved. China’s current fresh agricultural products logistics system involves numer-ous links and long industrial chain; its operations require the coordination and support from many trans-industrial and trans-regional government sectors, so the consistency of policies is of utmost importance. For example, in the process of implementing the “green channel,” expressways in some regions still charge a toll fee, which evidently weakens the overall effectiveness of the national logistics policies on fresh agricultural products. Suggested measures that the Government should carry out in terms of policy manage-ment are as follows. First, continue to ante up the investment in the construction of logistics infrastructures; second, re fi ne the existing policies of “farmers and supermar-kets linkage” and the “green channel”; third, encourage the development of the third-party logistics enterprises, strengthen the cooperation among all government sectors with respect to industry and commerce, taxation, transportation, fi nancing, land, etc., and give more support to professional logistics enterprises engaging in fresh agricultural products logistics; fi nally, improve the level of emergency logistics, enhance the capability of logistics reserves, collection and distribution, so as to assure the supply of fresh agricultural products on the markets and maintain price stabilization, through sharing resources and information and strengthening business cooperation.
5.1.5 Development Trend of Fresh Agricultural Products Logistics in China
5.1.5.1 Enhancement of Added Value
The consumption attribute of fresh agricultural products for China’s populace has gradually shifted toward more unique-featured, high-quality and healthful direction, so operations with higher added value such as distribution processing, preservation,
5 Development Plan of Agricultural Products Cold Chain Logistics , National Development and Reform Commission. http://www.ndrc.gov.cn/zcfb/zcfbtz/2010tz/t20100730_364312.htm . June 18, 2010.
1195 Logistics Development in Some Key Industrial Segments
storage and transportation in logistics links have attracted much attention. With recent progress in the development of fresh agricultural products logistics, logistics enterprises have enhanced their capability in providing high value-added services. Adequate cold chain storage and transportation capability, suitable packaging and preservation capability in logistics process are also being strengthened. Moreover, some relatively weaker links in the logistics process, such as on-site pre-cooling and graded product processing, are being perfected at the origins. Greener and healthier logistics operational fl ow is also being promoted continually.
5.1.5.2 Close Cooperation of All Linkages
The establishment of fresh agricultural products logistics system is a intra-depart-mental, intra-industrial and intra-regional systematic project, so presently the govern-ments at all levels in China have adopted a host of policies to actively promote the cooperation of all the linkages. The newly-enacted Development Plan of Agricultural Products Cold Chain Logistics , the Commercial Logistics Special Plan and other documents dictate a participatory cooperation mechanism of fresh agricultural prod-ucts logistics. The “farmers and supermarkets linkage” project promoted by the government will be deepened further, and the production and marketing cooperation relationship between dedicated farmers’ cooperatives and large-sized chain retail enter-prises are gradually becoming more stable. More and more mass consumer groups, such as large retail enterprises, schools, hotels, factories and mines, enter into direct-supply and direct-sales contract with speci fi c agricultural products production coopera-tives, leading enterprises and agricultural production bases. All these progresses will gradually enhance the cooperative relationship between the upstream and downstream entities of fresh agricultural products supply chain in China.
5.1.5.3 Improvement of Cold Chain Logistics Level
As stipulated by the Development Plan of Agricultural Products Cold Chain Logistics , China will speed up the construction of agricultural products cold chain logistics system in several main product varieties and key locales. These include: (1) pork cold chain logistics systems for transporting from the Central region and South China to Pearl River Delta, Yangtze River Delta, Hong Kong, Macao and other coastal areas, as well as transporting from the Northeast to Beijing-Tianjin region; (2) aquatic product cold chain logistics system for transporting from Yellow Sea and Huaihai regions, the southeast coast, Yangtze River Basin and other aquatic product advantageous production areas to large and medium-sized cities in the Central and Western regions; (3) fruit cold chain logistics system for transporting from production areas of apple, orange, tropical fruit and other distinctive fruits to large and medium-sized cities; and (4) cold chain logistics system of off-season vegetables and special vegetables for transporting from the South to the North and from the East to the West. The planning and establishment of these dedicated cold chain logistics systems convey a clear signal of China’s cold chain logistics
120 Z.-l. Jiao et al.
development to the enterprises and investors. It can be expected that the level of China’s cold chain logistics will be further improved.
This section introduced the consumption characteristics and circulation modes of China’s fresh agricultural products, with the focus laid on the current status, prob-lems and development trend of fresh agricultural products logistics. In term of cur-rent development status, the distribution scale and the market trading volume and turnover of China’s agricultural products logistics continues to grow; consequently, both the logistics infrastructure and operational level are gradually improving. Governments of all levels are also acting to improve circulation ef fi ciency, reduce circulation cost and link demand and production in agricultural products logistics by issuing incentive policies, such as the “Green Channel” and the “Farmers and Supermarkets Linkage.” In addition, the industry is also focusing on the simultane-ous development of self-logistics mode and third party logistics mode. It tries to introduce the operational principles of modern logistics into the agricultural prod-ucts logistics management and to improve the distribution ef fi ciency of agricultural products logistics in light of the enterprises’ actual needs. As for the problems exist-ing in logistics development, they include low logistics ef fi ciency, high circulation loss, backward facilities and equipment, especially cold chain logistics develop-ment. In addition, the government’s level of policy management toward agricultural product circulation requires further improvement. In the long term, the development of cold chain logistics system, the enhancement of added value in logistics and the docking and coordination among different circulation linkages highlight the devel-opment trend of China’s fresh agricultural products logistics.
5.2 Development Status of Coal Logistics in China
Coal is inherently a basic and strategic resource concerning the national economy and the people’s livelihood of a country; assurance of coal supply is pivotal to the stable development of its economy and society. Scienti fi c and rational organization of coal logistics is signi fi cant in reducing coal circulation cost, increasing coal cir-culation ef fi ciency and promoting the level of coal distribution. Presently in China, while coal logistics is undergoing rapid development toward informatization, spe-cialization and greening, channels of coal logistics have been formed, and resource integration of coal enterprises have been strengthened.
This section fi rst overviews the basic features and main operating modes of coal logistics in China, then it analyzes the current development status and major exist-ing problems in coal logistics, and fi nally discusses the development trend of coal logistics in China.
5.2.1 Basic Features of Coal Logistics in China
Coal logistics is a process whereby raw coal is fi rst excavated and then subjected to the processes and linkages of storage, transporting, blending and processing by
1215 Logistics Development in Some Key Industrial Segments
intermediate merchants, and transferring before being delivered for terminal users’ consumption. Coal logistics in China has four basic features as follows.
First, the location of coal resources and the demand points are distributed unevenly within the country and span a long transport distance. Fifty percent of coal production in China, amounting to about 1.6 billion tons, is concentrated in Shanxi, Shaanxi, Inner Mongolia, Xinjiang, Guizhou, Ningxia provinces (autonomous regions) while 70% of coal consumption is in the economically developed eastern coastal and southern provinces. Therefore, large quantity of coal must be trans-ported a long distance from production sites to consumption areas, forming a pat-tern of coal transportation from North to South and from West to East.
Second, coal, as typical bulk cargo, features large batch in transport and low requirements for warehousing conditions and timeliness. Therefore, it is often transported by railway and ship with large tonnage and low cost. As for the propor-tion of coal moved by each transportation mode, at present, about 60% of the nation’s total quantity of coal is transported by railway, about 30% by ship, and about 10% 6 by highway.
Third, coal storage and handling is inclined to cause environmental pollution. Coal is usually stored in the open and transported with open vehicles so a large amount of dust is produced. According to a rough estimation, for each ton of coal, the loading/unloading handling process produces 3.53–6.41 kg of coal dust, and the storage process generates 0.48–2.02 kg of coal dust, causing great pollu-tion to the environment.
Fourth, demand for coal features strong seasonality and requires the Governments’ macro control. In fl uenced by the seasonal variation of water and power and heating factor in the winter, demand for coal in China exhibits a strong seasonal pattern, resulting in a shortage of coal carrying capacity during peak demand period and thus requiring stringent governmental intervention.
5.2.2 Main Operating Modes of Coal Logistics in China
5.2.2.1 Operating Modes of Large-Scale Coal Enterprises
Self-supported operating mode: Large-scale coal manufacturing enterprises oftentimes rely on the self-supported logistics operating mode, based on self-built railway, wharf and other logistics infrastructure as well as coal logistics information platform. Under this mode, coal transport is predominantly by railway and sea-railway multimodal, with scattered short-distance terminal road transportation as the auxiliary means. For example, the Shenhua Group successively built four self-supported dedicated coal railway lines – respectively from Shenchi county
6 Wu Yunliang, Shaopeng Huang (2008) Network system optimization and policies and sugges-tions on coal logistics in China. China Coal (10): 27–33.
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(Shaanxi Province) to Huanghua port (Hebei Province), Shenmu county (Shaanxi Province) to Shuozhou city (Shaanxi Province), Baotou city (Inner Mongolia Autonomous Region) to Shenmu county, and Datong city (Shaanxi Province) to Jungar Banner (Inner Mongolia Autonomous Region), and two dedicated coal wharfs (i.e. Huanghua port and Shenhua Tianjin coal wharf), and developed a self-supported coal logistics operations system integrating the production, transportation and sales functions. The self-supported logistics operating mode of large-scale coal enterprises is as illustrated in Fig. 5.7 .
Operating mode with self-supported road transportation and outsourced railway transportation: Since self-built railway requires stringent approval by the government, large-scale coal enterprises often adopt the operating mode with self-supported road transportation and outsourced railway transportation. For example, Shanxi Coal Transportation and Sales Group built its self-owned road, fl eet and other logistics facilities, aiming to establish a self-supported coal network for the enterprise; on the other hand, it cooperated with the national railway department to outsource to it the portion requiring trans-provincial railway transportation. The coal logistics operating mode with self-supported road transportation and outsourced railway transportation is as shown in Fig. 5.8 .
5.2.2.2 Operating Modes of Small and Medium-Sized Coal Enterprises
Typically, small- and medium-sized coal enterprises have lesser fi nancial resource and are unable to obtain guaranteed national railway transportation capacity. Meanwhile, their self-supported transport fl eets are hampered by small transport volume and short transport distance and generally lack long-distance coal transport capacity. Therefore, two logistics operating modes are usually adopted, i.e. alliance with large-scale coal enterprises or complete outsourcing. For the former mode, the small- and medium-sized coal enterprises join large-scale coal enterprises in their
Manufacturingenterprises(merger andacquisition)
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Fig. 5.7 Self-supported logistics operating mode dominated by railway transportation and sea-railway multimodal transportation
1235 Logistics Development in Some Key Industrial Segments
collectivized system through resource integration and equity participation, with cooperative production and shared logistics system between the two parties. For the latter mode, the small- and medium-sized coal mines, integrate community vehicle resources through public information platform, and entrust the third party to ful fi ll their customers’ orders.
5.2.3 Current Development Status of Coal Logistics in China
5.2.3.1 Formation of Coal Logistics Channel
Coal transportation in China shows a distinct pattern of “shipping from the West to the East and from the North to the South,” due to pronounced imbalance between the origins of coal resource and the coal consumption areas, wherein the main trans-portation modes include railway, ship and inland rivers.
Coal transportation by railway: This transport mode consists of two channels, i.e. from North to South and from West to East, as shown in Fig. 5.9 . The “north – south channel” is composed of railway lines such as Beijing – Shanghai, Beijing – Kowloon (Hongkong), Beijing – Guangzhou, Baotou – Liuzhou (Guangxi Province), and Lanzhou – Kunming. The Beijing – Kowloon (Hongkong) railway line under-takes south-bound coal transportation from railway lines such as Shenchi county – Huanghua port, Shijiazhuang (Hebei Province) – Dezhou (Shandong Province), and Xinxiang (Henan Province) – Rizhao city (Shandong Province). The Beijing – Guangzhou railway line mainly undertakes south-bound coal transportation from railway lines such as Taiyuan (Shaanxi Province) – Shijiazhuang (Hebei Province) and Lanzhou (Gansu Province) – Lianyungang (Jiangsu Province). The Beijing – Shanghai railway line mainly undertakes south-bound coal transportation from Yanzhou coal base in Shandong Province and railway lines such as Shijiazhuang – Dezhou and Shenchi county – Huanghua port. The Datong – Zhanjiang (Guangdong
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User
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Port transshipment
Fig. 5.8 Operating mode with self-supported road transportation and outsourced railway transportation
124 Z.-l. Jiao et al.
Province) railway is located at the transition zone between the central and western China and is an importance channel for coal transportation from Shanxi, Shaanxi and the west area of Inner Mongolia to the Central/South China.
The “west – east channel” is responsible for coal transportation in a west – east direction from Shanxi, Shaanxi, Inner Mongolia and Ningxia to the transshipping ports in the north and is an important part of the “sea-railway multimodal transpor-tation.” This channel mainly includes a north one, a central one and a south one. The north channel is composed of railway lines such as Datong – Jungar Banner, Beijing – Baotou, Datong – Qinhuangdao, Baotou – Shenmu county, Shenmu county – Shuozhou city, and Shuozhou city – Huanghua port; it mainly undertakes the transportation of coal for power generation from west part of the Inner Mongolia Autonomous Region, the north part of Shaanxi and the north part of Shanxi, and functions as a main channel for coal transportation of Shanxi, Shaanxi, and west part of the Inner Mongolia Autonomous Region. The central channel is composed of railway lines such as Beijing – Yuanping city (Shaanxi Province), Shijiazhuang – Taiyuan, Taiyuan – Jiaozuo (Henan Province), Handan (Hebei Province) – Changzhi (Shaanxi Province); it mainly undertakes the transportation of coking coal and anthracite coal from the central part and southeast part of Shanxi. The south channel is composed of railway lines such as Taiyuan – Jiaozuo, Houma city (Shaanxi Province) – Jiyuan city (Henan Province), Lanzhou – Lianyungang, Xi’an – Ankang (Shaanxi Province)
Fig. 5.9 Main railway channels of coal transportation
1255 Logistics Development in Some Key Industrial Segments
and Nanjing – Xi’an; it mainly undertakes the transportation of coking coal, rich coal and anthracite coal from the central part and southwest part of Shanxi.
Coal transportation by ship: This channel is responsible for coal, after being transported through the “west–east channel” and loaded at the northern ports (Qinhuangdao port in Hebei, Huanghua port, Tianjin port, etc.) to be transshipped to Jiangsu, Shanghai, Guangdong and other coastal areas.
Coal transportation through inland rivers: This channel undertakes coal trans-shipment from Shanxi, Shaanxi, the west part of Inner Mongolia, Henan, Anhui and Sichuan to areas along Yangtze River and East China through Pukou wharf in Nanjing, Yuxikou wharf in Wuhu of Anhui, Hankou wharf in Wuhan and Zhicheng wharf in Hubei, or to northern Suzhou, southern Suzhou, Shanghai, as well as Jiaxing and Huzhou in Zhejiang through Xuzhou port (in Jiangsu), Zhenjiang port (in Jiangsu) and Hangzhou port along Beijing – Hangzhou Canal.
5.2.3.2 Speeding Up of Railway Construction for Coal Transport
To ease the increasingly severe insuf fi ciency in and enhance the assurance of rail transport capacity of coal in China, the Ministry of Railways and local governments at all levels act vigorously in planning and building new railways for coal transport, as well as conducting capacity expansion and transformation on existing railways.
In October 2006, the Ministry of Railways issued the Railway’s Eleventh Five – Year Plan, focusing on the demands of coal transportation of ten large outbound-shipping areas, to accelerate the construction of coal transportation channels and to strengthen the capacity expansion and transformation on existing railways.
In May, 2011, the National Development and Reform Committee completed the Twelfth Five – Year Planning of Developing the Integrated Transportation System (Draft) wherein the following items are proposed: (1) construction of a second Lanzhou – Urumchi double-line railway; (2) capacity expansion of railways such as Shenmu county – Shuozhou city and Shuozhou city – Huanghua port; (3) construction of the west – east channel of coal transportation from Shanxi, Shaanxi and the west part of Inner Mongolia Autonomous Region to Jingtang port and Caofeidian harbor district and from the south central part of Shanxi to the coastal ports in Shandong; (4) plan for building of a new north – south channel for coal transportation from integrated energy base in Ordos Basin to Hubei, Hunan, Jiangxi and other central areas; (5) further optimization of coal transportation system to raise the planned coal transportation channel capacity to about 3 billion tons/year.
In January, 2012, the National Development and Reform Committee approved the project proposal for constructing coal transportation railway from the west part of Inner Mongolia Autonomous Region to Central China. The transport capacity of this channel is planned at 200 million tons and that during the initial operation is set at 100 million tons.
126 Z.-l. Jiao et al.
5.2.3.3 Continuous Westward Shift of Coal Producing Regions
In recent years, production of raw coal in Shaanxi, Inner Mongolia Autonomous Region, Ningxia, Xinjiang has increased so rapidly that its proportion in nationwide production increases from 26.5% in 2007 to 30.6% 7 in 2008. In 2010, Inner Mongolia Autonomous Region became China’s largest coal-producing province, with a pro-duction volume of 7.82 billion tons. In contrast, Hebei, Henan, Anhui and other large coal-producing provinces encountered slower growth in coal production, resulting in a continuous decline in the proportion of coal production in the nation-wide total. These two opposing trends indicate that the center of coal production in China is gradually moving westward.
With the rapid economic development in China, the amount of coal transported into the coal-inbound areas (Beijing, Tianjin, Hebei, the Northeast, East and South Central China) jumped from 63 million tons in 1980 to 600 million tons in 2005, rising about ten times in the amount of coal transported among regions. In 2009, Inner Mongolia Autonomous Region ranked fi rst in the amount of coal transported at about 3.4 billion tons. It is expected that the amount transported into the coal-inbound areas will exceed 1.2 billion tons in 2012, witnessing a tremendous upswing in coal logistics quantities.
With continuous westward shift of the center of coal producing areas, the long-distance and large-volume of coal transportation will be even greater than before, portraying a persisting long-term pattern of coal transportation from north to south and from west to east.
5.2.3.4 Speeding Up the Building of Coal Logistics Park
In recent years, planning and building of coal logistics parks is being sped up in China; a batch of modern large-scale coal logistics parks have been completed successively in various provinces and cities.
For example, in January 2008, the coal logistics park in Taiping town of Tianjin was put into trial operation, where a special logistics distribution company was established to take charge of park construction and coal sales. In March 2010, the coal logistics park in Hanlinjian village of Henan was put into trial operation, engag-ing mainly in coal washing and stocking. In addition, with support from the govern-ments, Handan of Hebei, Baotou, Dongsheng district and Erdos of Inner Mongolia, and Wuhu of Anhui have built various coal logistics parks or distribution centers. Lianyungang port in Jiangsu, Rizhao port in Shandong and Wuhu port in Anhui have cooperated with coal enterprises to build coal logistics parks.
All in all, modern coal logistics parks built or under construction are mainly con-centrated in large coal-producing provinces such as Inner Mongolia and Henan, or port cites such as Tianjin and Zhenjiang of Jiangsu province as shown in Table 5.4 .
7 Sun, Haibo, Zongchen Tang (2009) Investment Strategy on Coal Industry in 2010 [R/OL]. United Securities, November 26, 2009.
1275 Logistics Development in Some Key Industrial Segments
Tabl
e 5.
4 B
asic
info
rmat
ion
on c
oal l
ogis
tics
park
s bu
ilt o
r un
der
cons
truc
tion
in c
erta
in r
egio
ns
Proj
ect n
ame
Tim
e
Tota
l inv
estm
ent
(hun
dred
mill
ion
RM
B)
Des
ign
scal
e
Taip
ing
coal
logi
stic
s pa
rk in
Tia
njin
20
08-0
1 (T
rial
ope
ratio
n)
0.73
C
oal t
hrou
ghpu
t is
desi
gned
at 2
mill
ion
tons
/yea
r
Togt
oh c
oal l
ogis
tics
park
in I
nner
M
ongo
lia
2009
-05
(Con
stru
ctio
n co
mm
ence
men
t)
5.8
Incl
udin
g 13
0–15
0 co
al y
ards
, coa
l was
heri
es a
nd o
re s
tora
ge y
ards
, as
wel
l as
envi
ronm
enta
l pro
tect
ion
faci
litie
s, c
ater
ing
and
acco
mm
odat
ion,
gas
sta
tion,
fue
l sta
tion,
aut
omob
ile m
aint
enan
ce
area
, mod
ern
agri
cultu
ral t
rade
logi
stic
s ce
nter
, etc
. H
anlin
jian
coal
logi
stic
s pa
rk in
Hen
an
2009
-06
(Con
stru
ctio
n co
mm
ence
men
t)
21
Nea
r-te
rm c
oal t
hrou
ghpu
t is
desi
gned
at 1
0 m
illio
n to
ns/y
ear
and
long
-ter
m c
oal t
hrou
ghpu
t is
plan
ned
at 2
0 m
illio
n to
ns/y
ear
Dal
u co
al lo
gist
ics
park
in
Inn
er M
ongo
lia
2009
-07
(Con
stru
ctio
n co
mm
ence
men
t)
24
Inte
grat
ed c
apac
ity in
coa
l pro
cess
ing,
tran
spor
tatio
n an
d sa
les
is 1
00
mill
ion
tons
/yea
r, w
ith a
coa
l was
hery
fea
turi
ng r
aw c
oal w
ashi
ng
capa
city
of
4.5
mill
ion
tons
/yea
r C
oal l
ogis
tics
park
in
Lon
gkou
tow
n of
In
ner
Mon
golia
2008
-09
(Pro
ject
es
tabl
ishm
ent)
10
A
nnua
l was
hing
cap
acity
rea
ches
to o
ver
30 m
illio
n to
ns/y
ear
and
inte
grat
ed tr
ansp
orta
tion
and
sale
s ca
paci
ty is
pla
nned
to r
each
40
mill
ion
tons
/yea
r C
oal l
ogis
tics
park
at
Zhi
chen
g po
rt
of H
ubei
2009
-11
(Pro
ject
es
tabl
ishm
ent)
18
To
tal t
hrou
ghpu
t is
20 m
illio
n to
ns/y
ear,
coal
ble
ndin
g ca
paci
ty is
10
mill
ion
tons
/yea
r an
d co
al r
eser
ve c
apac
ity is
two
mill
ion
tons
Bao
yuan
Gro
up’s
coa
l lo
gist
ics
park
in
Zhe
njia
ng o
f Ji
angs
u
2010
-01
(Pro
ject
es
tabl
ishm
ent)
11
0 Po
rt th
roug
hput
is d
esig
ned
at 2
4 m
illio
n to
ns. F
our
50-k
iloto
n w
harf
s an
d fo
ur 3
-kilo
ton
wha
rfs
will
be
built
with
in th
e ye
ar
in a
dvan
ce
128 Z.-l. Jiao et al.
5.2.3.5 Strengthened Logistics Resource Integration of Coal Enterprises
With coal resource integration carried out in many provinces, the concentration of coal industry is raised and the logistics resource integration of large coal enterprises is strengthened. For example, in 2002, the Kailuan Group started to implement resource integration in systems, assets, resources, and businesses on distribution logistics and supply logistics. Previously these functions were individually managed by each pro-duction organization, resulting in the separation of traditional logistics from mining production. In April, 2009, the Kailuan (Group) International Logistics Co., Ltd. was established to take full charge of railway transportation, storage and distribution, coal collection and transshipment, and coal and supplies trading.
The Shanxi Coal Transportation and Sales Group structured an integrated logis-tics system for railway and highway coal marketing and distribution, through the integration of coal resources, coal depots and assets. In addition, coal enterprises such as Huainan Mining Group in Anhui, Yankuang Group in Shandong, and Huaibei Mining Group in Anhui also took active part in innovating coal logistics mechanism and strengthening the logistics resource integration of the coal enterprises.
5.2.4 Existing Problems in Coal Logistics in China
5.2.4.1 Insuf fi cient Railway Transport Capacity
Railway transportation, being advantageous in large transport capacity, rapid speed and low cost as well as lesser energy consumption, is the main medium for coal transportation in China. In spite of the gradual improvement of railway infrastruc-ture and increase in transportation volume in recent years, there still exists “bottle-necks” which restrict coal transportation in three major aspects 8 :
First, railway transportation capacity is utilized close to saturation. In 2009, Datong (Shaanxi Province) – Qinhuangdao (Hebei Province) railway, Shuozhou (Shaanxi Province) – Huanghua (Hebei Province) railway, Taiyuan (Shaanxi Province) – Shijiazhuang (Hebei Province) railway, and Taiyuan (Shaanxi Province) – Jiaozuo (Henan Province) railway have been used to near saturation, respectively reaching 1.0, 0.96, 0.91 and 0.9 in capacity utilization ratio. The capacity bottleneck caused a large quantity of coal being diverted to long-distance road transportation.
Second, the layout of transport channels is not rational. The majority of coal transport railways in Shanxi, Shaanxi, Inner Mongolia Autonomous Region and Ningxia are laid in an east – west direction but few are in north – south direction. Under such layout, most coal transferred into southern inland provinces has to take the roundabout routes. Meanwhile, due to uneven distribution of railway transportation capacity on the three aforementioned channels, the “north” channel undertakes over
8 China Economic and Information Network. Annual Report of China Coal Industry in 2009. http://www.cei.gov.cn/ , 2009.
1295 Logistics Development in Some Key Industrial Segments
2/3 of the total amount of coal transported while the “central” and “south” channels share less than 1/3 of the total transport amount.
Third, upstream and downstream transportation entities suffer from mismatched capabilities. For example, the Nanjing – Xi’an railway is a shortcut for coal trans-portation from Ningxia and Shaanxi to South Central China and East China, with the coal transportation capacity reaching up to 26 million tons. But the Xi’an – Houma (Shaanxi Province) railway directly responsible for consolidating the above railway still has not undergone capacity expansion, and the Xi’an – Yan’an railway is only scheduled for single-line capacity expansion and transformation. These dis-parities greatly constrict the transportation capacity of the overall system.
5.2.4.2 Low Marketization Level of Coal Logistics
In China’s logistics market for coal, logistics services are mainly provided by coal transportation and sales companies or departments, and logistics functions are mainly limited to transportation, con fi rmation of railway schedule, storage, han-dling and other traditional singular services; few enterprises can provide compre-hensive, full-course and integrated modern logistics services.
Due to the in fl uence of planned economy, operations for coal logistics confront dual organizational predicaments. In the longitudinal direction, there exists a disconnect among coal production, transportation and sales functions; in the latitudinal direction, there exist multiple management and multi-channel sales problems, as well as increased contradiction and friction during the marketization process. These pitfalls lead to in fl ated costs for all linkages in supply, transportation and sales. In addition, unreasonable arrangements of warehouse layout, storage of supplies, and handling and moving result in repetitive movements and operations, increasing the logistics cost unnecessarily.
5.2.4.3 Insuf fi cient Coal Logistics Resource Integration
At present, most coal enterprises in China adopt the traditional self-supported oper-ating mode by managing their own production, transportation and sales; large-scale professional third-party coal logistics companies are rare. About 80% of coal logis-tics is undertaken by coal enterprises and enterprises with coal demands, mostly via self-supported logistics operating mode. The existence of this predominate mode shows that the integration of coal logistics resources is quite inadequate.
In addition, the coal logistics industry in China suffers form low concentration; small-scale coal logistics enterprises are great in number but with low ef fi ciency and high transaction cost. Take Shaanxi Province for example, in 2008, there were several thousand operators engaged in railway transportation for coal, over 500,000 individual transport operators engaged in highway coal sales, as well as numerous coal washeries and coal depots, all of which were registered with Shanxi railway department. This phenomenon demonstrates how complex and scattered the coal logistics supply chain is, and being the cause of its rather unstable operation.
130 Z.-l. Jiao et al.
5.2.5 Development Trend of Coal Logistics in China
5.2.5.1 Speeding Up the Coal Logistics Informatization Construction
Coal logistics features multiple information sources and strong information dynam-ics. To elevate its operational level, modernized real-time and high-ef fi ciency coal logistics information system must be established to monitor the coal logistics net-work. With the development of modern scienti fi c technology, especially in com-puter technology, information technology and network technology, coal logistics informatization construction could reasonably be speeded up. Coal enterprises should actively apply advanced logistics information technologies such as GIS/GPS, RFID, network and digital communication to strengthen their quick-response capability and risk control capability against market conditions.
In addition, the integration of coal logistics and electronic commerce could be further accelerated, leading towards more and more electronic trading platforms. Meanwhile, modern coal transaction systems could be built through online sales negotiation, online trading and online payment to enhance the sales process, so that coal logistics enterprises could be streamlined in the level of specialization, infor-matization and socialization. As an example, in 2011, Shanxi Coal Transportation and Sales Group planned to invest two billion RMB to establish a coal logistics information platform with Internet of Things as its core. What’s more, the company proposed to develop a software platform for coal logistics operations and manage-ment system and to establish an electronic commerce system and electronic admin-istration system, thus achieving real-time tracking, effective control and full-course management on all linkages of coal logistics.
5.2.5.2 Intensifying the Application of New Coal Processing Technology
Continuing application of new coal processing technology can reduce coal logistics cost and usher in lean coal logistics operations. The application can also lessen the impact of coal logistics on environment and improve the ef fi ciency of coal utiliza-tion. Several examples are given below to illustrate the point. First, the gangue removal technology can enhance coal purity, assure coal quality, reduce transporta-tion burden, and lower transportation cost. Next, a series of distribution processing technology against spontaneous coal combustion can improve coal transportation safety and reduce coal losses during transportation. Finally, with gradually maturing technologies such as coal gasi fi cation and liquefaction as well as long-distance coal transportation through pipe, coal water mixture production and related pipe transportation will gradually become available. Pipe transportation shall be given full consideration due to its advantages such as large transportation volume, conti-nuity, rapidness, economy, safety, reliability, stability, low investment requirement, little land occupancy, and low expenses. In addition, pipe transportation can be operated under automatic control, reduce intermediate transfers, shorten transporta-tion time and lower transportation cost.
1315 Logistics Development in Some Key Industrial Segments
5.2.5.3 Emergence of Coal Logistics Strategic Alliances
With the acceleration of merger and reorganization of coal enterprises and the prog-ress of modern logistics system construction by the coal enterprises, coal logistics resource integration in China will be gradually strengthened. For example, coal enterprises like Shenhua, Pingdingshan, Yanzhou, Jiaohua (Shaanxi Province), Huaibei, and Beijing are generally moving towards centralized purchasing manage-ment and distribution. Lianyungang wharf signed a strategic cooperation framework agreement with Shaanxi Coal and Chemical Industry Group Co., Ltd., Rizhao port signed one with Shaanxi Coal and Chemical Industry Group Co., Ltd. and China Coal Energy Co., Ltd. Shandong Branch, to establish coal logistics strategic alli-ances, develop the integration of storage, processing and distribution, and build up modern coal logistics. The gradual rising of coal logistics strategic alliance contrib-utes to cultivating large-scale coal logistics enterprises, promoting logistics integra-tion operation, reducing logistics cost, and increasing coal logistics ef fi ciency. It is also a nut-shell re fl ection of China’s logistics market integration trend in coal logis-tics market and represents the typical operational mode of coal logistics market resource integration in China.
5.2.5.4 Attention and Development of Green Logistics for Coal
Green logistics features the bene fi ts of resource conservation, low energy consump-tion and cyclic utilization; it meets the national requirements for circular economy and sustainable development. Its application can achieve effective resource utiliza-tion and the protection of ecological environment. Coal logistics, as a branch of modern logistics, must also be developed in an environmental way.
On the one hand, electronic data interchange (EDI) and distribution planning can be used as a powerful technical support and assurance for logistics collaboration and environmental protection. Technology promotion and effective management must be conducted on exploitation, transportation, storage, handling, distribution processing (washing) and other linkages to reduce the detrimental impact of coal logistics on environment. On the other hand, research on recycling of coal waste must be strengthened, aiming at reducing logistics operations for waste processing and utilizing re-usable waste. It is expected that through new technologies and man-agement means, the cost of coal logistics may be reduced and the savings on coal resource may be achieved.
This section outlined the basic characteristics and main operations modes of China’s coal logistics, with the focus laid on its current status and problems, and its develop-ment trend. In term of current development status, the construction of China’s coal logistics park, coal railway and other infrastructures continues to progress at an ever-growing pace. The logistics resources integration of coal enterprises is being strengthened further. The focus of coal production is gradually moving toward the West, and a pattern of “transporting coal from west to east and from north to south” and the coal logistics channels matching this pattern have taken shape. In term
132 Z.-l. Jiao et al.
of problems existing in the development of coal logistics, insuf fi cient railway capacity for coal transport remains the “bottleneck” which constricts the outbound coal transport. Moreover, the marketization level of coal logistics is still low; many large-scale coal enterprises still remain in the traditional self-operation mode, i.e., “production plus transport plus sales;” the resource integration of coal logistics is also insuf fi cient. Nonetheless, with the upcoming improvement in the development environment for coal logistics, the informatization construction of China’s coal logistics is expected to further accelerate, the resource integration of coal logistics will be gradually strengthened, and the environmental coal logistics will also be highlighted and developed rapidly.
5.3 Development of Express Logistics in China
With continuous improvement of the market, policy and technological environment, express logistics develops rapidly in China. In the past decade, the overall market scale of express delivery has increased swiftly, the service capability of express enterprises improved signi fi cantly, and the market competition has evolved into a coexistence pattern of State-owned, private and foreign-funded express enterprises.
This section explores the current development characteristics and future devel-opment trend of express logistics in China. First, it introduces the development course, de fi nition, fl ow process and main types of China’s express logistics. Then it describes the management system of China’s express logistics and its policy environment with respect to standardization, pertinent legislative systems and relevant development plans. The third part elaborates on the development status of China’s express logistics in terms of market scale, competition pattern, service capability and regional characteristics. And the fourth part analyzes the problems existing in China’s express logistics. Based on the above discussion, this section provides a reasonable prospect of the future development trend of express logistics in China.
5.3.1 Overview
Express service is a relatively new industry which started in the US in late 1960s; in the early years, it mainly served industrial and commercial enterprises for the purpose of meeting their special needs of quickly delivering commercial docu-ments and product samples to the business customers. After its emergence, the express delivery has attracted sizable customers with its accurate, fast and high-quality service and kept a trend of rapid development. These days the express has become one of the industry segments with the fastest growth in the logistics fi eld.
1335 Logistics Development in Some Key Industrial Segments
5.3.1.1 Development Course of China’s Express Logistics
With the rapid development of global economy and increasingly keen market competition, businesses in China began to experience a sharp raise in demand for delivering commercial documents and product samples by express delivery. In 1979, China Foreign Trade Transportation Corporation (Sinotrans for short hereinafter) was the fi rst company to sign an express agency contract with OCS, marking the formal entry of express service to China. Soon after, DHL, UPS, FedEx, TNT and other international express enterprises successively established joint ventures for developing express service with China’s domestic express enterprises.
International express enterprises introduced advanced express management philos-ophy and normative operating process into China and thus led to the rapid development of domestic express service industry. And due to China’s national policies, operating capability and other factors, most of the early express enterprises in China originated from transport-related enterprises. In 1980, China’s Postal Department began to pro-mote Express Mail Service (EMS) at home. Afterward, in 1996, China Air Express (CAE) was established and began operation; and China Railway Express Co., Ltd. (CRE) of fi cially launched its international freight forwarding business in 1997.
China’s private express enterprises emerged in succession in the middle and late 1990s, and the representative enterprises include Shenzhen SF Express, Shanghai Shentong Express and Beijing ZJS Express. These private express enterprises attained rapid growth within a short period of time owing to their ef fi cient, speedy and fl exible operating mode. Currently, private express enterprises have become an important segment of China’s express industry.
In December 2005, in accord with China’s commitments upon its accession to WTO, the domestic express markets in China were formally opened to wholly foreign owned enterprises. Since then, many international express enterprises successively started individual proprietorship of express business in China through merger and acquisition of domestic express enterprises.
5.3.1.2 De fi nition and Process of Express Logistics
The standards of Postal industry in the Express Service promulgated by the State Post Bureau in January 2008 de fi ned express service as the delivery service of fast posting, transporting and delivering of individually packaged express items or articles, which do not need to be stored, to the addressees or designated places within agreed time, and obtaining the signature for receipt. The standards in the Express Service stipulated relevant provisions for the time limit of express service, weight per single piece, inquiry deadline, compensation standard and other related issues. Based on these provisions, Table 5.5 shows the difference in service attributes of express service, common postal service and ordinary freight service.
According to the standards of the postal industry in the Express Service , the process of express service comprises posting, transporting, sorting, delivering and signing after receiving the items. Take “Next Morning Delivery” for example, the basic process of express service is shown in Fig. 5.10 .
134 Z.-l. Jiao et al.
5.3.1.3 Main Types of Express Logistics
Express service comprises international express service and domestic express service; the latter includes domestic cross-regional ex press service and domestic same-city express service. The business scope, chief characteristics, main operating enterprises and market pro fi le of the express service types in China’s express market are presented in Table 5.6 .
5.3.2 Management System and Policy Environment of China’s Express Logistics
5.3.2.1 Administrative Mechanism of Express Service
In July 2005, the State Council issued the Postal System Reform Plan , which speci fi ed the general tenor of the postal system reform as: separating government
Table 5.5 Difference in service attributes of various delivery services
Service attribute Express service Common postal service
Ordinary freight (by highway, railway, sea, etc.)
Weight/Batch Small- and medium-sized single pieces
Small and single pieces
Large pieces and large batch
Service Charges High Low Lowest Service Period Short Long Longest Service Mode Door to door Postbox to mailbox Between freight yards
Source : Xu Linqing et al (2007) On several dimensions of express industry de fi nition [J]. Money China (11):112–117
Key Stages of Typical Express Service
Loca
l col
lect
ing
serv
ice
poin
t
The
sta
te’s
reg
iona
l sor
ting
cent
er
Inte
rnat
iona
l exp
ress
item
sdi
strib
utio
n ce
nter
Dis
patc
hing
ser
vice
poi
ntin
the
dest
inat
ion
Des
tinat
ion
Afternoon Evening Late night Next Morning
Cus
tom
er
Fig. 5.10 Basic process of “Next Morning Delivery” express service
1355 Logistics Development in Some Key Industrial Segments
Tabl
e 5.
6 M
ain
serv
ice
type
s of
Chi
na’s
exp
ress
mar
ket
Type
B
usin
ess
scop
e C
hief
cha
ract
eris
tics
Mai
n en
terp
rise
s D
istr
ibut
ion
of m
arke
t sha
re
Inte
rnat
iona
l ex
pres
s E
xpre
ss s
ervi
ce f
or c
ases
:
(1)
From
sen
ders
in C
hina
M
ainl
and
to r
ecei
vers
in o
ther
co
untr
ies
or r
egio
ns (
incl
udin
g H
ong
Kon
g, M
acau
and
Ta
iwan
)
The
hig
hest
con
cent
ratio
n of
ca
pita
l and
tech
nolo
gy; t
he
high
est k
now
ledg
e co
nten
t ;
the
high
est p
ro fi t
mar
gin
Hig
h-en
d bu
sine
ss in
exp
ress
se
rvic
e
Fore
ign-
fund
ed e
xpre
ss
com
pani
es: F
edE
x,
UPS
, DH
L, T
NT,
O
CS,
etc
.
Stat
e-ow
ned
expr
ess
com
pani
es: E
MS,
C
AE
, CO
SCO
, etc
.
Fore
ign-
fund
ed e
xpre
ss c
ompa
nies
ac
coun
t for
abo
ut 8
0% o
f th
e m
arke
t sha
re; l
ocal
exp
ress
co
mpa
nies
, suc
h as
EM
S,
acco
unt f
or a
bout
20%
of
the
mar
ket s
hare
(2
) Fr
om s
ende
rs in
oth
er c
ount
ries
or
reg
ions
(in
clud
ing
Hon
g K
ong,
Mac
au a
nd T
aiw
an)
to
rece
iver
s in
Chi
na M
ainl
and.
Dom
estic
cro
ss
-reg
iona
l ex
pres
s
Exp
ress
ser
vice
for
the
case
whe
re
the
addr
esse
r an
d th
e ad
dres
see
are
in d
iffe
rent
reg
ions
of
Chi
na
Mai
nlan
d
Cap
ital a
nd te
chno
logy
-int
ensi
ve;
high
con
tent
of
know
ledg
e
Hig
h pr
o fi t m
argi
n
The
pri
ncip
le m
arke
t con
test
ed
by d
omes
tic a
nd f
orei
gn-
fund
ed e
xpre
ss e
nter
pris
es
Stat
e-ow
ned
expr
ess
com
pani
es: E
MS,
C
AE
, CR
E, e
tc.
Priv
ate
expr
ess
com
pani
es: S
F E
xpre
ss, S
hent
ong
Exp
ress
, Bei
jing
ZJS
Exp
ress
, etc
.
EM
S ac
coun
ts f
or a
bout
70%
of
the
mar
ket s
hare
; Non
-pos
tal
Stat
e-ow
ned
expr
ess
ente
rpri
ses
and
man
y pr
ivat
e en
terp
rise
s ar
e m
ain
part
icip
ants
in
dom
estic
exp
ress
mar
ket
Fore
ign-
fund
ed e
xpre
ss e
nter
pris
es
have
not
pen
etra
ted
into
this
m
arke
t due
to m
any
fact
ors;
ho
wev
er th
ey h
ave
star
ted
to
ente
r th
e m
arke
t in
rece
nt y
ears
Dom
estic
city
ex
pres
s E
xpre
ss s
ervi
ce f
or c
ase
whe
re th
e ad
dres
ser
and
the
addr
esse
e ar
e in
the
sam
e ci
ty o
f th
e C
hina
M
ainl
and
Low
req
uire
men
t for
cap
ital a
nd
tech
nolo
gy; h
ighl
y la
bor-
inte
nsiv
e; lo
w p
ro fi t
m
argi
n
Num
erou
s pr
ivat
e ex
pres
s en
terp
rise
s Pr
ivat
e ex
pres
s en
terp
rise
s ac
coun
t fo
r ov
er 7
5% o
f th
is m
arke
t sh
are
It is
the
mar
ket w
ith th
e co
mpl
ete
com
petit
ion
amon
g C
hina
’s
expr
ess
mar
kets
L
ow-e
nd fi
eld
in e
xpre
ss
serv
ice
136 Z.-l. Jiao et al.
functions from enterprise management; reforming the main postal business and postal savings; perfecting comprehensive service mechanism, special service mechanism, security assurance mechanism and price formation mechanism. Guided by this edict, and under the organization and coordination of the State Council’s postal system reform team, China’s postal system reform has achieved signi fi cant results. During the “11th Five-Year” (2006–2010) period, China’s postal system accomplished the “separation of government functions and enterprise man-agement” for the fi rst time, which initiated the new system of “legal supervision by the Government and independent operations by the enterprises.” By the end of 2010, China basically accomplished the reform of postal fi nancial system and the restructuring of postal express logistics. Also established were the comprehensive postal service mechanism and special service mechanism founded on the principle of “guarantee by the State, supervision by the government and undertaking by the enterprise.” Besides, during this period, China Express Association (CEA) was established in February 2009, founded on the establishment of local express asso-ciations nationwide. CEA mainly acts to bridge, advise, as well as afford the ser-vice, coordination and self-disciplining functions. It promotes further improvement of policy environment in collaboration with the government sectors and solves bottleneck problems hindering the development of express service; thus promoting a steady and rapid development of the express industry. The gradual perfecting of express service administrative mechanism thus lays an institutional foundation for the development of express logistics.
5.3.2.2 Standardization of Express Service
Restructured State Post Bureau of the People’s Republic of China attaches great importance to the standardization. Beginning in 2008, the State Post Bureau had established a Technical Committee of Standardization for Postal Industry and enacted the Postal Industry Standard Express Service for express service through the National Occupational Standards for Express Courier , the Postal Industry Standard System, the “12th Five-Year” Development Plan for Standardization of Postal Industry and a series of other related standards and plans. These actions to certain extent rectify the long-time lacking in relevant industry standards for China’s express industry.
5.3.2.3 Relevant Legal Systems of Express Service
The State Council attaches great importance to the legal construct of China’s postal market. To achieve a comprehensive standardization of the express service market and promote its healthy and steady development, the Ministry of Transport issued and implemented the Measures for Administration of the Express Market in July 2008. And the newly-revised Postal Law of the People’s Republic of China was issued and implemented in October 2009. Meanwhile, the fi rst administrative legislative
1375 Logistics Development in Some Key Industrial Segments
9 Express enterprises above the designated scale nationwide refer to the express enterprises with annual business income exceeding two million RMB.
document: the Measures for the Administration of Express Delivery Business Permits issued for the express market was also of fi cially implemented in October 2009, to regulate the express service and its management in terms of foundational norms for express service, its security and main method of management. In addi-tion, some normative documents, such as the new Measures for Handling Customer Complaints in Postal Industry and the Opinions on Providing Service Guarantee in Peak Season of Express Service, were also issued and implemented in succession.
5.3.2.4 Relevant Development Plans of Express Service
In December 2007, the State Post Bureau of fi cially issued the “ 11th Five-Year” Development Plan for Postal Industry , which clearly stated promoting the devel-opment of express service in China from two aspects, viz. “improving develop-ment environment of express service” and “nurturing large-scale express enterprises in China.” On this basis, the State Post Bureau also actively promoted the formulation of development plans for regional express service, such as the Development Plan of Express Service in the Yangtze River Delta (2009–2013) and the Development Plan of Express Service in the Pearl River Delta (2010–2014). These development plans specify the goals, the major tasks and policies and mea-sures for the development of regional express service in the next 5 years Besides, in July 2011, the State Post Bureau issued the “ 12th Five-Year” Development Plan of Postal Industry , which puts forward the requirements like “promoting the transformation and upgrading of express industry and perfecting the establish-ment of regulatory bodies” and further speci fi es the direction of development for the express service in the next 5 years.
5.3.3 Development Status of Express Logistics in China
5.3.3.1 Scale of the Express Market
In recent years, the scale of China’s express market has expanded continually and rapidly. From 2006 to 2010, the annual rate of growth in business volume for express enterprises 9 above the designated scale nationwide held steadily at more than 20%; business income increased from 29.97 billon RMB to 57.46 billon RMB with an annual average growth rate of 19.78%. Table 5.7 lists the business development of express enterprises above the designated scale nationwide from 2006 to 2010. In November 2011, the scale of China’s express market ranked third in the world, trailing behind the United States and Japan.
138 Z.-l. Jiao et al.
5.3.3.2 Competition Pattern of the Express Market
Since 2001, the business entity of China’s express market has exhibited a trend of diversi fi cation. Business volume of non-postal express began to exceed that of postal EMS and the growth rate of the former is conspicuously higher than that of the latter. Numerous foreign-funded and domestic-funded non-postal express enterprises increasingly participate in express service in China. Meanwhile, market share of these enterprises grew gradually. At present, the market competition has shaped into a diverse pattern of coexistence of State-owned, private, and foreign-funded express enterprises. Figure 5.11 presents the distribution of business volume of express enterprises with different ownership in 2008.
At the same time, since the broadened opening-up of express industry in 2005, its high return has attracted hordes of enterprises to participate in the express market, thus engendering more intense competition therein. Under this circumstance,
State-ownedexpress
enterprises,48.70%
Privateexpress
enterprises,26.80%
Foreign-fundedexpress
enterprises,24.50%
Fig. 5.11 Proportion of express enterprises by ownership in 2008 ( Source : development trend of China’s postal market, department of policies, laws and regulations of state post bureau, 2009 central Europe postal reform and express service seminar, February 12–13, 2009, Beijing, China)
Table 5.7 Business income and business volume of express enterprises above designated scale in China for 2006–2010
Year
Express business income (billion RMB) Growth rate (%)
Express business volume (million pieces) Growth rate (%)
2006 29.97 25.0 1,059.9 22.4 2007 34.26 17.4 1,201.9 20.6 2008 40.84 19.2 1,513.3 25.9 2009 47.90 17.3 1,857.8 22.8 2010 57.46 20.0 2,338.9 25.9
Source : Compiled from the First National Express Service Statistical Findings (2006), jointly published by the national bureau of statistics and the state post bureau, and the Operating Condition of Postal Industry (2007–2010) published by the state post bureau Note: Statistical coverage of express-related data in the table refers to the data of express enter-prises above the designated scale (annual business income exceeding two million RMB)
1395 Logistics Development in Some Key Industrial Segments
for express enterprises to rapidly expand the scale and business scope and strengthen the competitive strength, many have adopted the strategy of alliance, merger and acquisition among them. Table 5.8 summarizes the major cases of alliance, merger and acquisition among express enterprises in China since 2006.
5.3.3.3 Service Capability of the Express Enterprises
In recent years, driven by increased demand for express service, domestic-funded and foreign-funded express enterprises successively formulated development plans,
Table 5.8 Major cases of alliance merge and acquisition among domestic express enterprises for 2006–2010
Year Parties of alliance/merge & acquisition Transactions
2006 TNT Huayu Logistics Group Co., Ltd.
TNT acquired China’s largest highway freight and parcel transportation enterprise– Huayu Logistics Group Co., Ltd. at 135 million USD
2006 Hainan Airlines GroupChina Airlines
Hainan Airlines Group of fi cially transferred 49% of its stock of Yangtze River Express to China Airlines (25% share) and the other three Taiwanese enterprises (24% share)
Yang Ming Marine Transport Corp
Wan Hai Lines China Container Express Lines Yangtze River Express
2006 FedEx FedEx acquired 50% of Datian FedEx Express Limited–a joint venture of FedEx and Datian W. Group, as well as the domestic express network of Datian W. Group at 400 million USD, thus obtaining all of Datian W. Group’s express businesses
Datian W. Group
2006 China Railway Express, CRE CRE owned by the Ministry of Railways and China Railway Line Package conducted their merger and restructuring in Beijing and established China Railway Express Co., Ltd.
China Railway Line Package
2009 DHL-Sinotrans DHL-Sinotrans acquired 100% of APEX APEX
2009 DHL-Sinotrans DHL-Sinotrans acquired 100% of Sinotrans Express Limited at 46 million RMB Sinotrans Express Limited
2010 Yamato Holdings CO., LTD. Yamato Holdings CO., LTD. and Shanghai Jiushi Corporation established the joint-ventured Yamato (China) Transport Co., Ltd.
Shanghai Jiushi Corporation
2010 Hainan Airlines Group Hainan Airlines Group and TTK Express hold 60 and 40% of shares, respectively, of a joint venture company
TTK Express
2010 Hainan Airlines Group Hainan Airlines Group and Yanzhijiecheng Express CO., LTD. hold 51 and 49% of shares, respectively, of a joint venture company
Yanzhijiecheng Express CO., LTD.
140 Z.-l. Jiao et al.
expanded their investment in the areas of service networks, collection and distribution centers, IT system, and operating vehicles, thus signi fi cantly improving the industry’s service capability. The fi ndings of the First National Express Service Survey released in June 2007 shows that the growth of assets investment in various categories for the express enterprises surveyed in 2006 as compared with that in 2005 10 is as follows: the rate of increase in area of building was 43.3%; the rate of increase in area of stand-alone sorting site was 68.8%; the rate of increase in enterprise-owned sales networks was 28.6%. Furthermore, the quantity of owned vehicles for collecting, dispatching and other applications reached 32,000, representing a rate of increase of 32.4%; the quantity of motorcycles was 18,000, equaling a rate of increase of 44.2%; the quantity of computers was 57,000, accounting for a rate of increase of 53.1%; and the quantity of handheld terminal devices was 48,000, amounting to a rate of increase of 119.8%.
The increase in input of capital, facilities, equipment, and technology noticeably expanded the coverage of service network of express enterprises. The 2010 Express Market Supervisory Report issued by the State Post Bureau in June 2010 shows that in 2010, express enterprises increased the input on infrastructure construction and enlarged the sales networks by 84% compared with 2009. By the end of 2010, the number of domestic express stand-alone sorting centers reached 2,176, with the total area of 2,810,000 m 2 ; and the number of nodes on sales networks was 64,000, increased by 84% compared with that at the end of previous year. Meanwhile, the network processing capability of domestic express enterprises has improved mark-edly and the service capability of these enterprises in terms of door-to-door collec-tion and delivery, on-time delivery, tracking and inquiry and other auxiliary functions are being perfected accordingly. The fi ndings of the First National Express Service Survey 11 conducted in 2007 shows that in 2006, among the express enterprises sur-veyed, 28.4% of them possess the capability of fully developing international and domestic business, 88.8% of them are capable of providing inquiry service, and 93.1% out of those capable of providing inquiry service can provide inquiry service down to the level of each operational link. Furthermore, the survey result of customer satisfaction on express service in the fi rst half of 2011 12 shows a slight lift in 2011 compared with that in 2010; the satisfaction level in terms of collection service and delivery service were both higher than that in 2010.
5.3.3.4 Regional Characteristics of Express Market
Development of China’s express service presents perceptible regional differences. Compared with the Central and the Western regions, express industry in the Eastern region has achieved a faster pace of development. As shown in Fig. 5.12 , income of
10 The State Post Bureau of the People’s Republic of China. The First National Express Service Statistical Findings, July 24, 2007. 11 The State Post Bureau of the People’s Republic of China. July 24, 2007. 12 Survey Result of Customer Satisfaction for Express Service in the First Half of 2011. http://www.gov.cn/gzdt/2011-08/11/content_1923485.htm . August 11, 2011.
1415 Logistics Development in Some Key Industrial Segments
express businesses for 2010 in the Eastern region accounted for 81.1% of the nation’s express business income and the express business volume in the East accounted for 79.3% of the nation’s total.
Regional distribution of express service has the identical characteristic of central-ization in the Eastern region where express markets concentrate. More speci fi cally, the volume and income of express business are mainly concentrated in a few key regions such as Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta. Figure 5.13 presents regional distribution of express business volume in China for the fi rst half of 2011.
5.3.4 Existing Problems in China’s Express Logistics
5.3.4.1 Inconsistent Policy Treatment
Currently there exist some differences in policy treatment of domestic express enter-prises under different ownership, as well as between domestic and international express enterprises. China Postal Express & Logistics Company Limited, owned by
81.1% 79.3%
9.9% 11.6%9.0% 9.1%
0%
20%
40%
60%
80%
100%
120%
Proportion of express businessincome
Proportion of express businessvolume
Eastern China Central China Western China
Fig. 5.12 Regional distribution of business income and business volume of express market in 2010 ( Source : The 2010 Operating Condition of Postal Industry , issued by the State Post Bureau of the People’s Republic of China, January 25, 2011)
Pearl RiverDelta, 20%
YangtzeRiver delta,
35%
Beijing-Tianjin-Hebeiregion,13%
Other, 32%
Fig. 5.13 Regional distribution of express business volume in China for the fi rst half of 2011 ( Source : Compiled from the Circular on Economic Operation of Postal Industry in the First Half of 2011 )
142 Z.-l. Jiao et al.
China Post Group, enjoys a majority of preferential policies; State-owned non-postal express enterprises such as CRE and CAE, relying respectively on the Ministry of Railways and the Civil Aviation Administration of China (CAAC) can obtain some preferential policy treatment through their direct superior’s in fl uence. And according to regulations issued by the State Council and China’s commitments upon its acces-sion to WTO, foreign-funded express enterprises are granted the concession to engage in some domestic and international express service. By contrast, private express enter-prises are not entitled to any preferential policy. Table 5.9 shows the differences in policy treatment accorded to different entities of China’s express market.
5.3.4.2 Weak Market Responsiveness
With the coming of information age, network retailing has also become an increasingly important component of China’s circulation market. The 2010 China Online Shopping Market Research Report issued by the China Internet Network Information Center (CNNIC) shows that in 2010, the amount of transactions in China’s online shopping market reached 523.1 billion RMB and increased by 109.2% compared with that in 2009; the position of online shopping market in China’s social consumer goods market rose steadily, increasing from 2% in 2009 to 3.3% in 2010. As a bridge linking stores
Table 5.9 Policy treatment accorded to different entities of the express market
Classi fi cation
China postal express & logistics company
State-owned non-postal express enterprises
Private express enterprises
Foreign-funded express enterprises
Permission to Handle Letters
No No No Allowed to deliver international letters
Laissez-passer of Express Vehicles to Urban Area
Yes No No No
Domestic Aviation Cargo-rationing Priority
Yes No No No
Wayleave Priority Yes No No No “Parking Right” in
Urban Area for Delivery
Yes No No No
Policy Encouraging to “Establish Air Cargo Companies”
Already established air cargo companies
No Some enterprises have established air cargo companies
Already established Air cargo companies (international routes)
Policy of Postal Industry Cost “Remission”
Yes No No No
1435 Logistics Development in Some Key Industrial Segments
and consumers, express service is one of the main avenues for consummating physical distribution in online shopping. Relevant surveys conducted by the China Electronic Commerce Research Center show that more than 60% of business volume of express enterprises which collaborate with C2C platform result from online transactions.
Although the development of online shopping provides a wide-open market space for express service, it also summons much higher requirements on the market respon-siveness of express service. Yet presently, when e-commerce enterprises offer sales promotion and cause an abrupt surge in the demand for logistics service, express enterprises often have problem in making timely delivery due to their limited logistics supply capability. For instance, during the 2011 Spring Festival, numerous network shops intensi fi ed their sales promotion which led to a sharp rise in sales volume. A number of express companies were not able to sort the excessive express items in a timely manner, thus resulting in the detention of a large quantity of express items in the originating stations or transshipment stations. Eventually, delivery of express items to their fi nal destinations was delayed excessively. Some express companies even suspended the collection of express items in some regions.
5.3.4.3 Internal Management Level Requiring Further Improvement
Compared with domestic express enterprises, foreign-funded express enterprises pos-sess more advanced managerial and technological skills. A few domestic-funded express enterprises have skill levels on par with the international standards. However, the opera-tions management and technology level of most domestic-funded express enterprises are relatively backward. Their main problems include the following. (1) Insuf fi cient scale and strength: enterprises tend to be small-scaled and lack fi nancial support; (2) Low level of overall management and imperfect management system: the manage-ment levels of some private express enterprises are uneven due to the industry’s low entry threshold; (3) Low personnel quality: lack of high-end management personnel, de fi ciency of management measures, wanting in building enterprise culture, and faint innovation consciousness; (4) Low technology level: except for information processing, the mechanization and automation levels of internal processing of express items in central cities are low in general; operation is still predominately of labor-intensive type, carried out by the “massive laborer strategy”; (5) Unstable delivery quality which prompts the crisis of user con fi dence. These problems seriously hamper the improve-ment of operating ef fi ciency and service quality of express enterprises in China.
5.3.5 Development Trend of China’s Express Logistics
5.3.5.1 Continuously Expanding Scale of Express Market
The demand for express logistics will likely maintain the ongoing trend of continu-ous and rapid development due to various factors. These include: (1) the driving force resulting from further deepening of reform and opening-up, rapid growth of
144 Z.-l. Jiao et al.
national economy, transformation of social production and consumption modes, (2) more frequent activities of information exchange, goods delivery, and fund fl ows, and (3) brisk development of e-commerce, online shopping and other new business formats. Furthermore, the development of integrated comprehensive trans-portation system provides a powerful infrastructure assurance for express service, and further opening-up of postal market also creates much broader international and domestic market development space for express service. All these features will shore up the continuous expansion of the scale of express market in China.
5.3.5.2 Alliance and Merge & Acquisition of Express Enterprises
In June 2011, the State Post Bureau released the Guideline on Merger and Reorganization of Express Enterprises , which encourages intra-industrial, trans-industrial, trans-regional, and trans-ownership merge and reorganization of express industry to advance in the direction of “marketization, industrialization and mod-ernization.” The goal is to establish and perfect the modern enterprise system, to speed up the transformation and enhance the competitiveness of the industry. Under such conditions, it is predicted that there will be a more manifested trend of merger and reorganization of various express enterprises in China,
5.3.5.3 Perfecting the Industry’s Supervision and Regulatory System
To further regulate the express market in China, the State Post Bureau will also need to successively speed up the following tasks, including: formulation of grading and classi fi cation administration of the express enterprises, formulation of the Express Business Operations Speci fi cations , dissemination of the template for Express Industry Concession (Franchising) Contract together with related departments, revising and perfecting of the Administrative Measures for Express Market , etc. The issuance of these new standards and plans will further promote an orderly, healthy and sustainable development of the domestic express industry.
5.3.5.4 Acceleration of the Process of Express Integration
The development of economic globalization and regional integration raises increas-ingly higher requirements for the “one-stop” express service. Competition of express enterprises will transform from the previous model of “competing among compa-nies” to the model of “competing among alliances and logistics systems.” This evo-lution will push the traditional express enterprises to change from serving only certain links of the express delivery process to the new multifunctional and inte-grated companies. In addition to providing ordinary express service and ensuring safe and punctual delivery of the express items, the integrated express enterprise must also bear some extended value-added services, such as Customs clearance,
1455 Logistics Development in Some Key Industrial Segments
storage and collection of service charges. Therefore, integrated international express enterprises will dominate the trend of express industry development through rapid process integration.
This section discussed the current development status and problems of China’s express logistics as well as its development trend based on the overview of the basic process, the main characteristics, the main contents and the development environment of China’s express logistics. In term of current development status, China’s express market is rapidly expanding, with the Eastern region having the fastest growth. The service capability of China’s express enterprise has been greatly improved. The business entity in China’s express market begins to show a diversi fi cation trend, and a market competition pattern featuring the co-existence of State-owned, private and foreign-funded express enterprises. As market com-petition intensi fi es, merger and acquisition begin to occur among different express enterprises. Some obvious problems exist in the development of express logistics: the differential policy treatment for enterprises with different ownerships, the lim-ited market response capability, and the relatively backward internal management level of most domestic enterprises, etc. Under the policy guidance of the Central Government and the diligent efforts of the express enterprises, the structure of China’s express industry will be upgraded gradually, and the industry’s supervi-sion and regulatory system will be further improved.
147B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_6, © Springer-Verlag Berlin Heidelberg 2013
This chapter is intended to introduce some emerging or hot issues in the economic and social scenes in China and to present to the readers with a broader understanding of the latest logistics development related to these issues. In the fi rst volume of the series, Contemporary Logistics in China: An Introduction , the development of emergency logistics, event logistics and international trade logistics were selected for this chapter. For emergency logistics, rescue and recuperation operations during the Wenchuan earthquake was taken as an example to illustrate the organization, scheduling, implementation and coordination of emergency relief logistics operations taken by the Chinese Government, with the cooperation of all business and civilian organizations. Lessons learned from the natural disaster on preparedness and awareness were also discussed. For event logistics, the 29th Olympic Games held in Beijing in 2008 was cited as a case to illustrate the logistics operations needed to move the materials, supplies, and personnel to meet the tightly- fi tted dynamic scheduling and emergency support for the Games. The event involved a tremendous number of precisely-timed logistics operations, and was carried out successfully. For international trade logistics, the development of China’s international trade and advancement of related logistics operation are introduced. Logistics infrastructures, transport means, and international trade agreements were also addressed. These topics drew the attention of many readers because they not only refer to the practical problems encountered in the social and economic development in China at that time, but also are hot issues in the fi eld of contemporary logistics research.
W.-l. Liu (*) • X. Li Logistics Research Center, Nankai University, No.94 Weijin Rd., Nankai District , Tianjin 300071 , P.R. China e-mail: [email protected]; [email protected]
L.-b. Li Institute of urban and region economics Nankai University , No. 94 Weijn Rd., Nankai District, Tianjin 300071, P.R. China e-mail: [email protected]
Chapter 6 Hot Issues in China’s Logistics Development
Wei-lin Liu , Lan-bing Li , and Xiang Li
W.-l. Liu, L.-b. Li, and X. Li are co-fi rst authors, each contributing one Section of the Chapter.
148 W.-l. Liu et al.
Subject to the same purpose and intention, this volume presents three current issues on the development of multimodal transport, bonded logistics and green logistics in China.
In 2011, under the in fl uence of international fi nancial crisis, China began to transform its growth mode and accelerate the adjustment of its economic structure. As a kind of intensive transportation organization mode, multimodal transport plays a positive role in reducing energy consumption and emissions while improving logistics operations ef fi ciency. In the meantime, international multimodal transport is also an important form in China’s international trade, and of great signi fi cance in advancing the level of international logistics. Therefore, this chapter chooses multimodal transport as a subject of special interest.
It has been over tenth year since China joined the WTO. International trade greatly contributed to the rapid development of China’s logistics, among which, bonded logistics also developed itself as one of the key forms in China’s inter-national trade logistics and the main re fl ection of China’s policy design and regional distribution regarding international logistics. Therefore, bonded logis-tics is also selected as a subject in this chapter. Additionally, China has begun to accelerate its effort in fostering and developing strategically oriented emerging industries, and promoted the transformation of China’s economic development toward the new growth mode featuring low material and energy consumption and high growth potential. Accordingly, China’s logistics industry was also taking on restructuring and upgrade. Coping with the development framework featuring energy conservation, low carbon emission and environment-friendli-ness, green logistics is receiving increasing recognition of the society. Hence the issue of green logistics is included as a subject in this chapter. On the whole, the subjects selected in this chapter mainly highlight the current development of China’s logistics from the perspective of environment-friendliness and internationalization.
6.1 Current Status and Development Trend of Multimodal Transport in China
After years of large-scale investment and construction, transportation system in China has begun to take shape in terms of physical facilities. However, wide gap still exists in the transportation system between China and developed countries con-cerning operational services and other software aspects. Multimodal transport, as an ef fi cient way to organize transport services, is stepping into a fast development stage in China along with the increase of container throughput at ports and the rise of transport in Eurasia Land Bridge. This section discusses the current status and development trend of multimodal transport in China. Part 1 gives an introduction of the operating subjects engaging in multimodal transport operations in China. Part 2 presents the current status of multimodal transport. Part 3 provides an analysis of the existing problems and part 4 concludes with a view on the development trend of multimodal transport.
1496 Hot Issues in China’s Logistics Development
6.1.1 Operating Subject of Multimodal Transport
The term “multimodal transport” is understood and de fi ned in various ways. In this Section, multimodal transport is not merely limited to the international multimodal transport featuring “door-to-door delivery with single document”. It comprises the diversi fi ed forms of combinations of transport modes in order to realize an ef fi cient transport system. The operating subject of multimodal transport here refers to a transport enterprise which provides its consignor with services for the entire jour-ney and over all modes of transportation. Viewed from the practice in China, the multimodal transport industry can be categorized into four categories: non-vessel operating common carrier (NVOCC), international freight forwarder, combined transportation company, and stowage or logistics company. Table 6.1 shows the differences among them.
The operating subject of international multimodal transport comprises two types of enterprises: non-vessel operating common carrier (called NVOCC internation-ally) and freight forwarder. In general, an NVOCC does not own transportation equipments, and only signs transport contract with carriers possessing transporta-tion equipments to carry out the transportation action. The two types of enterprises are mainly distinguished based on international conventions as follows. An NVOCC has to submit an application for registration to the Ministry of Transport of P.R.C. and can issue bill of landing, collect through freight from the client, make out an invoice of transport industry and have the provision of tax deduction. 1 A freight forwarder has to submit an application for fi ling to the Ministry of Commerce of P. R. C., yet can not issue bill of landing and the invoice can not used to deduct the tax; but it can collect agency fee or commission and make out an invoice of service industry. In most cases, NVOCCs in China also belong to an international freight forwarder company, so they can serve as a type of international freight forwarder. This kind of enterprise can either gain revenue by ways of issuing a bill of landing and collecting freight differential, or gain revenue by collecting commissions as a general agency without issuing a bill of landing.
The domestic multimodal transport can be divided into combined transportation company and logistics company. The combined transportation company must sub-mit an application for registration and fi le with local transport administrative depart-ment; it can issue transport document for the client and collect through freight. The logistics company has emerged as the major operating subject for domestic multi-modal transport. It is mainly involved in providing agency services rather than issu-ing transport document. It can be set up by fi ling only with the Ministry of Commerce of P. R. C. This type of enterprise gains revenue mainly by charging an agency fee, and its invoice allows no bene fi t of tax deduction.
1 This refers to the provision of paying business tax not by the total invoice value as the business income, but allowing the outsourcing portion of the invoice, if any, to be deducted from the total.
150 W.-l. Liu et al.
Tabl
e 6.
1 O
pera
ting
subj
ect o
f m
ultim
odal
tran
spor
t in
Chi
na
Ope
ratin
g su
bjec
t M
ajor
bus
ines
s Pe
rmitt
ed to
issu
e tr
ansp
ort d
ocum
ents
A
dmin
istr
ativ
e or
gani
zatio
n A
ppro
val s
yste
m
Cha
rge
Invo
ice
NV
OC
C
Inte
rnat
iona
l m
ultim
odal
tr
ansp
ort
Bill
of
ladi
ng
allo
wed
M
inis
try
of T
rans
port
of
P.R
.C.
Reg
istr
atio
n sy
stem
T
hrou
gh
frei
ght
Invo
ice
of tr
ansp
ort i
ndus
try,
w
ith p
rovi
sion
for t
ax
dedu
ctio
n In
tern
atio
nal
Frei
ght
Forw
arde
r
Bill
of
ladi
ng
disa
llow
ed
Min
istr
y of
Com
mer
ce
of P
.R.C
. Fi
ling
syst
em
Age
ncy
fee
Invo
ice
of s
ervi
ce in
dust
ry,
with
out p
rovi
sion
for t
ax
dedu
ctio
n C
ombi
ned
Tra
nspo
rtat
ion
Com
pany
a
Dom
estic
m
ultim
odal
tr
ansp
ort
Tra
nspo
rt
docu
men
ts
allo
wed
Loc
al C
ombi
ned
Tra
nspo
rt O
f fi ce
, M
inis
try
of T
rans
port
of
P.R
.C.
Reg
istr
atio
n sy
stem
T
hrou
gh
frei
ght
Invo
ice
of tr
ansp
ort i
ndus
try,
w
ith p
rovi
sion
for t
ax
dedu
ctio
n
Log
istic
s C
ompa
ny
Tra
nspo
rt
docu
men
ts
disa
llow
ed
Bur
eau
of I
ndus
try
and
Com
mer
ce
Filin
g sy
stem
A
genc
y fe
e In
voic
e of
ser
vice
indu
stry
, w
ithou
t pro
visi
on f
or
part
ial t
ax e
xem
ptio
n
Sour
ce : T
able
pre
pare
d by
the
Mod
ern
Log
istic
s R
esea
rch
Cen
ter,
Nan
kai U
nive
rsity
, Tia
njin
, Chi
na
Not
e: S
ince
the
abol
ishm
ent o
f jo
int t
rans
port
invo
ices
fro
m 2
006,
man
y co
mbi
ned
tran
spor
tatio
n co
mpa
nies
(th
e ite
m m
arke
d w
ith “
a ”)
have
bee
n re
nam
ed a
s hi
ghw
ay tr
ansp
orta
tion
ente
rpri
ses
or lo
gist
ics
com
pani
es
1516 Hot Issues in China’s Logistics Development
6.1.2 Current Status of Multimodal Transport in China
With the swift development of container transport in China, multimodal transport has manifested a strong development potential in both demand and supply. In recent years, certain regions in China have formulated various substantive compensatory policies to push forward the development of multimodal transport, thus building a forceful momentum for its expansion.
6.1.2.1 Scale of Container Transport
Following the quick expansion of ports and the rapid growth in throughput volume, cargo throughput and container throughput at China’s ports have ranked at the top in the world in the preceding 8 years. Owing to China’s export-oriented economy, the rate of increase in container throughput has outpaced that in port throughput; the container throughput volume climbed to 145 million TEUs in 2010. This massive increase of container throughput provides a huge potential market for multimodal transport. Presently, the share of container transport among all modes of transport is still rela-tively low, but its pace of development is quite fast. In 2009, the container via water transport numbered 30.1 Million TEUs while the railway container freight amounted to 694.2 kilotons. Table 6.2 show the container transport volume by type for 2003–2009.
6.1.2.2 Channels for Multimodal Transport
According to its regional con fi guration, multimodal transport service can be catego-rized into the following four main domestic channels and four international channels.
The four main domestic channels are as follows: (1) The container multimodal transport channel in the Northeast region – connecting the fi rst-tier cities with rela-tively developed regional economy and traf fi c, including Dalian, Shenyang, Changchun and Harbin; (2) The container multimodal transport channel in Northern and Northwest regions – extending from Tianjin, Qingdao and Lianyungang toward the West to Lanzhou through Zhengzhou and Xi’an and connecting the Northwest region; (3) The container multimodal transport channel in the Southwest, Central and Eastern regions – extending from Yangtze River Delta to the upper/middle-stream of the Yangtze River; (4) The container multimodal transport channel in Southern region – extending from Pearl River Delta to the Central and Southwest regions.
The international channel is composed of domestic routes connecting with the Eurasia Land Bridge; chie fl y including the following four channels: (1) The Dalian-Manzhouli Euro-Asian Combined Transport Channel with Dalian as bridgehead and leaving the country from Manzhouli. The channel is connected to the Siberia Landbridge after exiting China from Manzhouli and extends to the Rotterdam Port in the Netherlands along the Siberia Railway, passing through Moscow, Warsaw and Berlin. (2) The Tianjin-Inner Mongolia Euro-Asian Combined Transport Channel with Tianjin as bridgehead and leaving China from Inner Mongolia-Erenhot, which
152 W.-l. Liu et al.
Tabl
e 6.
2 C
onta
iner
tran
spor
t vol
ume
for
2003
–200
9 in
Chi
na
(Uni
t: m
illio
n T
EU
s)
Nat
iona
l tot
al
2003
20
04
2005
20
06
2007
20
08
2009
Con
tain
er v
ia h
ighw
ay
tran
spor
tatio
n 16
.6
20.9
24
.9
35.2
46
.2
67.7
52
.8
Con
tain
er v
ia w
ater
tr
ansp
orta
tion
15.2
16
.1
19.4
23
.3
29.5
32
.2
30.1
Con
tain
er th
roug
hput
at
por
t 48
.7
61.8
75
.6
93.6
11
4.7
128.
4 12
1.0
Con
tain
er f
reig
ht v
ia
railw
ay (
thou
sand
tons
) 59
0.3
595.
2 55
6.5
644.
9 71
1.6
635.
5 69
4.2
Sour
ce : C
ompi
led
from
the
Year
Boo
k of
Chi
na T
rans
port
atio
n (2
003–
2010
) an
d th
e Ye
ar B
ook
of C
hina
Rai
lway
(20
03–2
010)
1536 Hot Issues in China’s Logistics Development
is the shortest channel in China. The channel crosses Mongolia, enters Russia from north of Ulan Bator, connects with the Siberia Railway and separates at Brest and arrives at the Rotterdam Port on the west. (3) The New Eurasia Continental Bridge with Lianyungang as bridgehead and passes through the border from Xinjiang -Alashankou, which is the longest channel in China. The channel leaves the country from Alashankou, enters Novosibirsk by passing Tajikistan in Central Asia and con-nects to the Siberia Railway. (4) The Suifen-Manzhouli Euro-Asian Combined Transport Channel from Suifen River in Heilongjiang to Manzhouli. The channel mainly transports cargos from China and transships cargo from Japan and Hong Kong to the Nakhodka Port. The channel arrives at Suifen River via railway and is connected to the Siberia Landbridge through Harbin and Manzhouli.
Apart from the above four international channels with relatively concentrated freight fl ow, China has developed many more multimodal transport routes in recent years, such as the three landbridge outbound channels originating from Tianjin and exiting through the land ports in Erenhot, Alashankou and Manzhouli. Moreover, international multimodal transport service has also emerged in Qingdao, Rizhao in Shandong province and Qinhuangdao in Hebei province.
6.1.2.3 Quantity and Ef fi ciency of Land Ports
China has opened numerous ports rapidly in recent years; presently, 258 ports have been approved by the Government, including 135 water transport ports, 66 land ports and 57 aviation ports. The formation of all-around ports opening to the exter-nal countries creates a new transport channel for the development of international container multimodal transport. Along with the expansion of international coopera-tion, the clearance ef fi ciency at land ports is improved gradually. In 2009, a pilot project for information exchange was launched by the Customs of both China and Russia; Qingdao and Ningbo were the sea pilot ports and Manzhouli Port was des-ignated as the land pilot port. The Customs of both countries will work to attain the real-time transmission of the 16-item clearance data for all exporting marine cargos, to enable rapid clearance of legitimate cargos.
6.1.2.4 Multimodal Transport Service Network
In recent years, the massive construction of collecting and distributing system for coastal ports, inland rivers, highway hubs and railway hubs in China provides a powerful support for multimodal transport network. Port throughput has been ele-vated continually, the framework of international container transshipment hub ports has been formed, and the service hinterland of inland river water transport is being expanded constantly. Highway transfer stations for international container have been set up in major foreign trade port regions and hinterland thereof. These transfer stations are set up with container yards, packing & unpacking warehouses, Customs custodial warehouses, special-purpose vehicles, loading and unloading
154 W.-l. Liu et al.
machines, and inspection and maintenance equipment. They are also established to hold the “One Custom and Three Inspections” (i.e., the Custom plus commodity inspection, animal and plant quarantine inspection and sanitary inspection) joint inspection service organizations, as well as freight forwarding, tallying, informa-tion service organizations. Currently, China has 90 railway container scheduled train routes covering 220 cities, including 56 water-railway combined transport scheduled train routes. These routes at major ports in China have extended to all provincial capitals in the Central and Western regions except Lhasa, Tibet. An additional 18 container logistics centers are being constructed in an orderly progression.
6.1.2.5 Facilities and Equipment
All facilities and equipment for various transporting modes have been improved continually in the past few years, which provides needed equipment requisites for the development of multimodal transport. At present, the standardization capacity of railway locomotive equipment can basically meet the demand for container transport and the ratio of railway container standardization has been increasing year by year. With the large-scale construction of high-speed passenger railway lines in the past 3 years, the transport capacity released from the pre-vious passenger transport can supplement the freight capacity and also upgrade its specialization level. Moreover, a batch of specialized berths as well as specialized terminals for containers, bulk goods and vehicle rolling terminals were constructed successively at coastal ports. Large-scale container terminals such as those in Shanghai and Shenzhen have attained world-class level on both software and hardware facilities.
6.1.2.6 Cooperation Between the Ministry of Transport and the Ministry of Railways
Rail-water combined transport is an important fi eld to be developed urgently in China’s multimodal transport. In May 2011, the Ministry of Transport signed the Cooperative Agreements of Jointly Pushing Forward the Rail-water Combined Transport Development with the Ministry of Railways. According to the agree-ment, the two Ministries shall establish an effective long-term cooperation mech-anism to strengthen the planning, construction, organization and management of rail-water combined transport, as well as formulating relevant policies and stan-dards, to jointly push forward the development of rail-water combined transport. In September 2011, the two Ministries jointly issued the Guiding Views on Accelerating the Development of Rail-water Combined Transport , and proposed the development goals for 2015: increasing the transport volume of container rail-water combined transport by more than 20% annually, boosting the proportion for
1556 Hot Issues in China’s Logistics Development
collecting and distributing of coal, ore, grains as well as other major bulk goods at port through railways by 10%, compared with that in 2010. In October 2011, the two Ministries selected the fi rst batch of six pilot projects for container rail-water combined transport channels, including channels respectively from Dalian to Northeast China, Tianjin to North China and Northwest China, Qingdao to Zhengzhou and areas along Longhai Railway (Lianyungang of Jiangsu- Lanzhou of Gansu), areas along Lianyungang to Alashankou in Xinjiang, Ningbo to East China and Shenzhen to South and Southwest China.
6.1.2.7 Measures of Local Governments and Ports
Policy measures regarding accelerating the development of multimodal transport are launched in succession in Dalian, Tianjin, Ningbo, Shanghai, Lianyungang and other costal ports. In 2008, China Railway Container Transport Corp., Ltd., Shenyang Railway Bureau, Harbin Railway Bureau, China Shipping Group, Dalian Municipal Government and Dalian Port Corporation Limited jointly signed the Agreement of Strategic Collaboration Framework for Rail-Sea Combined Transport in Northeast Region , to further push forward the construction of container rail-sea combined transport system in Northeast region of China. In 2010, more than 50 container trains were set off each week for domestic trade from Dalian Port to the cities in Northeast region of China.
Tianjin is the earliest port city to open the continental bridge transport operation. In recent years, the international transit “Five Pre-set” 2 regular trains from Tianjin Port to Erenhot of Inner Mongolia, Alashankou, as well as Manzhouli, began opera-tions in succession. Up to July 2011, 15 rail-sea combined transport channels have been established from Tianjin Port to inland hinterland, ful fi lling a rail-sea com-bined transport throughput of 129,000 TEUs in the fi rst half of the year.
In 2009, Ningbo Municipal Government issued the Guiding Views on Supportive Policies for Accelerating the Development of Rail-Sea Combined Transport at Ningbo Port . It speci fi ed that any company with registered capital above fi ve million RMB and transporting more than 300 TEUs of rail-sea combined containers per year would receive a subsidy of 500 RMB for each container. In addition, the city also formulated the plan for a rail-sea combined logistics hub port for transporting bulk cargos.
Shanghai signed the Cooperation Agreement of Container “ Five Pre-set ” scheduled Train from Chengdu to Shanghai with Sichuan and Chongqing; the agreement speci fi ed that 95% of Sichuan’s cargos transported in rail-sea combined way would be transferred in Shanghai through the “Five Pre-set” trains.
2 “Five Pre-set” regular train refers to the fast freight train with “pre-set loading location, pre-set route, pre-set schedule, pre-set arrival and departure time and pre-set transport rate,” organized to run on trunk railways among major cities, ports and seaports.
156 W.-l. Liu et al.
6.1.3 Problems in the Development of Multimodal Transport in China
6.1.3.1 Low Percentage of Rail-Sea Combined Transport over the Total Throughput at Ports
Comparing with China’s huge container throughput at port, the volume of throughput via multimodal transport is strikingly low. In 2010, only about ten ports were engaged in rail-water combined transport container operations, ful fi lling a total transport volume of 1.62 million TEUs, and accounting for only 1.3% of the total annual throughput of the ports. In other ports, collection and distribution were done by waterway and highway separately, with transport volume respectively accounting for 14 and 85% of the total port throughput.
For cargos in highway transportation, most are handled by segmented transport, thus the consignment process needs to be re-done for each leg of the transport. Even for the few sea-highway combined transports, the combined transport document would be issued by the shipping company or agent thereof, rather than via a uni fi ed multimodal transport operator’s network. The sea-rail combined transport at major ports in China is shown in Table 6.3 .
Shanghai, as an example, has witnessed a rapid development of river-sea combined transport owing to its geographical advantages (located at the estuary of Yangtze River). The throughput by way of river-sea combined transport in Shanghai has reached 20% of the total container throughput in recent years. However, rail-sea combined transport developed rather slowly, its volume accounting for less than 0.5% of Shanghai port’s container throughput, which is starkly incomparable to Shanghai’s top ranking in international container port.
6.1.3.2 Segmentation of Management System
In China, the planning, construction and administration of all modes of transporta-tion are managed in segregated manner, which leads to uncoordinated organization of policy, facility management, and document and information. Several problems are becoming evident due to this segmented system.
First, coordination among policies of different departments is lacking. Various mul-timodal transport policies are overlapping, inconsistent, and even con fl icting. For exam-ple, on March 22, 2006, the National Development and Reform Commission issued the Notice of Strengthening the Management in Combined Transport Industry , aiming to cultivate and develop combined transport market, and required the use of the Nationwide Uniform Freight Invoice for Joint Transport Industry which was uniformly stipulated by the State Administration of Taxation. However, on May 16 of the same year, the State Administration of Taxation issued the notice to abolish the Nationwide Uniform Freight Invoice for Joint Transport Industry . This edict made it impossible for the combined transportation company to make out an “all-inclusive” combined transport invoice for clients and weakened the competitive advantage of the joint transport industry.
1576 Hot Issues in China’s Logistics Development
Tabl
e 6.
3 Se
a-ra
il co
mbi
ned
tran
spor
t con
tain
er th
roug
hput
at m
ajor
por
ts in
Chi
na f
or 2
010
(Uni
t: T
EU
)
Port
D
alia
n T
ianj
in
Qin
gdao
Sh
angh
ai
Nin
gbo-
Zho
usha
n X
iam
en
Gua
ngzh
ou
Shen
zhen
2007
17
4,00
0 19
5,00
0 58
,000
–
– 6,
089
– 30
,374
20
08
223,
332
233,
000
68,9
00
99,6
90
6 10
,023
4,
679
57,1
30
2009
23
3,38
2 13
7,40
0 82
,800
84
,737
1,
690
20,3
28
4,37
5 82
,104
20
10
262,
488
202,
000
99,4
00
71,9
23
28,1
39
25,0
31
5,94
4 90
,038
Pr
opor
tion:
% a
5.0
2.0
0.8
0.2
0.2
0.4
0.1
0.4
Sour
ce : H
ongg
uang
Z (
2011
) T
he d
evel
opm
ent s
tatu
s of
sea
-rai
l con
tain
er tr
ansp
ort f
or p
orts
in C
hina
. Con
tain
eriz
atio
n 23
8(5)
:18–
21
a Thi
s is
the
prop
ortio
n of
thro
ughp
ut v
ia s
ea-r
ail c
ombi
ned
tran
spor
t con
tain
er to
the
tota
l ann
ual t
hrou
ghpu
t at e
ach
port
for
201
0
158 W.-l. Liu et al.
Second, port hub, highway main hub and railway container central station as well as handling station respectively belong to the Ministry of Transport and the Ministry of Railways, so it is dif fi cult to unify their planning, design and manage-ment; the de fi ciency in mutual coordination and effective cooperation thus causes the slow progress in the construction.
Third, there are hundreds of documents designed respectively for port, railway, highway, Customs, inspection department, tallying department and the insurance sector, based on their own need. Some documents are designed with reference to relevant standards and requirements of the United Nations or other international organizations; however, most of the documents are non-standard ones, thus adding complexity to the multimodal transport process.
Fourth, multimodal transport information systems at port, Customs, enterprise and local authority all operate independently, without interfacing connection or uniform standards. A uni fi ed information system for networking of all multimodal transport parties (such as the Customs and the animal and plant quarantine of fi ce) has not been established for information sharing.
6.1.3.3 Bottleneck of Hardware Facilities
In China, the pace of transportation infrastructure construction has been fast, but there still exists bottlenecks on hardware facilities for railway transport capability and hub communication. The railway network density in China is low; limited by its transport capacity, order ful fi llment rate is only 35%. The transport volume for “essential materials such as coal, grains” by rail accounts for above 90% of the total transport volume; transport of general goods are assigned after passenger, emer-gency materials and foods. Therefore, currently railway transport in no way can meet the greater demand of sea-rail and rail-highway combined transport. Besides, the linking of railway and port facilities is also insuf fi cient.
Most of the port hubs are weak on distributing capacity; many ports, to varying extent, depend on one or two forms of collection and distribution. So it is common to encounter port congestion, stock detention and disembarking delay. Moreover, there is a shortage of large-scale freight hubs with modern logistics facilities that can effectively connect different modes of transport with the logistics bases and logistics centers to serve the region or city. The functions of freight hubs are insuf fi cient and the degree of informationization is relatively low, thus seriously hampers the collection and distribution capability as well as the transport ef fi ciency of goods.
6.1.3.4 Relatively Low Market Credit
At present, the credit level of China’s multimodal transport market is low. The majority of mass freight forwarder enterprises and distribution stations in road transport market focus on earning fees from sourcing information. Many carriers have poor quali fi cations and weak credit; cargo loss, damage and shortage during multimodal transport occur frequently. Meanwhile, owing to unfair competition
1596 Hot Issues in China’s Logistics Development
among market operators, illegal means of drawing business by some enterprises, and low regard for business reputation, the trust relationship in combined transport market has deteriorated. Therefore, cargo owners have to resort to segmented trans-port mode, which greatly reduces the logistics ef fi ciency.
6.1.3.5 Service Provider Lagging Behind in Development
Although there are tens of thousands of freight forwarder enterprises in China, only a few of them are competent to undertake the responsibility of an international mul-timodal transport operator. Since China opened up its freight forwarding industry in 1994, a great number of enterprises with poor credit entered into the freight for-warding business, owing to the absence of appropriate quali fi cation auditing mecha-nism. This phenomenon has led to the present disordered freight forwarding market in China and created the situation of segmented local market, higher industry barrier as well as de fi ciency of international competitiveness. Among the freight forward-ing enterprises in China, only a few of them have the quali fi cation to issue an “all-inclusive” bill of lading and even fewer of them are large enterprises or groups that can adapt to trans-regional, national and international multimodal transport.
6.1.4 Development Trend of Multimodal Transport in China
6.1.4.1 Further Expansion of Market Scale and Network Coverage
The demand of multimodal transport in China mainly arises from three developed areas: the Yangtze River Delta, the Pearl River Delta and the Bohai Rim, and mostly dealing with goods in foreign trade. As these areas gradually expanding their opening-up towards the inland and the manufacturing industry transferring into the Central and Western China, the hinterland for coastal ports is also extending further into the inland. The increase in physical distance in transportation further highlights the advantages of multimodal transport. Therefore, it can be forecasted that the market scale of multi-modal transport in China will grow substantially in the future, and the network cover-age will expand from the developed coastal areas like the Bohai Rim, the Yangtze River Delta and the Pearl River Delta, to major cities in the Central and Western China.
6.1.4.2 Rapid Development of Sea-Rail Multimodal Transport and River-Sea Multimodal Transport
Under the circumstance of furious globalization development and the deepened opening-up of the country, multimodal transport adopted for international trade will most likely combine with sea transportation, utilizing container transport. Comparing to the 20–40% level of sea-rail transport by other ports with the highest container throughput in the world, the proportion of sea-rail multimodal transport in China’s ports is woefully low. With the recent railway network planning and the large-scale
160 W.-l. Liu et al.
construction of passenger railways in China, some busy railway routes will have separated the passenger and cargo lines, so the bottleneck constraint in railway capacity will gradually be alleviated. Therefore, the current condition of low proportion of sea-rail multimodal transport may have room for attaining noticeable improvement in near future.
The network of river-sea multimodal transport mainly relies on the delta area of Yangtze River, Pearl River and Songhua River. With the rapid development of the Yangtze River Economic Zone, the river-sea multimodal transport in Yangtze River has already shown a fast development trend in recent years; the river-sea multi-modal transport in Shanghai Port accounts for nearly 20% of its container through-put. The Pearl River Delta area has begun to expand the Pearl River channel. Shenzhen Port is actively expanding its transportation business for internal trading and international transit, aggressively implementing the “Pearl River Strategy,” developing the public barges express in South China, and vigorously promoting the river-sea multimodal transport. In recent years, Heilongjiang Province has carried out the step ladder construction on the main stream of Songhua River, and acceler-ated the treatment of the Songhua River and Nen River channels, to open the river-sea multimodal transport lines for large vessels.
6.1.4.3 Acceleration of Hub Construction
The development of multimodal transport in developed countries relies on the construction of networked comprehensive cargo hub system. These cargo hubs pro-vide the multimodal transport with the services of transportation mode transfer. They usually have yard space for stacking of containers, as well as for dispatching and con fi guration of freight trains or vehicles. Meanwhile, they have good roads, railway facilities and well-tuned information systems, which are essential for the container transportation services and helpful for tracking, managing and controlling the freight fl ow. In addition, these hubs must be equipped with modern container handling facili-ties, such as container crane, stacking machine for empty container, socket for refri-gerated container, etc. In recent years, China has already begun to carry out a series of related programs; construction of 18 railway container center stations planned by the Ministry of Railways are in progress; container center stations have been successively built in Kunming, Shanghai, Chongqing, Wuhan, Xi’an, Qingdao, Dalian, Zhengzhou, and several others are planned to be built by 2012. Meanwhile, the construction of comprehensive cargo hubs, such as inland ports along highways, is accelerating, aiming to provide a good infrastructures platform for multimodal transport.
6.1.4.4 Co-operations of Sea Transport, Port and Inland Transport Enterprises
Some shipping and port enterprises in China has begun to expand their network toward inland China. For example, Sinotrans signed a strategic cooperation frame-work agreement with China Railway Container Transport Co., Ltd. (CRCT) in 2008,
1616 Hot Issues in China’s Logistics Development
and established a multi-faceted and in-depth cooperation in areas such as linked rail-sea multimodal transport, scheduled container train transportation, etc. Port enterprises have paid more attention to the construction of inland cargo hub, and cooperated with highway transportation and park enterprises to build dry ports. Moreover, this coop-erative mode has expanded rapidly in recent years, and thus resulted in the formation of the Dalian Port-centered northeast dry port group, the Ningbo Port-centered Jiangsu and Zhejiang dry port group, and the Tianjin Port-centered north dry port group, encompassing 12 provinces and cities. Furthermore, most of the dry ports are capable of providing multimodal transport services, in addition to the general port functions. It can be forecasted that the trend of integration of enterprises linking sea transport, port and inland transport will be further solidi fi ed, thus establishing the operating service platform for multimodal transport.
This section describes the four types of entities engaging in multimodal transport in China, i.e. NVOCC, freight forwarder, combined transportation company and stow-age or logistics company. In recent years, the scale of container transportation in China has continuously expanded, which provides a huge potential market for the development of multimodal transport. Moreover, the increasing channels and lines of multimodal transport, the opening of large number of inland ports and improved operating ef fi ciency provide more optional routes for multimodal transport. The combined transportation service network of all types of transportation modes has been actively promoted; the improvement of facilities and equipment level affords excellent conditions for multimodal transport; the cooperation among departments, local governments and ports also provides multimodal transport with favorable pol-icy support. However, there are still a host of problems facing multimodal transport in China, such as, low proportion of sea-rail multimodal transport, segregated man-agement systems, bottleneck of railway capacity and hub connection, low market credit, underdeveloped service providers, etc. It can be forecasted that the market scale and network coverage of multimodal transport will be further expanded in the future; the sea-rail and river-sea multimodal transports will be the pivot of the devel-opment. The construction of multimodal transport will further be accelerated, and sea transport, port and inland transport enterprises will move toward linked integra-tion, providing an operating service platform for multimodal transport.
6.2 Integration and Development of Bonded Logistics in China
Following the continuous advancement of global economic integration and rapid development of foreign trade, a host of bonded economic zones have successively emerged in China. Bonded logistics, as a kind of special international logistics form, is an important component of regional logistics operation of bonded economy and an important supporting platform of participating in international industrial division for China. Hence bonded logistics has become a new arena of growth in China’s modern logistics development.
This section mainly involves four parts. The fi rst part illustrates the characteristics, development background and business operational mode of China’s bonded
162 W.-l. Liu et al.
logistics, the second part speci fi es the development status of bonded logistics in China, the third one analyzes the problems in supervision and supporting service system in China’s bonded logistics, and the fourth one puts forward concrete measures for integrating the areas under the special supervision of China’s Customs.
6.2.1 Characteristics, Background and Mode of China’s Bonded Logistics
Since the 1980s, China’s Customs has successively set up different types of customs bonded supervision areas (sites), and has continually enriched the forms of bonded logistics and increasingly perfected their functions. In China, bonded logistics system has been formed to include import and export processing enterprises as its demand subject, bonded logistics enterprises as its operating subject and bonded logistics supervision areas (sites) as its operating platform.
6.2.1.1 Basic Characteristics
Bonded logistics is a logistics form involving storage, dispatching, transportation, distribution processing, loading/unloading and handling, logistics information and many other functions within and among special customs supervision areas. Bonded logistics has three main characteristics. The fi rst one refers to deferred import duty, that is, no duty is required for the imported goods during the period when they are stored in the bonded areas; the customs duty would be paid by the user of bonded logistics only after the goods enter into the imported country. The second one refers to export tax rebate in advance, that is, exporting enterprises would fi rst declare the exported goods at the Customs, send the goods to the special customs supervision area, and go through the refund procedures after undergoing commodity inspection and Customs inspection. The third one refers to centralized custody, that is, the Customs implements informationalized, closed and intensive management in spe-cial supervision sites, to achieve the objectives of simplifying Customs clearance procedures and improving the Customs clearance ef fi ciency and the operations ef fi ciency of bonded logistics.
6.2.1.2 Development Background
First, global manufacturing industry’s transfer has prompted the development of bonded logistics in China in recent years. The new round of optimization and reorganization of global production factors and industrial transfer has reached a climax, and transnational corporations have begun to transfer out their processing and manufacturing links with higher technology level and value-added content, as well as their research and development institutions. Bonded logistics, having special policy advantage, holds new comparative advantage for transnational corpo-
1636 Hot Issues in China’s Logistics Development
rations in expanding their processing and manufacturing business and also provides an important platform for China to embark on the global industrial transfer.
Second, rapid growth of export-oriented economy in China also promoted the development of bonded logistics. Since 1978, export-oriented economy in China has developed rapidly. In the composition of import and export trade, processing trade accounted for half of the total, which aroused a great demand for international logistics and promoted the development of corresponding bonded logistics.
Finally, the developmental pattern and experience of free trade zone in the world has propelled the rapid development of China’s bonded logistics. United States, South Korea, Singapore, and Hong Kong all have vigorously developed free trade zone and actively set up the supporting bonded logistics system, which provided a favorable environment for international trade development and forcefully promoted the economic development.
6.2.1.3 Operational Modes
Taking the international logistics business in bonded logistics park as an example, the main operational modes of bonded logistics 3 are discussed below.
International distribution mode based on import trade : This mode refers to a business mode of dispatching the imported goods to overseas or domestic market, after sorting, rationing, or conducting simple value-added processing on them at harbor. The main characteristics of this mode is to use bonded logistics park as the base for batching imported bulk commodity and dispatching them to overseas or domestic market, as shown in Fig. 6.1 .
Logistics operations mode based on export trade : This mode refers to a business mode of selling the goods purchased at home to overseas market after carrying out general treatment and simple value-added processing for them at harbor. The main characteristics of this logistics operations mode is that exported goods are sent to the bonded logistics parks in the form of few varieties and large quantities and are
3 Dong, Weizhong (2005) Recognition and suggestions on development of free trade zone and bonded logistics park in China [J]. Macro Econ Res (5):52–55.
Arrival of
imported
goods
Entry of these goods
to logistics parks
after inspection
quarantine and
Customs registration
Bonded storage
Sorting
Value-added operations at
harbor
Internal transaction
……
Quarantine
Declaration
Exiting
Distributed to
overseas or
domestic market
(Batch-wise exiting
and collective
declaration)
Fig. 6.1 Flow of logistics operation based on import trade
164 W.-l. Liu et al.
distributed overseas in the form of many varieties, large quantities and in multiple directions, after undergoing centralized composition and optimized shipping option. See Fig. 6.2 for an illustration of this mode.
Logistics operations mode based on transit trade : This mode refers to a trade mode under which import and export trade between two countries is completed through the middleman of the third country. Logistics operations of transit trade takes the third-party logistics enterprise within bonded logistics park as the operating subject and transfer international and domestic goods to other destination ports inside and outside after separating and polling them. See Fig. 6.3 for details.
6.2.2 Development Status of China’s Bonded Logistics
With the rapid growth of its foreign trade, especially the processing trade, China’s bonded logistics also achieved rapid development. Bonded supervision area has extended successively from the Eastern region to the Western region, so the nationwide bonded logistics supervision network has gradually taken shape. Functional integration and conglomeration of various bonded logistics supervision areas (sites) are being accelerated and the service capability of bonded logistics enterprises is also improved continually.
Domesti
c goods
Export
declaration,
inspection and
quarantine
Entry to
bonded
logistics
park
Duty rebate of domestic goods
Cancellation of export
enterprise’s booklet after
verification
Bonded storage
Internal transaction
Quarantine
Inspection
and
Customs
registration
Sold to
overseas
market
(Exported)
Fig. 6.2 Flow of logistics operations based on export trade
Arrival of
goods
from
oversea
Inspection
and
quarantine
Entry to
logistics
parks
Customs
registration
and export
Transported
to other
ports
Bonded stockpiling
Line changing and
awaiting for
vessels
Fig. 6.3 Flow of logistics operations based on transit trade
1656 Hot Issues in China’s Logistics Development
6.2.2.1 Integration Trend of the Functions of Bonded Logistics Supervision Area
By drawing on the experience from the development of foreign trade zone and free trade port in the world, China successively established bonded warehouse, export supervised warehouse, free trade zone, bonded logistics center, bonded logistics park, bonded port, comprehensive free trade zone and special customs supervision area in many other development forms.
In order to promote rapid development of export-oriented economy, to fully uti-lize existing customs supervision resources, to reduce logistics cost and to improve logistics ef fi ciency, various bonded logistics supervision areas actively broaden their business functions and improve their capacity of bonded logistics services. For instance, in December 2008, the General Administration of Customs vigorously developed and broadened bonded logistics and other functions 4 in nationwide pro-cessing zones which had been approved for operations. The original simple bonded processing function was extended to the form of rolling bonded processing, bonded logistics, R & D, testing, maintenance, after-sales service and other functions into one. However, due to historical reasons, the problem of overlapping and crisscrossing functions still exists among many bonded logistics supervision areas in China. Table 6.4 presents the similarities and differences in functional positioning, assess-ment and approval authority, management mode and operating body, and export rebate policy of various bonded logistics supervision areas.
6.2.2.2 Increasing Demand for Bonded Logistics
Rapid growth of China’s foreign trade, especially the processing trade, gives rise to great demand for bonded logistics. As shown in Table 6.5 , all relevant indexes concerning demand for bond logistics had achieved rapid growth in recent years. Among them, in 2009, sales income of free trade zone reached 1,463.87 billion RMB and accounted for 18.8% of the cumulated value over the years 5 ; sales of industrial products reached 713.14 billion RMB and accounted for 25.04% of the cumulated value over the years. These data, to a certain extent, show that the demand for bonded logistics in China is on the rise
6.2.2.3 Rapid Increase in Bonded Logistics Supervision Areas (Sites)
China’s bonded logistics supervision system can be categorized into “three levels and six modes.” Bonded port (comprehensive free trade zone) is of the fi rst level
4 Work Conference on Promotion of Expansion of Bonded Logistics Function of National Export Processing Zone, website of Jiangsu Changshu Economic Development Zone. http://www.chang-shu-china.com/newshow.php?id=880 . April 21, 2009. 5 September 2000 to December 2009.
166 W.-l. Liu et al.
Tabl
e 6.
4 C
ompa
riso
n of
var
ious
bon
ded
logi
stic
s su
perv
isio
n ar
eas
(site
s)
Mod
e L
ocat
ion
Func
tiona
l pos
ition
ing
Log
istic
s m
anag
emen
t m
ode
and
oper
atin
g bo
dy
Reb
ate
polic
y A
ppro
val
auth
ority
Bon
ded
War
ehou
se
Not
lim
ited
For
stor
ing
impo
rted
or
tran
site
d bo
nded
goo
ds o
r ot
her
good
s w
hich
hav
e no
t cle
ared
the
cust
oms
proc
ess
Ope
rate
d by
mul
tiple
en
terp
rise
s N
one
Dis
tric
t Cus
tom
s
Exp
ort
Supe
rvis
ed
War
ehou
se
Not
lim
ited
For
stor
ing,
bon
ded
logi
stic
s di
stri
butio
n, a
nd p
rovi
ding
ci
rcul
atio
n va
lue-
adde
d se
rvic
es
Ope
rate
d by
mul
tiple
en
terp
rise
s So
me
war
ehou
ses
are
appr
oved
to r
ecei
ve
reba
te a
fter
war
ehou
sing
Dis
tric
t Cus
tom
s
Bon
ded
Log
istic
s C
ente
r (A
) Se
t up
in p
lace
s w
ith s
eapo
rt,
airp
ort,
land
tr
ansp
ort h
ub,
larg
e in
land
de
man
d fo
r in
tern
atio
nal
logi
stic
s an
d C
usto
ms
agen
cies
and
pr
one
to
cent
raliz
ed
supe
rvis
ion
by
the
Cus
tom
s
It is
the
inte
grat
ion,
opt
imiz
atio
n an
d im
prov
emen
t of b
onde
d w
areh
ouse
and
exp
ort
supe
rvis
ion
war
ehou
se. I
t has
th
e fu
nctio
ns s
uch
as
circ
ulat
ion
proc
essi
ng a
nd
valu
e-ad
ded
serv
ice,
glo
bal
proc
urem
ent a
nd in
tern
atio
nal
allo
catio
n an
d di
stri
butio
n se
rvic
e, tr
ansi
t tra
de a
nd
inte
rnat
iona
l tra
nsfe
r bus
ines
s,
as w
ell a
s ot
her i
nter
natio
nal
logi
stic
s bu
sine
ss a
ppro
ved
by
the
Cus
tom
s. T
he b
onde
d st
orag
e pe
riod
of g
oods
in
logi
stic
s ce
nter
is 2
yea
rs
Est
ablis
hed
and
oper
ated
by
two
diff
eren
t en
terp
rise
s
Enj
oy ta
x re
bate
aft
er jo
inin
g th
e ce
nter
G
ener
al
Adm
inis
trat
ion
of C
usto
ms
1676 Hot Issues in China’s Logistics Development
(con
tinue
d)
Mod
e L
ocat
ion
Func
tiona
l pos
ition
ing
Log
istic
s m
anag
emen
t m
ode
and
oper
atin
g bo
dy
Reb
ate
polic
y A
ppro
val
auth
ority
Bon
ded
Log
istic
s C
ente
r (B
) Si
mila
r to
bond
ed
logi
stic
s ce
nter
(A
)
Type
B ty
pe is
the
inte
nsiv
ely
regu
late
d ve
rsio
n of
type
A
Ope
rate
d by
one
ent
erpr
ise
with
mul
tiple
en
terp
rise
s jo
inin
g in
to
enga
ge in
bon
ded
logi
stic
s bu
sine
ss
Gen
eral
A
dmin
istr
atio
n of
Cus
tom
s
Bon
ded
Log
istic
s Pa
rk
Set u
p in
pla
nned
ar
ea o
f fr
ee
trad
e zo
ne o
r sp
ecia
l por
t ad
jace
nt to
free
tr
ade
zone
Rel
y on
fre
e tr
ade
zone
and
por
t to
cap
ture
the
func
tiona
l ad
vant
age
of f
ree
trad
e zo
ne
and
port
. Dir
ect p
ass-
thro
ugh
type
cle
aran
ce c
hann
el is
es
tabl
ishe
d be
twee
n pa
rk
and
port
, so
rapi
d C
usto
ms
clea
ranc
e pr
oced
ure
of
“bat
ch-w
ise
exiti
ng a
nd
colle
ctiv
e de
clar
atio
n” c
an
be im
plem
ente
d. T
he p
ark
is
dom
inat
ed b
y lo
gist
ics
func
tions
and
has
no
man
ufac
turi
ng o
r pr
oces
sing
fu
nctio
n; n
o st
orag
e tim
e lim
it is
spe
ci fi e
d fo
r go
ods
in th
e pa
rk
Adm
inis
trat
ive
body
is
the
man
agem
ent
com
mitt
ee o
f the
loca
l bo
nded
are
a; th
e co
nsig
nor
and
the
thir
d-pa
rty
logi
stic
s co
mpa
ny a
ssum
e th
e ac
tual
ope
ratio
n
Enj
oy ta
x re
bate
aft
er e
nter
ing
the
park
St
ate
Cou
ncil
Free
Tra
de Z
one
Aro
und
the
port
It
has
the
func
tions
of
impo
rt a
nd
expo
rt p
roce
ssin
g, in
tern
a-tio
nal t
rade
, bon
ded
stor
age,
m
erch
andi
se e
xhib
ition
, etc
.
Adm
inis
trat
ive
body
is
the
man
agem
ent
com
mitt
ee o
f the
loca
l bo
nded
are
a; th
e co
nsig
nor
and
the
thir
d-pa
rty
logi
stic
s co
mpa
ny a
ssum
e th
e ac
tual
ope
ratio
n
Enj
oy ta
x re
bate
aft
er le
avin
g th
e co
untr
y St
ate
Cou
ncil
168 W.-l. Liu et al.
Tabl
e 6.
4 (c
ontin
ued)
Mod
e L
ocat
ion
Func
tiona
l pos
ition
ing
Log
istic
s m
anag
emen
t m
ode
and
oper
atin
g bo
dy
Reb
ate
polic
y A
ppro
val
auth
ority
Exp
ort P
roce
ssin
g Z
one
Not
lim
ited
Gen
eral
ly it
onl
y ha
s th
e fu
nctio
ns o
f pr
oces
sing
, m
anuf
actu
ring
, ass
embl
y,
war
ehou
sing
, etc
. And
ex
pand
ed e
xpor
t pro
cess
ing
zone
als
o ha
s th
e fu
nctio
ns
of b
onde
d lo
gist
ics,
R &
D,
test
ing,
mai
nten
ance
ser
vice
, et
c.
Ope
rate
d by
mul
tiple
en
terp
rise
s E
njoy
tax
reba
te a
fter
ent
erin
g th
e zo
ne
Stat
e C
ounc
il
Bon
ded
Port
A
roun
d th
e po
rt
Port
ope
ratio
n, in
tern
atio
nal
tran
sfer
, int
erna
tiona
l di
stri
butio
n, in
tern
atio
nal
purc
hase
, tra
nsit
trad
e,
bond
ed p
roce
ssin
g, im
port
an
d ex
port
mer
chan
dise
ex
hibi
tion,
goo
ds a
nd s
ervi
ces
exch
ange
, and
inve
stm
ent
and
fi nan
cing
insu
ranc
e
Adm
inis
tere
d by
a p
ort
man
agem
ent
com
mitt
ee a
nd th
e ac
tual
ope
ratio
n is
as
sum
ed b
y th
e co
nsig
nor
and
the
thir
d-pa
rty
logi
stic
s co
mpa
ny
Enj
oy ta
x re
bate
aft
er e
nter
ing
the
zone
St
ate
Cou
ncil
Com
preh
ensi
ve
Free
Tra
de
Zon
e
Inla
nd a
rea
Equ
al to
bon
ded
port
A
dmin
iste
red
by a
por
t m
anag
emen
t co
mm
ittee
and
the
actu
al o
pera
tion
is
assu
med
by
the
cons
igno
r an
d th
e th
ird-
part
y lo
gist
ics
com
pany
Enj
oy ta
x re
bate
aft
er e
nter
ing
the
port
St
ate
Cou
ncil
Sour
ce : L
i, M
ingd
ian,
Ren
yi, Z
hang
(20
07)
The
rel
atio
nshi
p am
ong
all s
peci
al w
ardi
ng z
ones
in c
usto
ms
bond
ed lo
gist
ics
syst
em [
J]. L
ogis
t Sci
-Tec
h (1
):95
–98
, and
“ C
ompa
riso
n of
Pol
icie
s fo
r F
ree
Trad
e Z
one
and
othe
r Z
ones
”. h
ttp://
ww
w3.
tjftz
.gov
.cn/
tzzc
/yqt
qyzc
bj/
1696 Hot Issues in China’s Logistics Development
Table 6.5 Demand for bonded logistics (of some bonded logistics supervision areas)
Bonded area Index Unit 2009 Cumulated total a
Free Trade Zone Added value Billion RMB 235.27 1790.45 Sales income 1463.87 7775.28 Total industrial output value 334.69 2085.64 Approved processing enterprises 190 2,113 Approved trading enterprises 2,939 14,916 Total tax revenue Billion RMB 121.79 700.19
Export Processing Zone
Added value Billion RMB 56.96 207.38 Total industrial output value 732.79 2893.98 Sales volume of industrial products 713.14 2848.25 Total pro fi t of industrial enterprise 14.12 54.72 Number of approved enterprises 246 1,491 Total tax revenue Billion RMB 7.47 17.89
Bonded Logistics Park
Added value Billion RMB 0.56 2.67 Operating revenue 5.79 28.59 Approved trading enterprises 256 761 Total tax revenue Billion RMB 32.45 82.36
Source : Compiled from relevant data on the website of China Free Trade Zone & Export Processing Zone Association. http://www.cfea.org.cn/show_news.asp?id=7692 a For the period of September 2000 to December 2009
and enjoys the most complete and most open policy. Bonded logistics park and bonded logistics center belong to the second level as their functions and policies are inferior to that of the bonded port. Export supervised warehouse and bonded warehouse belong to the third level and are akin to the early form of bonded logistics supervision areas (sites). The six modes include bonded port, compre-hensive free trade zone, bonded logistics park, logistics center, export supervised warehouse and bonded warehouse. In particular, a more complete regional net-work of bonded logistics supervision areas has taken shape in the Yangtze River Delta, the Pearl River Delta and the Bohai Rim Region in the East. The locations, numbers and scale of various bonded logistics supervision areas are shown in Table 6.6 .
6.2.2.4 Spatial Expansion of Bonded Logistics Supervision Areas from the East to the West
In recent years, the processing trade has undergone a rapid development in the Central and the Western regions and the tasks relating to supporting the bonded logistics network layout has also been accelerated constantly. Table 6.7 illustrates some of the speci fi c development projects. And in the 10 years since the implementation of the “Grand Western Development” strategy in 2000, the annual average growth
170 W.-l. Liu et al.
Table 6.6 General status of China’s Bonded Logistics Supervision Areas (Sites) by the end of 2009
Type Setting Approved area (km 2 )
Free Trade Zone Currently 13 free trade zones have been set up in Waigaoqiao of Shanghai, Dalian, Tianjin Port, Qingdao, Zhangjiagang, Ningbo, Fuzhou, Xiangyu of Xiamen, Shantou, Guangzhou, Shenzhen, Zhuhai and Haikou
41.32
Export Processing Zone
There are totally 57 export processing zones in China by the end of 2009
134.69
Bonded Logistics Center
Totally 27 bonded logistics centers, including those in Longtan Port of Nanjing, Suzhou High-tech Zone, Northwest Logistics Park of Shanghai, Tianjin Economic & Technological Development Area, Dongguan, Zhongshan, Guangzhou airport, Jiangyin, Taicang, Hangzhou, Qingdao, Rizhao, Xiamen Torch (Xiangan), Yingkou Port, Xi’an, Dongxihu District of Wuhan, Chengdu, Changsha Jinxia, Shanxi Fanglue, Nanchang, Shenyang, Shenzhen Airport, Lianyungang and Nanning, and Ningbo Lishe Bonded Logistics Center, Suzhou Industrial Park Bonded Logistics Center and Beijing Airport Bonded Logistics Center
–
Bonded Logistics Park
Totally seven bonded logistics parks in Waigaoqiao of Shanghai, Qingdao, Zhangjiagang, Ningbo, Xiamen and Shenzhen
8.63
Bonded Port Totally 13 bonded ports in Shanghai Yangshan, Tianjin Dongjiang, Dalian Dayaowan, Hainan Yangpu, Ningbo Meishan, Guangxi Qinzhou, Xiamen Haicang, Qingdao Qianwan, Qianhai Bay of Shenzhen, Guangzhou Nansha, Chongqing Cuntan Dual-way, Zhangjiagang, and Yantai
101.66
Comprehensive Free Trade Zone
Totally nine comprehensive free trade zones in Suzhou Industrial Park, Tianjin Binhai New Area, Beijing Tianzhu, Hainan Haikou, Guangxi Pingxiang, Heilongjiang Suifenhe, Shanghai Pudong Airport, Jiangsu Kunshan and Chongqing Xiyong
34.21
Source : Compiled from relevant content on the website of China Free Trade Zone & Export Processing Zone Association. http://www.cfea.org.cn . Data gathered up to the end of 2009
rate of total import and export value of processing trade in the Western region reached 25%, and the pace of development has caught up with and surpassed the Eastern region. Under this circumstance, China Customs has actively promoted the establishment of bonded logistics network in the Western region. By the end of 2009,
1716 Hot Issues in China’s Logistics Development
Table 6.7 Development of special customs supervision areas in the central and Western regions by the end of 2009
Type Time of fi rst establishment Development scale (Unit) Distribution area
Export Processing Zone
The fi rst four State-level export processing zones were estab-lished in Wuhan, Chengdu, Chongqing and Huichun with the approval of the State Council in April 2000
16 Jiangxi, Sichuan, Hubei, Chongqing, Anhui, Henan, Guangxi, Jilin, Shaanxi, Inner Mongolia, Yunnan and Xinjiang
Bonded Port Guangxi Qinzhou Bonded Port was established in May 2008
2 Guangxi Qinzhou Bonded Port and Chongqing Cuntan Dual-way Bonded Port Area
Comprehensive Free Trade Zone
Guangxi Pingxiang Comprehensive Free Trade Zone was established in December 2008
3 Guangxi Pingxiang, Heilongjiang Suifenhe and Chongqing Xiyong Comprehensive Free Trade Zone
Bonded Logistics Center
Hubei Wuhan Dongxihu Bonded Logistics Center was approved in December 2008
6 Hubei Wuhan, Shaanxi Xi/an, Sichuan Chengdu, Hunan Changsha, Shanxi Houma and Jiangxi Nanchang
Cross-border Industrial Zone
The establishment of China-Kazakhstan Khorgos Frontier Cooperation Zone was approved by the State Council in March 2006
1 Xinjiang
Source : Compiled from relevant content on the website of China Free Trade Zone & Export Processing Zone Association. http://www.cfea.org.cn , up to the end of 2009. Besides, Jilin and Heilongjiang provinces are included in the Central region in this table according to the partition of national districts of the “Seventh Five-Year” Plan
it has established a total of ten export processing zones and other special Customs supervision areas and set up 49 bonded supervision sites of all types, which has effectively driven the rapid development of processing trade and bonded logistics in the Western region. 6
6 Annual growth rate of processing trade in 10 years is 25% since implementation of the Grand Western Development strategy. http://news.xinhuanet.com/fortune/2009-12/04/content_12589662.htm
172 W.-l. Liu et al.
6.2.2.5 Increasingly Strengthened Service Capabilities of Bonded Logistics Enterprises
Responding to the trend of continual development of bonded logistics, bonded logistics enterprises in China also achieved a rapid growth. According to incomplete statistics, as shown in Table 6.8 , by the end of December 2009, there were totally 4,469 warehousing enterprises in China’s free trade zone, 195 warehousing enter-prises in export processing zone and 189 warehouse logistics enterprises in bonded logistics park.
To improve the service ef fi ciency and the bene fi t of bonded logistics, bonded logistics enterprises in all locales actively engaged in various business innovations. For instance, bonded logistics enterprises in Kunshan took advantage of the “24 h speedy inspection and clearance” passage and other innovative services set up by the Customs to shorten the response time of after-sales service of enterprises in processing zone to overseas customers by two working days on average, and reduced logistics cost by about 10%. Besides, bonded logistics enterprises in Weihai and Qingdao also actively conducted service innovation to improve their logistics service level and service capability.
6.2.3 Problems in China’s Bonded Logistics Supervision and Supporting Service System
Due to unbalanced regional development in China and historical reasons, many prob-lems exist in bonded logistics, including uneven regional distribution of special Customs supervision areas, sub-par management ef fi ciency and insuf fi cient supporting service
Table 6.8 Development of bonded logistics enterprises in some special customs supervision areas
Bonded area Indicator Unit 2009 Total by 2009 yearend
Free Trade Zone Operating revenue of logistics enterprise
Billion RMB 311.238 1,733.549
Approved warehouse logistics enterprises
– 450 4,469
Export Processing Zone
Operating revenue of logistics enterprise
Million RMB 1,167.222 2,405.842
Approved warehouse logistics enterprises
– 113 195
Bonded Logistics Park
Operating revenue of logistics enterprise
Billion RMB – –
Approved warehouse logistics enterprises
– 13 189
Source : Complied from relevant data on the website of China Free Trade Zone & Export Processing Zone Association. http://www.cfea.org.cn/show_news.asp?id=7692
1736 Hot Issues in China’s Logistics Development
systems. It is imperative for China to establish a bonded logistics system adapted to the needs of globalized operations of transnational corporations and diversi fi ed develop-ment of processing and manufacturing industry, so as to provide rapid, ef fi cient, safe and convenient bonded logistics services geared to international standards.
6.2.3.1 Improving the Spatial Distribution and Functional Positioning of Special Supervision Areas (Sites)
As seen in Tables 6.3 and 6.5 , bonded logistics special areas are unbalanced in regional distribution. For example, there are 11 bonded ports and six comprehensive free trade zones in the Eastern region and only two bonded ports and three compre-hensive free trade zones in the Central and Western regions. Also the market positioning of special supervision areas in the same region is unclear; for instance, bond operations for import can be carried out in free trade zones, bonded ware-houses and bonded logistics parks. Since bonded logistics centers, bonded logistics parks, export processing and many other special Customs supervision areas are simultaneously set up in many provinces or cities, their coexistence induces cut-throat competition among them. This condition also dilutes the throughput quantity of many bonded supervision areas that they fail to meet the volume requirement for scale bene fi t, and thus adversely affects their performance. Apparently, the estab-lishment of these special supervision areas in different locations of the same region results in functional overlapping and crisscrossing, wasted resources and the attenu-ation of bonded logistics in individual areas.
6.2.3.2 Limitation on Improvement of Customs Ef fi ciency in Bonded Logistics
Various supervision areas (sites) have been established successively in China, under different policies and having different functions. Besides, since a scienti fi c and effective mechanism for area interactive development has not been perfected, Customs supervision is confronted with many problems. For instance, these prob-lems include how to effectively supervise the circulation of goods in and among supervision areas (sites) of different types, and how to deal with the conditions of excessive turn-over duration, numerous linkages and inadequate administrative human resources. Besides, the low informatization level of various Customs super-vision areas (sites) and the nonuniform standards for establishment and operations of information platforms make it dif fi cult to effectively integrate and utilize import, export, transfer and storage data from different sites, and to form an ef fi cient and tight supervision chain. 7
7 Zhuang, Yan, Mingxiang Wang (2008) On the development of bonded logistics and perfecting of its supervision system [J]. Law Forum (4):195–199.
174 W.-l. Liu et al.
6.2.3.3 Level of Bonded Logistics Supporting Service System of Needing Improvement
At present, the establishment of bonded logistics supporting service system in China still needs to be improved. In the process of attracting logistics enterprises to settle in the free trade zone, many sites overlooked the docking of logistics network inside the special Customs supervision areas and that outside these areas (especially the hinterland), which made it dif fi cult to establish the cross-area logistics collaboration relationship. Many logistics enterprises in the free trade zone do not have the advantage in professional service level, service capability and operating quality; most of the logistics enterprises are con fi ned to transportation and warehousing business and incapable of providing comprehensive logistics services. In addition, due to the low level of socialization and systematization of China’s logistics operations, it is dif fi cult for logistics enterprises in the free trade zone to expand their scale, which slows the consolidation of demand for bonded logistics. 8
6.2.4 Key Measures for Integrating Special Customs Supervision Areas in China
In view of the multitude of problems regarding the organization and operations of the special Customs supervision areas, integration seems to be the main course of action for improvement. Several measures for achieving the systems integration are suggested below.
6.2.4.1 Rational Planning of Special Customs Supervision Areas (Sites)
It is mandatory for China to place emphasis on making rational planning and layout decisions for special Customs supervision areas (sites). The General Administration of Customs shall promptly issue ordinances to standardize the approval of special Customs supervision areas (sites) in the form of State administrative regulations. Relevant min-istries and commissions of the State Council shall jointly launch development planning and auditing standards for special supervision areas to set up the management system which not only accords with the nation’s macro development strategy but also conforms to the development demands and objective conditions of various locales. Moreover, entry and exiting system should also be established as quickly as possible to avoid the “emphasizing the approval process but overlooking the development” phenomenon by some local government, so as to ensure the sustainable development and expansion of special Customs supervision areas (sites) in China. 9
8 Chen, Daifen (2007) Bonded logistics park developmental pattern and countermeasure research [J]. Pract Theory Sezs (4):68–70. 9 Ran, Baosong (2008) Bonded logistics integration in sight [J]. China Logist Purch (17):32–35.
1756 Hot Issues in China’s Logistics Development
6.2.4.2 Effective Integration of Supervision Policy, Mode and Resources
An important measure for improving the ef fi ciency of Customs supervision is through integrating the means of supervision, including mainly policy integration, supervision mode integration and supervision resources integration. Policy integration is a key prerequisite for implementing the integration of supervision means, which mainly aims to unify the tax policies in various special supervision areas. Tax policy encom-passes protective tariff for overseas access to the area, tax rebate for access from outside, imposing tax for exiting from the area, and exemption of value-added tax and consumption tax inside the area. It also calls for uni fi ed foreign exchange, trade and industrial policies. Supervision mode integration refers to the establishment of inte-grated Customs clearance mechanism among special areas and corresponding uni-form supervision mode, operations fl ow and operating speci fi cation, to accelerate the establishment of information management platform and the progress of networking supervision in special areas. Supervision resources integration means to integrate and reorganize the manpower and physical resources scattered among the supervision net-work of various port logistics and bonded logistics nodes, to adjust the appropriation of corresponding personnel and organizations, and to strengthen the supervisory power in special supervision areas. 10
6.2.4.3 Expansion of Functions of Special Customs Supervision Areas (Sites)
Generally, all existing special Customs supervision areas have the bonded functions. However, the bonded functions in different areas have their own particular emphases, and can be divided into three categories. The fi rst category refers to bonded processing, such as export processing zone. The second one refers to bonded logistics, such as bonded logistics center, bonded logistics park and bonded warehouse. The third one combines the two afore-mentioned categories, such as bonded port area and comprehensive free trade zone. Based on the actual situation, integrating the functions of different areas (sites) is also vital in achieving the integration of special supervision areas.
This section describes the current status and problems in the development of China’s bonded logistics and proposes some essential measures for integrating the special Customs supervision areas. The development status shows that the demand for bonded logistics in China is increasing and the bonded logistics supervision areas have also grown rapidly in recent years. Along with the growth, the spatial distribu-tion of bonded logistics supervision areas has extended from the East to the West, the functions of bonded logistics supervision area tend to be integrated, and the service capability of bonded logistics enterprises has also improved continually.
10 Jiang, Yuchuan (2008) Integration and innovation of bonded Logistics system based on process-ing trade industry cluster [J]. Logist Sci-Tech (4):63–65.
176 W.-l. Liu et al.
Whereas the problems in the development are that the spatial distribution and functional positioning of the special supervision areas (sites) still have room for re fi nement, the ef fi ciency of bonded supervision by the Customs needs to be raised, and the level of bonded logistics supporting service system is in urgent need of improvement. To promote the integration of special Customs supervision areas in China, it is necessary to make rational planning, to effectively integrate the policies, modes and resources in different supervision areas and to actively expand the logis-tics functions of special Customs supervision areas.
6.3 Development Status of Green Logistics in China
In the past 20 years, China has made great progress in economic construction, yet problems of depletion of natural resources and environmental pollution are becoming increasingly severe. The Chinese Government has recently proposed to accelerate the transformation of its economic growth mode in a sustainable way. In 2011, the Government speci fi ed that emphasis would be laid on building a resource-conserving and environment-friendly society during the “12th Five-year Plan” (2011–2015) period.
Green logistics refers to a logistics form which plans and implements green trans-port, green storage, green packaging, green circulation processing, green recovery and other activities via advanced logistics technology. It aims to reduce environmen-tal pollution and resource consumption arising from logistics activity, so as to realize a “win-win” consequence in logistics development and eco-environmental conserva-tion. As an important avenue for realizing the sustainable development strategy, greater attention has been given to green logistics which will play an important role in industrial upgrading, transformation of economic structure, promotion of logistics development level and other relevant aspects.
This chapter describes the development trend of green logistics in China. First, it introduces the development background of green logistics in China; then it depicts the current status in terms of policy measures, facilities & equipment, operations organization, energy-saving and emission-reduction, recovery and reproduction, etc. Finally, it points out the existing problems concerning green logistics in China and proposes some suggested remedy measures.
6.3.1 Development Background of Green Logistics in China
6.3.1.1 The Greening of Global Economic Growth
With the steady increase in global population and economic scale, resource crisis, ecological damage, environmental pollution and other issues have drawn universal concern. It has been the consensus of the international community to attain socio-economic sustainable development through a greener economic pattern and life
1776 Hot Issues in China’s Logistics Development
style. Some developed countries create a new outlook in industrial & technical competition by increasing investment in the green economic fi eld, formulating and implementing various bills, plans and strategies, and strengthening the implemen-tation of green economic development strategy. Speci fi c measures of certain coun-tries implementing green economy are shown in Table 6.9 below.
With the increasing competition of international trade, more and more developed countries have formulated a series of environmental protection standards, the “green barrier,” to restrict the entry of foreign products or services which are not environ-mentally sound. For example, in 2003 the European Union enacted the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment and the Waste Electrical and Electronic Equipment Directive , involving collecting electronic waste recovery charges, which in fl icted a heavy blow on China’s electric appliance trade. In 2008, the European Union passed an act to integrate interna-tional airline industry into its emission trading system, which made China’s airlines industry face severe challenge in European business development. “Green barrier” and higher requirements from developed countries in environmental protection of all kinds of products and services brought immense challenges to China’s foreign trade and international logistics development.
6.3.1.2 Transformation of China’s Economic Growth Mode
As the second largest energy production and consumption country in the world, China witnessed an increasingly acute contradiction between limited energy resource and sustainable economic growth, and the severe environmental problems. Being a component of green economy, green logistics plays an important role in promoting national industrial upgrading and transformation of economic structure. For example, green transportation seeks to optimize transport routes and selects the transportation tools with low energy consumption and high ef fi ciency to save energy, reduce exhaust emission, and meanwhile lower transport cost and increase transportation ef fi ciency. For another example, recovery and recycling of products can reduce wastes and environmental pollution, as well as saving materials and manufacturing costs, and in addition, spur the burgeoning re-manufacturing industry. Development of green logistics service can not only generate good social and environmental bene fi ts, but also serve as a driver for transforming China’s economic growth mode and promoting its sustainable development.
6.3.1.3 Transition and Upgrading of China’s Logistics
Up to the present time, China’s logistics has attained a level of rudimentary develop-ment in general, but the logistic cost paid for economic growth is relatively high. Green logistics is bene fi cial to the transformation from the rudimentary and low-ef fi ciency mode to the intensive, high-ef fi ciency and sustainable growth mode, thus improving
178 W.-l. Liu et al.
Tabl
e 6.
9 Sp
eci fi
c m
easu
res
of c
erta
in c
ount
ries
impl
emen
ting
gree
n ec
onom
y
Nat
ion
Em
issi
on r
educ
tion
targ
ets
Ince
ntiv
e m
easu
res
(tax
cut
s, in
vest
men
t, et
c.)
Maj
or b
ills
or p
lans
U.S
.A.
Com
pare
d w
ith 2
005,
em
issi
on in
202
0 an
d 20
50 w
ill b
e re
duce
d by
17
and
83%
, re
spec
tivel
y
Gre
en p
rodu
cts
enjo
y ex
port
tax
reba
te a
nd e
xpor
t cr
edit
loan
; pro
vide
tax
offs
ettin
g pr
ivile
ge f
or
rene
wab
le e
nerg
y po
wer
pro
ject
s
Com
preh
ensi
ve N
atio
nal E
nerg
y St
rate
gy o
f 199
8 20
05 N
atio
nal E
nerg
y Po
licy
Act
Th
e A
mer
ican
Cle
an E
nerg
y an
d Se
curi
ty A
ct o
f 200
9 Fr
om 2
004
to 2
006,
allo
cate
3.4
bill
ion
USD
an
nual
ly to
sta
te g
over
nmen
ts in
reco
veri
ng o
ld
hous
ehol
d el
ectr
ic a
pplia
nces
and
enc
oura
ging
th
e pu
rcha
se o
f en
ergy
-con
serv
ing
prod
ucts
In
vest
150
bill
ion
USD
in g
reen
ene
rgy
fi eld
to
crea
te fi
ve m
illio
n em
ploy
men
t opp
ortu
nitie
s In
vest
15
billi
on U
SD in
low
-car
bon
tech
nolo
gies
lik
e re
new
able
ene
rgy,
cle
an c
oal t
echn
olog
y,
carb
on c
aptu
re a
nd s
tora
ge (
CC
S) te
chno
logy
, en
viro
nmen
tal p
rote
ctio
n, e
tc. i
n fu
ture
10
year
s
1796 Hot Issues in China’s Logistics Development N
atio
n E
mis
sion
red
uctio
n ta
rget
s In
cent
ive
mea
sure
s (t
ax c
uts,
inve
stm
ent,
etc.
) M
ajor
bill
s or
pla
ns
Eur
opea
n U
nion
C
ompa
red
with
199
0, e
mis
sion
in 2
020
and
2050
will
be
redu
ced
by 2
0 an
d 80
%,
resp
ectiv
ely.
(A
ggre
gate
d em
issi
on o
f Eur
opea
n U
nion
in 1
990
is 4
,007
Mto
ns)
Impl
emen
t pre
fere
ntia
l pol
icy
to g
reen
pro
duct
s in
term
s of
tax
reve
nue,
loan
and
exp
ort
Den
mar
k (1
990)
: The
“M
easu
res
for
Was
te T
reat
men
t and
Rec
over
y ”
Inve
st 1
05 b
illio
n U
SD in
gre
en e
cono
mic
fi el
d pr
ior
to 2
013
so a
s to
sol
idif
y its
wor
ld-w
ide
lead
ing
posi
tion
in e
nvir
onm
enta
l pro
tect
ion
fi eld
Ger
man
y ( 20
00 ):
The
“ R
enew
able
E
nerg
y P
rior
ity
Law
” T
he U
K(2
009)
: The
“ Lo
w C
arbo
n Tr
ansi
tion
Pla
n ”
The
Eur
opea
n E
nerg
y an
d C
limat
e Pa
ckag
e Pl
an:(
six
item
s in
clud
ing
amen
dmen
t to
EU
em
issi
ons
trad
ing
sche
me,
de
cisi
on o
n ta
sk a
lloca
tion
of
EU
mem
ber
coun
try’
s su
ppor
ting
mea
sure
s, le
gal
fram
ewor
k fo
r ca
rbon
cap
ture
an
d st
orag
e (C
CS)
, ren
ewab
le
reso
urce
dir
ectiv
es, a
utom
obile
C
O 2 e
mis
sion
pla
nnin
g an
d fu
el
qual
ity d
irec
tives
) Ja
pan
Com
pare
d w
ith 2
005,
em
issi
on in
202
0 an
d 20
50 w
ill b
e re
duce
d by
15
and
60–8
0% r
espe
ctiv
ely
Inve
st 1
,600
bill
ion
JPY
(eq
ualin
g 16
bill
ion
USD
) in
ren
ewab
le e
nerg
y an
d gr
een
car
in 2
009;
B
asic
Law
for
the
Est
abli
shm
ent o
f a
Rec
ycli
ng-o
rien
ted
Soci
ety
(200
0)
2008
Fuk
uda
blue
prin
t Pr
ovid
e su
bsid
ies
for
ener
gy-c
onse
rvin
g ho
useh
old
elec
tric
app
lianc
es a
nd e
lect
ro m
obile
s; p
rom
ote
ener
gy e
f fi ci
ent r
esid
entia
l bui
ldin
gs; o
ffer
in
tere
st-f
ree
loan
for
the
“gre
en”
ente
rpri
ses
Gre
en E
cono
my
and
Soci
al
Cha
nge
Poli
cy D
raft
(20
09)
180 W.-l. Liu et al.
the industry’s competitiveness. For example, green logistics can not only achieve energy conservation and emission reduction, but also improve the logistics operations ef fi ciency and raise customer service value. Furthermore, green logistics system built by introducing, adopting and creating green technology can provide powerful technical support for the transformation of logistics development mode, thus promoting the specialization and socialization of China’s logistics. It is thus clear that development of green logistics is not only an important measure for the logistic industry to respond to the objective requirements of sustainable development, but also an ef fi cient path to speed up logistics optimization and realize transition of development mode.
6.3.2 Development Status of Green Logistics in China
6.3.2.1 Various Policies and Measures Issued by the Government
In recent years, China has attached great importance to the development of green logistics by issuing a series of laws and regulations as shown in Table 6.10 . These laws and regulations have made provisions on the integration of logistics organiza-tions, manufacturer’s production, circulation, and recycling responsibility; they have also made progress in promoting the development of green logistics.
Apart from issuing laws and regulations, ministries and commissions and local governments have further steered the development of green logistics by establishing pilot units, awards and various other methods. From 2003 to 2005, the National Development and Reform Commission had successively chosen Qingdao, Hangzhou, Beijing and Tianjin as experimental cities for recovery processing of four types of household appliance wastes. In March of 2008, the National Development and Reform Commission designated 14 manufacturers of whole vehicle, complete appliance and spare parts, including China FAW Group Corporation, to develop the recycle logistics of vehicle spare parts and the experimental units for remanufacturing. In January of 2010, the Ministry of Transportation and the National Development and Reform Commission jointly issued the Announcement of Improving Drop and Pull Transport which required certain quali fi ed regions to organize and launch the experimental unit of drop and pull transportation, to improve highway freight transport logistics ef fi ciency as well as energy saving and emission reduction. In May of 2010, the Ministry of Transportation launched the special movement on green transportation of “vehicle, ship, road and port” of 1,000 enterprises in the whole nation. Moreover, local governments of Shandong, Liaoning, Hunan, etc. successively issued reward policies for energy conservation to actively provide favorable policy assurance for the development of green logistics.
6.3.2.2 The Greening of Logistics Infrastructure and Equipment
As for transportation infrastructure, the low-carbon and environmentally friendly fea-tures of railway transportation make it much more superior to highway transportation. Take Datong – Qinhuangdao Railway for example: in 2010, this rail line accomplished
1816 Hot Issues in China’s Logistics Development
Tabl
e 6.
10
Rel
evan
t pol
icie
s, r
egul
atio
ns a
nd m
anag
emen
t met
hod
for
gree
n lo
gist
ics
of r
ecen
t yea
rs in
Chi
na
Tim
e is
sued
T
itle
of m
easu
res
or r
egul
atio
ns
Issu
ing
agen
cy
Con
tent
s
2006
–200
2 M
easu
res
for
Adm
inis
trat
ion
of th
e Po
llut
ion
Con
trol
of E
lect
roni
c In
form
atio
n P
rodu
cts
Min
istr
y of
Inf
orm
atio
n In
dust
ry,
Nat
iona
l Dev
elop
men
t and
R
efor
m C
omm
issi
on a
nd o
ther
fo
ur m
inis
trie
s an
d co
mm
issi
ons
Spec
i fi c
prov
isio
ns o
n th
e de
sign
of
prod
ucts
and
pa
ckag
ing,
mat
eria
ls a
nd p
roce
ss s
elec
tion,
tech
nol-
ogy
adop
tion,
res
pons
ibili
ty u
nder
take
n by
ent
erpr
ises
2007
–20
03
Mea
sure
s fo
r A
dmin
istr
atio
n of
R
enew
able
Res
ourc
es
Min
istr
y of
Com
mer
ce, N
atio
nal
Dev
elop
men
t and
Ref
orm
C
omm
issi
on a
nd o
ther
fou
r m
inis
trie
s an
d co
mm
issi
ons
Prop
osal
for
con
trol
ling
and
redu
cing
env
iron
men
tal
pollu
tion
caus
ed b
y di
spos
al o
f el
ectr
onic
pro
duct
s
2007
–200
9 M
easu
res
for
Supe
rvis
ion
of
Pre
vent
ion
and
Con
trol
on
Poll
utio
n E
nvir
onm
ent f
rom
E
lect
ron
Was
tes
Min
istr
y of
Env
iron
men
tal
Prot
ectio
n of
the
Peop
le’s
R
epub
lic o
f C
hina
Prov
isio
ns o
n di
sass
embl
y, u
tiliz
atio
n, d
ispo
sal,
tech
nica
l m
etho
ds a
nd lo
catio
n fo
r st
orag
e of
ele
ctro
nic
appa
ratu
s, a
nd r
equi
rem
ent f
or e
nter
pris
es to
est
ablis
h re
cove
ry s
yste
m c
onfo
rmin
g to
nat
iona
l sta
ndar
d 20
07–2
010
Ene
rgy
Con
serv
atio
n L
aw o
f the
Pe
ople
’ s R
epub
lic
of C
hina
T
he S
even
teen
th M
eetin
g of
the
Ele
vent
h N
atio
nal P
eopl
e’s
Con
gres
s St
andi
ng C
omm
ittee
Con
tent
s co
ncer
ning
ene
rgy
savi
ng in
tran
spor
tatio
n:
guid
elin
es f
or tr
ansp
ort e
nter
pris
es to
impr
ove
the
leve
l of
orga
niza
tion
and
inte
nsi fi
catio
n in
tran
spor
ta-
tion;
for
mul
atio
n of
lim
itatio
n st
anda
rd o
f fu
el
cons
umpt
ion
for
tran
spor
t veh
icle
s an
d sh
ips,
etc
20
08–2
008
The
Cir
cula
r E
cono
my
Pro
mot
ion
Law
of t
he P
eopl
e ’ s
Rep
ubli
c of
C
hina
The
Ele
vent
h N
atio
nal P
eopl
e’s
Con
gres
s St
andi
ng C
omm
ittee
Pr
ovis
ions
on
disa
ssem
blin
g an
d re
cycl
ing
of w
aste
el
ectr
onic
app
arat
us a
s w
ell a
s re
man
ufac
turi
ng o
f sp
are
part
s of
mot
or v
ehic
le, e
ngin
eeri
ng m
achi
nery
, m
achi
ne to
ol a
nd o
ther
pro
duct
s 20
09–2
002
Reg
ulat
ion
on th
e A
dmin
istr
atio
n of
R
ecov
ery
and
Dis
posa
l of W
aste
E
lect
rica
l and
Ele
ctro
nic
Pro
duct
s
The
Sta
te C
ounc
il St
ipul
atio
n fo
r en
terp
rise
s to
impl
emen
t mul
ti-ch
anne
l re
cycl
ing
and
cent
raliz
ed d
ispo
sal o
n w
aste
ele
ctro
nic
and
elec
tric
al p
rodu
cts;
del
inea
tion
of th
e re
spon
si-
bilit
ies
unde
rtak
en b
y en
terp
rise
s in
est
ablis
hing
w
aste
pro
duct
s pr
oces
sing
fun
ds
(con
tinue
d)
182 W.-l. Liu et al.
Tabl
e 6.
10
(con
tinue
d)
Tim
e is
sued
T
itle
of m
easu
res
or r
egul
atio
ns
Issu
ing
agen
cy
Con
tent
s
2009
–200
3 A
djus
tmen
t and
Rev
ital
izat
ion
Pla
n fo
r L
ogis
tics
Ind
ustr
y T
he S
tate
Cou
ncil
Req
uiri
ng lo
gist
ics
indu
stry
to la
y em
phas
is o
n en
ergy
sa
ving
and
env
iron
men
tal p
rote
ctio
n an
d re
duce
ex
haus
t em
issi
on a
nd tr
af fi c
jam
; enc
oura
ging
en
terp
rise
s to
acc
eler
ate
deve
lopm
ent o
f pr
oduc
t and
pa
ckag
ing
recy
clin
g lo
gist
ics
and
was
te m
ater
ial
logi
stic
s, th
us p
rom
otin
g re
sour
ces
cons
erva
tion
and
cycl
ic u
tiliz
atio
n 20
11–2
003
The
Twel
fth
Fiv
e-Ye
ar P
lan
for
Nat
iona
l Eco
nom
ic a
nd S
ocia
l D
evel
opm
ent o
f the
Peo
ple ’
s R
epub
lic
of C
hina
Cen
tral
Com
mitt
ee o
f th
e C
omm
unis
t Par
ty o
f C
hina
St
atin
g th
at o
ne m
ain
issu
e of
the
“12t
h Fi
ve-Y
ear
Plan
” is
to d
evel
op k
ey te
chni
cal e
quip
men
t, pr
oduc
t and
se
rvic
es w
hich
are
ene
rgy-
ef fi c
ient
, adv
ance
d,
envi
ronm
enta
lly-
frie
ndly
, and
apt
to c
yclic
util
izat
ion
of r
esou
rces
; aim
ing
at th
e ta
rget
of
redu
cing
CO
2 em
issi
on p
er u
nit o
f G
DP
by 1
7% c
ompa
red
with
that
of
201
0, a
nd in
clud
ing
the
goal
as
the
new
ly p
lann
ed
rest
rict
ion
indi
cato
r
1836 Hot Issues in China’s Logistics Development
shipment volume of 400 million tons. If the same volume was carried by highway transportation, the energy consumption and carbon emissions would be 46.3 and 56.9 times of that of the railway. 11 In recent years, railway in China has increased freight transportation capability continually by various approaches, which objectively promoted the development of green logistics in China. The fi rst approach is to construct large-scale infrastructures. For example, during the “11th Five-Year Plan (2006–2010),” fi xed investment on railway in China accumulated to 243 billion RMB, with newly-increased lines of 14,700 km. The second approach is to enhance the heavy-load transportation development efforts. Currently, busy main railways have generally operated freight trains of 5–6.5 kilotons; some special railway lines for transporting coal have utilized heavy-load composite trains of 10 and 20 kilotons. The third approach is to sweepingly develop high-speed railways and increase freight transport capacity by separating pas-sengers and freight. Take the fi ve high-speed railways, namely Beijing-Tianjin, Wuhan-Guangzhou, Zhengzhou-Xi’an, Shanghai-Nanjing and Shanghai-Hangzhou as example. The overall freight transport capacity of the existing regular lines released through these passenger high-speed railways amounts to 230 million tons per year.
Development of greening the logistics equipment is mainly re fl ected in the fol-lowing two aspects. First, enterprises have continually improved the professionaliza-tion and modernization level of logistics transport vehicle and optimized the structure of transporting equipment. For example, some logistics enterprises have purchased new freight trains conforming to Euro III emission standards and improved the energy conservation and emission reduction technology level of their refrigeration equipment. Second, they have strengthened the renovation and cyclic utilization of logistics facilities and equipment. Due to rapid development of logistics in China, logistics facilities and equipment are also increased in number accordingly; in order to reduce environmental pollution and carbon emission, some enterprises are increas-ing the cyclic utilization of their logistics facilities and equipment. These actions, for instance, include reusing packing material, disassembling and recycling waste logis-tics equipment, and rebuilding the existing logistics facilities.
More attention is also given to low-carbon consideration in logistics park planning and construction. In 2010, the planning of fi rst domestic low-carbon logistics park – Anhui Yimin low-carbon logistics park passed the review process and brought the concept of “green and low-carbon” logistics into park planning for the fi rst time; it also performed targeted planning and design on low carbon standard in transportation management, warehousing management, product packaging and other links.
6.3.2.3 Continual Optimization of the Organizational Modes of Logistics Operations
Multimodal transport is one of the important modes for green transport, and is being continually improved in China. Currently, multimodal transport channel
11 On-the-spot Report of Heavy-load Railway Development in China. http://www.peoplerail.com/xinwen/20101226/n354846828.html
184 W.-l. Liu et al.
with closer links between railway and sea transportation is basically formed in China. Presently China has 56 regular sea-rail combined transport lines, account-ing for 62% of regular railway container lines. Besides, continuous optimization of logistics operation and organizational mode in China is also re fl ected in the following aspects: (1) optimizing transportation routes, (2) actively applying drop and pull, roll on/roll off operation and other modes of transportation, (3) imple-menting joint pickup and distribution to reduce empty load ratio, (4) installing electronic toll collection on expressway to reduce stopping and re-starting of highway transportation vehicles. Continually improved logistics operation and organization guarantees the optimization and ef fi ciency of transportation process, and reduces energy waste and environmental pollution, thus enhancing the devel-opment of green logistics. For example, on March 30, 2007, Yantai Communication and Transportation Bureau of Shandong Province tested the drop and pull trans-portation for the fi rst time and succeeded; it then formally developed the land-sea drop and pull transportation experimental site in February, 2008. In November, 2011, the fi rst group of drop and pull transportation experimental unit in Zhejiang passed the review process; in December, 2011, the fi rst group of drop and pull transportation experimental enterprises for highway freight of Shaanxi Province was launched in Baoji. Meanwhile, the Ministry of Transport is promoting the demonstration network project for electronic toll collection system on two major expressways: the Beijing-Tianjin-Hebei Expressway and the Shanghai-Jiangsu-Anhui- Jiangxi-Fujian Expressway. These projects are intended to substantiate the interconnection and intercommunication, and to realize trans-provincial/municipal operations of electronic toll collection network system by the end of January, 2012.
Continual optimization of logistics operation and organizational mode cannot be done without the extensive use of information technology. In 2009, “the project of accelerating the construction of industries bene fi cial to information resource sharing and regional logistics public information platform” was listed as one of nine key logistics projects in the Adjustment and Revitalization Plan for Logistics Industry issued by the State Council. Under the guidance of this project, some provinces and cities successively launched or opened their public logistics infor-mation service platform. For instance, in September, 2010, the public logistics information platform of Shandong Province was opened in Jinan, which initiated the “operator+IT enterprises” logistics information service mode in China, and is the fi rst provincial level public logistics information service platform led by the Central Government and jointly constructed by multiple departments of the pro-vincial government. In October, 2011, the “international logistics information ser-vice platform at Yantian Port” of Shenzhen was formally launched. Built on the current Yantian international supply chain e-commerce platform, the Yantain platform with 26,000 registered users generated 60 million clicks in a year at the initial stage of its implementation. These platforms will effectively improve the logistics information sharing service and promote the linking and integration of supply and demand of logistics resources, thus advancing the development of green logistics.
1856 Hot Issues in China’s Logistics Development
6.3.2.4 Strengthening the Energy Saving and Emission Reduction of Logistics Enterprises
Under the backdrop of incessant high energy prices and sustainable development prompted by the Government, logistics enterprises have started to take measures one after another to speed up the development of green logistics. For sea transporta-tion, shipping companies adopt the following modes: (1) replace larger ships with smaller ones to improve the scale effect; (2) slow down the speed of ships to reduce energy consumption; (3) standardize the ship types; (4) utilize power supply from land when docking at port. For highway transportation, several energy-saving modes are taken: (1) weed out aged vehicles and encourage purchasing new ones conform-ing to Euro III emission standards; (2) popularize drop and pull transportation and carry out intensi fi ed management; (3) adopt GPS/GIS and other information tech-nologies. In aviation, airlines continue to optimize their fl ight routing and adopt advanced technology, equipment and airplane type to realize energy conservation, emission reduction and ef fi ciency enhancement. Moreover, domestic logistics industries actively take part in relevant international standard certi fi cation to pro-mote energy saving and emission reduction. In 2010, logistics center of Wujiang economic and technical development zone passed the ISO14064 greenhouse gases emission inspection of the Quality Certi fi cation Center in China and was the fi rst logistics enterprise that passed the inspection of the system. Meanwhile, the Wujiang centre became the second “low-carbon logistics” piloting enterprise, following UPS Inc., to pass the international standard certi fi cation in global logistics industry.
Under the dual actions of active guidance from the Government and the aggres-sive emission reduction of the enterprises, the growth rate of carbon emission from logistics in China decreases conspicuously as shown in Fig. 6.4 . During 2006–2009, the growth rate of CO
2 emission discharged by the communications and transportation,
storage and postal industries reduced from 19.8 to 2.7%. Meanwhile, the average
467.35
428.60
480.71493.62
19.8
9.0
2.92.7
380
400
420
440
460
480
500
2006 2007 2008 2009Year
CO
2 E
mission
(M
illio
n T
ons)
0
5
10
15
20
25
Gro
wth
Rat
e (%
)
Fig. 6.4 CO 2 emission and growth rate of communications and transportation, storage and postal
industries in China for 2006–2009 ( Source : Compiled from the China Energy Statistical Yearbook (2007–2010), published by the National Bureau of Statistics of China)
186 W.-l. Liu et al.
growth rate of carbon emission was 4.8%, which is lower than that of the GDP (10.9%) and that of the logistics industry (12.1%) during corresponding period.
Note: According to the guidelines of greenhouse gases introduced by IPCC, the physical energy takes into account of coal, coke, crude oil, gasoline, kerosene, diesel oil, natural gas, fuel oil and electric power for terminal consumption. Among them, electric power belongs to secondary energy. For communications and transportation, storage and postal industries, their terminal energy consumption is of the primary type; but electric power consumed by industrial operations will also lead to increase of CO
2 emissions, therefore it is also taken into consideration in the statistics.
6.3.2.5 Emergence of Recycle Logistics and Remanufacturing
Recycle logistics and remanufacturing are important avenues toward realizing the target of sustainable development and also the main contents of green logistics. Currently, China possesses over 6,700 recycling enterprises, 230,000 registered recycling websites and more than 5,300 recycling and processing plants, with a total of 1.9 million employees. 12 For automobile industry, it holds 492 automobile recy-cling enterprises with quality certi fi cation and 1,772 recycling websites nationwide 13 For the electronic products industry, Guangdong, Jiangsu, Hubei, Fujian, Shanghai and other provinces and cities also have had numerous electronic products recycling and remanufacturing enterprises.
Though most small- and medium-sized enterprises in China possess low resource recovery and remanufacturing technology, some large-scale enterprises (e.g. Sinotruk Jinan Fuqiang Power Co., Ltd. engaged in engine remanufacturing, etc.) have elevated the level of recycling, processing and utilization and remanufacturing technology by technology transfer or extending the chain of operations. Through years of development, these specialized recycling and remanufacturing enterprises have emerged and stepped onto the path of industrialized development. A continuously circulating and mutually enhancing green circulation market system of “production – consumption – reuse” is taking shape.
6.3.3 Problems in Development of Green Logistics and Corresponding Countermeasures
Green logistics in China is still in the preliminary stage in spite of its tangible progress in recent years. Facing with many problems, green logistics still has a long way to a normalized and scienti fi c state. It is therefore necessary to carry out
12 Supporting venous industries and consolidating circular economy links. China Resources Recycling Association, 2009. 13 Long, Shaohai (2010) Recycling and disassembly industry of scraped car in China will step onto the road of healthy and steady development. Resour Compr Util China 11.
1876 Hot Issues in China’s Logistics Development
adjustment and improvement regarding policy system, operations organization, technical equipment, authentication, monitoring, etc.
6.3.3.1 Problems in Green Logistics in China
Lack of Environmental Protection Consciousness in Enterprises
The logistics industry in China has had a late start, so its business logistics system is mainly targeted at increasing market share and boosting ef fi ciency. Admittedly some large- and medium-sized enterprises have recognized the impact of logistics activities on environment and have begun to diligently implement green production and circulation. Yet most enterprises have limited awareness of green logistics; they lack a sense for social responsibility, are unaware of the effect of green logistics on cost reduction and ef fi ciency improvement or the positive image value brought on by green logistics. Generally green logistics is not yet the proactive choice for most enterprises.
Restriction on Development Due to Management System
The current economic management system and operations mechanism in China are evolved from gradual reformation of the traditional planned economic system, so there exist obvious industry segmentation, regional barriers and other related prob-lems. Green logistics highlights those problems even more owing to its involvement with environmental protection, energy, transportation, foreign trade and other indus-tries and systems. Since the governments’ administrative sectors and the operations mechanism in all industries are independent, this tends to result in redundancy in construction of logistics base and waste in logistics resources, thus further increas-ing the detrimental impact of logistics on environment.
Further Improvement of Technical and Equipment Level Needed
Comparing to developed countries, China still lags behind in technology and equipment for green logistics, and the ability for enterprises to employ green logistics technology still needs to be improved. So far, in the fi eld of green logis-tics for agricultural products, the cold storage capacity per capita in China is only 7 kg, less than 10% of that in the U. S.; the percentage of refrigerated thermal insulation vehicles in all freight vehicles is merely 0.3% in China versus 1% in the U. S., showing a wide gap between China and developed countries. Moreover, in the fi eld of recycle logistics, most of the reverse logistics enterprises in China are small scale, backward in technical level and have low resource recovery and utili-zation rate. For example, China has about 500 automobile recycling enterprises, but
188 W.-l. Liu et al.
most of them are small- and medium-sized enterprises, each reclaiming and disas-sembling less than 300 automobiles a year, making it hard to realize a higher capacity scale and bene fi ts.
Weak Basis for Standardization, Authentication and Monitoring
The weak basis for logistics standardization in China hampers the improvement of the level of green logistics. First, different modes of transport have different equip-ment standards; for example, the standards for containers by sea and by railway are different, which hinders the expansion of rail-sea combined transport. Second, mis-match exists in standards for logistics instrument; lack of effective linkage between logistic package standards and logistics facility standards affects the loading rate of transport media, the load factor of materials handling facilities and the space utiliza-tion rate of storage facilities. Third, the weak basis for logistics standardization in China results in fl awed authentication and monitoring system for green logistics. Other related systems regarding statistics, assessment, rewards and penalties are still under formulation and or in progress.
6.3.3.2 Measures for Development of Green Logistics in China
In the process of promoting green logistics, the Central and all local governments must play the role as promoters and the enterprises must bear the responsibility for cooperating actively. Green logistics can attain an effective development only by way of positive interaction, restraint and coordination between the governments and enterprises. The following are four proposed measures on developing green logistics in China, with respect to obligations and responsibilities by the governments and the enterprises; the former three thereof are mainly the duty of the governments in the areas of stipulating policies, formulating laws and regulations and setting up stan-dards; the last one relies on the enterprises to put into practice and actualize the green logistics, based on the premise of balancing the business interest and social bene fi t.
Building of Green Logistics Policy System
First, the Government must further complete and substantiate the environmental legislation, green subsidies, tax support, and preferential loaning policies; acting as the principle player to restraint, guide and encourage the logistic enterprises. Second, the Government should support and encourage enterprises to perform their own R&D, to create, apply and promote green logistics technology, on the basis of introducing and adopting international advanced technologies, so as to enhance the logistics ef fi ciency and reduce environmental pollution. Finally, it needs to institute speci fi c policies regarding informatization construction, specialization and integra-tion of logistics parks, in order to upgrade the level of greening the logistics parks.
1896 Hot Issues in China’s Logistics Development
Further Optimization of Green Logistics Operations Organization
First, all government departments should speed up the building of logistics management and public information platform relating to green logistics to realize the optimiza-tion of organizational mode and effective resource integration through information technology, and further reduce waste of resources and logistics emissions. Second, the Government should further promote multimodal transport such as rail-sea combined transport and river-sea combined transport to improve their connection and the logistics ef fi ciency. Finally, it should push forward positively the organiza-tional networking of logistic resources to achieve joint distribution among enter-prises, to effectively solve the problems in China’s logistic industry, including low utilization rate of logistics distribution facilities, unreasonable layout, redundant construction, etc.
Improvement of Authentication and Monitoring System for Green Logistics
First, the Government should speed up the revision of standards regarding green transportation, warehousing, package and circulation processing, so that related technology, management and service have rules to follow and laws to abide by. Second, it should build the evaluation, authentication and information publishing system of logistics carbon emissions and implement a rating system of energy saving and emission reduction. Third, it ought to put the extended producer respon-sibility (EPR) into practice to require the producer to take charge of product recy-cling and disposal after consumption; set speci fi c reclaiming ratio requirements and reward and penalty mechanism for respective industries. Finally, it must set up a sound social logistics statistics index system and attach importance to the acquisi-tion, consolidation and publishing of green logistics basic data.
Enhancement on the R&D on Green Logistics Technology and Equipment
First, the logistics enterprises must develop new energy sources and employ envi-ronmental protection vehicles to promote the development of clean and ef fi cient transport technology. Second, they should strengthen the development of cold chain logistics technology and equipment to solve various technical or equipment prob-lems regarding heat preservation, refrigeration, and energy saving for freight vehi-cles and vessels in transport. Third, they ought to develop technologies in design, production, reclamation, disassembly and reproduction to provide potent technical support for reverse logistics. Finally, they should continue to strengthen the use of advanced information technology to improve the overall green logistics information management level.
This section depicts the present situation of green logistics in China and gives an analysis of its development background, current status, existing problems and measures for promoting the development of green logistics. Green logistics not only
190 W.-l. Liu et al.
complies with the green revolution in the development trend of the world economy but also meets the objective requirement of economic transformation and the transi-tion and upgrade of logistics industry in China. Considering the present status of green logistics, China has made some progress in this area on policy guidance, green revolution of facilities and equipment, optimization of logistics operations organization, industrial energy saving and emission reduction, reclamation and reproduction.
Development of green logistics is still at the preliminary stage in China, so there are many problems which need further adjustment and improvement. Several measures on policy systems, operations organization, authentication and monitoring, technology, and equipment are suggested for actions to be taken by the Government and the logistics industry.
191B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9_7, © Springer-Verlag Berlin Heidelberg 2013
The year of 2011 had wrought much complexity to China’s economic situation. On the one hand, China accelerated its transformation of economic development mode and promoted the strategic adjustment of economic structure, leading to a rapid and steady development of its national economy. On the other hand, by posi-tively implementing the Adjustment and Revitalization Plan for Logistics Industry issued in 2009 by the State Council and promulgating a number of policy docu-ments to promote industrial transfer and restructuring as well as construction of the rural circulation system, governments at all levels created a favorable macro envi-ronment for a holistic and rapid development of its logistics industry. This chapter provides a summary of the discussions in the preceding chapters, and offers some conclusions and an outlook for the logistics development in China.
7.1 Development Environment of China’s Logistics
In term of economic environment in 2010, the growth in international trade rapidly recovered from the aftermath of the global fi nancial crisis and the domestic logistics demand rose steadily as well. Since China has continued to increase the input in transport infrastructure in recent years, the construction of logistic infrastructure has seen some tangible results and an integrated transport system has taken shape. However, due to in fl ation the cost of various production factors also hiked percepti-bly, posing a mounting cost pressure on the logistics enterprises.
L. Wang (*) Logistics Research Center , Nankai University , No.94 Weijin Rd. , Nankai District Tianjin 300071 , P.R. China e-mail: [email protected]
Chapter 7 Conclusions and Outlook
Ling Wang
192 L. Wang
In term of policy environment, in 2010, relevant departments and governments at all levels developed special plans and local ordinances for implementing the general stipulations set by the Adjustment and Revitalization Plan for Logistics Industry . The Central Government also introduced measures to speed up the construction of rural and agricultural circulation system, giving great importance to the rural mar-ket. All these measures provide the necessary policy assurance for the development of China’s logistics. In the meantime, China successively put forward a number of documents to promote industrial transfer and restructuring and provide guidance for logistics development. A noticeable move is the enactment of the Economic Cooperation Framework Agreement (ECFA), of fi cially coming into effect in 2010, which has greatly promoted the rapid development of trade and logistics across the Straits.
7.2 Development of China’s Logistics Market
Along with the recovery of domestic and international macro economy, China’s logistics market also rapidly rebounded in 2010; the total social logistics expenses, port throughput and container throughput, etc. all saw signi fi cant growth over 2009, and they even surpassed the development levels of 2007–2008 peak years prior to the global fi nancial crisis.
In term of logistics demand in 2010, since the international logistics market rebounded swiftly from the decline, the logistics volume of bulk energy and raw material remained high; the markedly accelerated demand in logistics market in the Central and Western China drove the development of logistics service in these regions; auto, online shopping, cold chain for food and other markets all showed high rates of growth and emergency logistics also began to take shape.
In term of logistics supply in 2010, the overall concentration of the logistics industry was still low; foreign enterprises continued to fortify their network con-struction, actively engaged in emerging logistics market segments, expanded the local customers base, and competed with the local enterprises. Domestic logistics enterprises were striving to improve their market competitiveness by direct fi nancing and improving their service network.
7.3 Development Trend of China’s Logistics Infrastructure
In 2010, China’s investment in logistics infrastructure, particularly in transport infrastructure, reached its highest level over the years. With strong support from the Government’s massive investment, China’s railway, highway, waterway, airport and other transport infrastructures have seen signi fi cant improvement in both scale and technology, and the network structure was further optimized to sustain the growing logistics market. In the meantime, China also made rapid progress in professional
1937 Conclusions and Outlook
storage facilities, bonded logistics centers, professional logistics centers and public logistics information platforms. As a result, China’s logistics infrastructure has seen marked improvements both in scale and in quality.
7.4 Development of China’s Regional Logistics
In 2010, China strategically promoted the formulation of development plans for the major economic regions and established the development pattern comprising the Eastern, Northeastern, Central and Western regions, each with its own focus. Several of these areas have been given special attention recently due to their unique attri-butes and strategic importance; their logistics development is vital to China’s over-all economic growth. Speci fi cally, the Chengdu – Chongqing Economic Zone has evolved into an important economic powerhouse in the Western region; Xinjiang is playing an increasingly important role in China’s international trade along Asian boarder by virtue of its unique advantages in geographical location and natural resources; the Zhongyuan City Cluster has become the signi fi cant grain production base, energy and raw material base and modern equipment manufacturing and high-tech industry base; the Northeastern region has long been China’s heavy industry base and grain production base and has recently witnessed a rapid growth in logistics development. Therefore, this book has chosen these regions as examples to highlight China’s regional logistics development.
From 2006 to 2010, China continued to pursue its “Grand Western Development” strategy and industries in the Eastern region continued to migrate to the Western region in an accelerated pace. Relying on its solid industrial base, dominant loca-tional advantage and complete and integrated transportation network, the Chengdu – Chongqing Economic Zone has achieved rapid progress in logistics development. The upgrade in industry and shift of industry from East to West expanded the demand in logistics market for the Zone and facilitated its market development. By virtue of its favorable location, the infrastructures in railway, highway, waterway and airport were further improved, and a number of logistics parks and centers were established. In addition, the IT application in logistics also saw improvement. All these advancements helped the Chengdu-Chongqing Economic Zone to become an economic and logistics powerhouse.
Unique advantages in location and natural resources as well as policy support from the Central Government provide an important foundation for Xinjiang to accelerate its economic development and rationalize its industrial structure. In term of logistics market, Xinjiang is the international passage for China to import energy and scarce mineral resources and is gradually developing into the processing base, transit distribution center and logistics passage for China’s opening-up to the West, thus playing a strategic position in promoting the economic cooperation between China and the Central Asian countries. Meanwhile, as the New Eurasia Continental Bridge traverses Xinjiang, port logistics has become an important feature in Xinjiang’s logistics development. With improved logistics facilities and policy
194 L. Wang
environment, port logistics in Xinjiang develops quickly as well. Urumqi, Kashgar, Ala Mountain pass, Khorgos and other nodes are playing an increasingly important role in regional trade between China and Middle Asia, West Asia, Russia and Mongolia.
The rapid development of regional economy, the adjustment and improvement of industrial structure and in particular, the fast expansion of consumer market together provide favorable economic base and huge market space for the logistics develop-ment of the Zhongyuan city cluster. Recently, the logistics market of the Zhongyuan city cluster has expanded rapidly; its logistics industry and major logistics enter-prises have also grown substantially. In particular, its kernel city, Zhengzhou, as the comprehensive transport hub which has the potential to develop into an inland inter-national logistics center in Zhongyuan city cluster is much highlighted.
Under the more slack money policy and the expansion fi scal policy of the State, the Northeastern region has achieved signi fi cant growth in regional economic aggregate, total sales of social consumer goods and foreign trade. In the region, the logistics market is continually expanded, the logistics and transport infrastructures (railway infrastructure in particular) are well developed and the construction of logistics parks continues to make progress. Promoted by the Government and regional economic integration, the progress of regional logistics integration also continues to advance. In addition, since the Northeastern region serves as China’s heavy industry base and grain base, its manufacturing logistics and grain logistics attain rapid development as well.
7.5 Development of China’s Industrial Logistics
This section mainly analyzed the market segments of industry with large logis-tics demand and high degree of logistics operational specialization. Since fresh agricultural products are perishable, their logistics characteristics are quite dif-ferent from goods transported at room temperature, thus professional logistics operations are needed to handle them. China is the largest coal producer and consumer in the world, so coal logistics plays an important part in bulk commod-ity logistics market. Express service is also a much specialized market segment for logistics. In 2011, China’s express market ranked No.3 in the world, after the U.S. and Japan. Therefore, Chap. 5 of the book is devoted to the development trend of China’s logistics regarding fresh agricultural products, coal and express service.
With the constant increase in the distribution scale of China’s agricultural products logistics, the market trading volume and turnover also grew year by year. The logistics infrastructure for agricultural products continues to be improved, the network of green channels has been constructed and the operational level is being promoted gradually. Self-managed logistics mode and third party logistics mode are in simultaneous development. Third party logistics enterprises, especially cold chain logistics enterprises, have evolved into the principal party. However, China’s
1957 Conclusions and Outlook
fresh agricultural products logistics is also challenged by such defects as low logistics ef fi ciency, high circulation loss and backward facilities and equipment, especially in cold chain logistics development.
China’s coal industry features the transport pattern of “transporting coal from west to east and from north to south.” Channels for coal logistics have gradually taken shape in China; construction of coal logistics park, coal railway and other infrastructures is in an accelerated stage; integration of logistics resources of coal enterprises has been further enhanced. However, insuf fi cient transport capacity of coal railway is still the “bottleneck” which restricts the outbound transport of coal. In addition, the market level of coal logistics is low; many large-scale coal enterprises adopt the traditional integrated self-operating mode, which follows the “production + transport + sales” pattern; the resource integration of coal logistics is also insuf fi cient.
The continued improvement of China’s express service management system and the formulation of a number of new express service standards, related laws, regulations and plans have further upgraded the express service in China. At present, the service capability of China’s express enterprise has been greatly improved. The business entity in China’s express market begins to show a diversi fi cation trend, and a market competition pattern featuring co-existence of state-owned, private and foreign–funded express enterprises has taken shape. As market competition intensi fi es, merger and acquisition begin to occur among different express enter-prises. However, there are still some problems with China’s express logistics. For example, policy treatment for enterprises with different ownerships varies, the market’s response capacity is low, most of domestic enterprises have relatively backward internal management level, etc.
7.6 Hot Issues in China’s Logistics Development
Chapter 6 of the book describes some major issues or hot issues regarding logistics in China’s economic and social fi led. Since China’s accession to the WTO 10 year ago, international trade has contributed greatly to the rapid development of China’s logistics. As a new mode of transportation, multi–modal transport is an important transport form used by China in international trade. In the meantime, bonded logis-tics also develops itself into an important form in China’s international trade logis-tics. Additionally, under the framework featuring energy conservation, low carbon emission and environment–friendliness, awareness and concern for environmental logistics is increasing throughout the society. Therefore, this chapter mainly dis-cusses the development trend of multimodal transport, bonded logistics and envi-ronmental logistics in China.
Recently, the container transport service of China has been subject to continued expansion, which provides a huge potential market for developing multimodal transport. The constant expansion of multimodal transport channels and lines, the opening of a number of inland ports and the improvement of operational ef fi ciency
196 L. Wang
offer more choices for multimodal transport. Transport service network of various transport modes is being actively promoted; the improvement of facilities and equipment provides favorable physical conditions for multimodal transport; the cooperation among different departments and local governments and ports also provides strong policy support for multimodal transport. However, China’s multi-modal transport is still confronted with problems as follows: low proportion of sea and rail transport, feeble management system, bottleneck in railway capacity and hub linking, low market credit level, backward development of operational sub-jects, etc. In the future, the market scale and network coverage of multimodal transport will be further expanded, especially sea-rail transport and river-sea trans-port which will become the focus of future development. The construction of mul-timodal transport will be further speeded up. And the sea, port and inland transport enterprises will be linked and integrated to provide operational service platform for multimodal transport.
The needs for bonded logistics are growing in China, leading to the rapid increase in the number of bonded logistics supervision zones, which have expanded from the East to the West in terms of spatial distribution and have been equipped with more integrated functions. The service capability of bonded logis-tics enterprises has continually been improved. Yet the spatial distribution and the functional orientation of the special supervision zones, the ef fi ciency of the customs, and the supporting service system for bonded logistics are still in need of further improvement. To facilitate the integration of these special supervision zones of China’s Customs, the Government will need to rationally plan and effectively integrate the policies, modes and resources among different types of supervision zones, and actively expand the logistics functions of such zones.
Green logistics not only conforms to the development trend of green economy in the world, but also is China’s set objective to transform its mode of economic development and upgrade its logistics industry. Although China’s green logistics has made certain progress in terms of policy guidance, green equipment and facilities, optimization of logistics operation organization, development of recycling and remanufacturing industry and other aspects, it is still at the preliminary stage of development, and therefore requires further adjustment and improvement in its policy system, operations organization, certi fi cation and monitoring, technology and equipment, etc.
7.7 Outlook of China’s Logistics Development
The coming years will be critical for China in view of the stagnated global economy. The outlook for China’s economy in general and logistics industry in particular, is of a modest optimism. It is therefore advisable for China to focus its development effort on building a moderately prosperous economy, to deepen its reform and opening- undertakings, and to accelerate the transformation of its mode of economic development. The economic development will turn from
1977 Conclusions and Outlook
rapid growth induced by policy stimulation of the past years to steady growth via fundamental structural adjustment. As the national economy maintains a steady pace of growth, the logistics gross value will likely hold a steady and mild upward growth trend. However, affected by the weakened global economy, China’s international logistics will probably remain in a fairly stable state. China will continue to build long-term mechanisms to expand its domestic demand so that the domestic logistics demand will keep growing. Promoted by the strategic adjustment of the national economic structure, China’s logistics industry will respond by accelerating its transformation, and the logistics enter-prises will speed up their internationalization endeavors.
199
Index
A Agricultural products logistics
acceleration, infrastructure construction , 115–116
circulation modes direct distribution , 110–111 processing & sales , 111 self-marketing , 109 wholesale market , 109–110
close cooperation, linkages , 119 cold chain level , 119–120 consumption characteristics
continual rise, price , 107 demand structure , 108 safety requirements , 108
economic development , 106 enhancement, added value ,
118–119 enlargement, collection and distribution ,
112–114 establishment, green channel network ,
114–115 facilities and equipment , 117–118 farmers and supermarkets linkage food safety incidents logistics ef fi ciency , 116–117 management policies , 118 self-operated and outsourcing
development , 116 Airport
and airline network , 40 cargo and mail throughput , 40, 41 transport fl eet , 41
Automobile market , 24–25
B Bonded logistics
characteristics , 162–164 customs ef fi ciency , 173 demand , 165, 169 enterprises , 172 foreign trade , 164 integration trend , 165–168 regional distribution , 173 spatial expansion , 169–171 special customs supervision areas
comprehensive free trade zone export processing zone functions , 175–176 rational planning , 174 policy, mode and resources , 175
supervision system , 165, 169, 170, 196 supporting service system , 174
C CAAC. See Civil Aviation Administration
of China (CAAC) CAE. See China Air Express (CAE) Carbon capture and storage (CCS) , 178, 179 CCS. See Carbon capture
and storage (CCS) CEA. See China Express
Association (CEA) Chengdu-Chongqing Economic Zone
characteristics, logistics development comprehensive transport system , 55–59 construction, park and center , 59–60 development, enterprise , 61
B.-l. Liu et al. (eds.), Contemporary Logistics in China: Transformation and Revitalization, Current Chinese Economic Report Series, DOI 10.1007/978-3-642-33567-9, © Springer-Verlag Berlin Heidelberg 2013
200
Chengdu-Chongqing Economic Zone ( cont .) expansion, market , 54–55 import and export trade , 52–54 preferential policies, development ,
61–62 upgrade, informationization
level , 60 construction and development , 49 development, industry’s logistics
automobile and motorcycle , 62–63 bonded , 64–65 electronics , 63–64
economic development conditions value, region , 50–51 industrial development , 51–52 regional plan , 49, 50 retailing, consumer goods , 52
China Air Express (CAE) , 133, 135, 142 China Express Association (CEA) , 136 China Internet Network Information Center
(CNNIC) , 142 China’s international logistics , 197 China’s logistics issues
bonded ( see Bonded logistics) Green logistics ( see Green logistics) multimodal transport , 148–161
Civil Aviation Administration of China (CAAC) , 142
CNNIC. See China Internet Network Information Center (CNNIC)
Coal logistics, China continuous westward shift , 126 description , 120–121 development trend
application, processing technology , 130–131
attention and development, green logistics , 131–132
emergence, strategic alliances , 131 informatization construction , 130
insuf fi cient resource integration , 129 low marketization level , 129 operating modes
large-scale coal enterprises , 121–122 small and medium-sized enterprises ,
122–123 railway transport capacity , 128–129 resource integration, enterprises , 128 speeding up, park building , 126–127 transportation
inland rivers , 125 railway , 123–125 ship , 125
transport, railway construction , 125
D Domestic logistics enterprises
direct fi nancing , 30 economic recovery , 29 network placement , 30–31
E ECFA. See Economic Cooperation Framework
Agreement (ECFA) Economic Cooperation Framework Agreement
(ECFA) , 14–15 Economic environment
cost pressure, logistics enterprises , 8–9 description , 191 domestic logistics demand , 6 international trade
economic growth , 3 import and export , 4–5
logistics infrastructure construction , 6–8 stable and rapid development , 2–3 transformation , 2
EDI. See Electronic data interchange (EDI) Electronic data interchange (EDI) , 60, 131 EMS. See Express Mail Service (EMS) Environmental logistics , 196 EPR. See Extended producer
responsibility (EPR) Express logistics, China
acceleration, process , 144–145 alliance and merge & acquisition , 144 continuously expanding scale , 143–144 de fi nition and process , 133 development
competition pattern , 138–139 course , 133 regional characteristics , 140–141 scale, market , 137–138 service capability, enterprises , 139–140
inconsistent policy treatment , 141–142 industry segments , 132 internal management level , 143 management system and policy
environment administrative mechanism , 134–136 development plans , 137 legal systems , 136–137 standardization , 136
policy and technological environment , 132 service types , 134 supervision and regulatory system , 144 weak market responsiveness , 142–143
Express Mail Service (EMS) , 133, 135, 138 Extended producer responsibility (EPR) , 189
Index
201
F Foreign-funded logistics enterprises
acceleration, market placement , 29 domestic customers , 29 fashion retailers , 29 network coverage , 28
G Green logistics
authentication and monitoring system , 189 development status
energy saving and emission reduction , 185–186
infrastructure and equipment , 180, 183 organizational modes , 183–184 policies, regulations and management
method , 180–182 recycle and remanufacturing , 186
economic management system , 187 enterprises , 188 environmental protection consciousness,
enterprises , 187 global economic growth , 176–179 organizational mode , 189 policy system , 188 R&D , 189–190 standardization, authentication
and monitoring , 188 technical and equipment level needed ,
187–188 transformation, economic growth mode , 177 transition and upgrading , 177, 180
H Highway transportation
expressway , 36 road network status , 36 rural , 36 truck , 37
I Industrial logistics
coal current development status , 123–128 description , 120–121 development trend , 130–132 disadvantages , 128–129 operating modes , 121–123 production , 105
express logistics ( see Express logistics, China)
fresh agricultural products , 106–120 international trade and e-commerce , 106 market segments , 194–195
Infrastructure, China’s logistics airport ( see Airport) enterprise , 44–45 fi xed assets investment , 33, 34 highway , 36–37 public information platform , 43–44 railway ( see Railway transport) transport , 192–193 warehousing facility and logistics park
agricultural products and medicine , 43 bonded port , 42 and distribution center , 41–42
waterway investment scale , 37–38 port , 38, 39 ship , 38, 39
International logistics market , 22 International trade and e-commerce , 106
L Logistics development, China
Chengdu-Chongqing Economic Zone , 49–65
economic regions , 47 geographical locations, regions , 48 integrated transportation , 48 Northeast China , 90–104 Xinjiang , 65–78 Zhongyuan City Cluster , 78–89
M Management system and policy environment
administrative mechanism , 134–136 development plans , 137 legal systems , 136–137 standardization , 136
Market, China’s logistics automobile , 24–25 bulk energy and raw materials , 23 cargo
airports , 21, 22 ports, foreign trade and container , 20–21 transport capacity , 20
concentration and pro fi tability, industry , 27–28
demand , 21–22 domestic enterprises , 29–31 economic environment , 17 expenses , 18, 19
Index
202
Market, China’s logistics ( cont. ) food consumption , 26 foreign-funded enterprises , 28–29 global top ten container ports , 2010, 22 industry , 18, 19 macro economy, domestic and
international , 192 midwestern regions , 23–24 natural calamities , 26–27 online shopping market , 25–26 value and growth rate , 18
Motorcycle and automobile logistics industrial enterprises , 62 production and sales , 63
Multimodal transport channels , 151, 153 container , 151, 152 development trend
acceleration, hub construction , 160 market scale and network
coverage , 159 sea-rail and river-sea , 159–160 shipping and port enterprises , 160–161
domestic , 149 door-to-door delivery , 148 facilities and equipment , 154 hardware facilities , 158 industry, categories , 149, 150 international trade , 195 local governments and ports , 155 logistics company , 149 low market credit , 158–159 management system , 156, 158 NVOCC , 149 quantity and ef fi ciency, dry ports , 153 and railways ministry , 154–155 sea-rail , 156, 157 service network , 153–154 service provider , 159
N Non-vessel operating common carrier
(NVOCC) , 149, 150 Northeast China
characteristics, logistics development agricultural output value and growth
rate , 94–95 construction,logistics parks , 98 development, enterprise , 98 expanding scale, logistics market , 95–97 regional logistics integration
construction , 99 transport infrastructures , 97
economic aggregate, region , 91 import and export , 92, 93 industrial structure
agricultural output value and growth rate , 94–95
development , 2003–2010, 92–95 output value and growth rate , 94–95 production of grain crops
in the northeast in 2010 , 92–95
logistics, industries competitive strength , 102 development, grain logistics , 103–104 dual-industry interactive , 99–100 graded suppliers administration
and vendor managed inventory model , 102
innovative service mode, manufacturers demand , 101
manufacturing interactive development , 100–101
“transfer sales model,” Itochu Corporation , 101–102
map, three provinces , 90 retail sales, social consumption
goods , 92 statistical data , 90
NVOCC. See Non-vessel operating common carrier (NVOCC)
O Online shopping market , 25–26
P Policy environment
Adjustment and Revitalization Plan for Logistics Industry , 9
description , 192 ECFA , 14–15 enterprises , 13–14 industrial transfer , 12–13 ministries and commissions , 11 plans and local regulations , 10 rural area and agricultural products
circulation system , 11–12
R Rail-sea combined transport
multimodal transport , 156, 159–160 Shanghai port , 156 Tianjin port , 155
Index
203
Railway transport and freight car , 35–36 inter-regional cargo transportation ,
34, 35 transport capacity and railroad network ,
34, 35 R&D. See Research and development (R&D) Recycle logistics , 186, 187 Regional logistics , 193–194 Research and development (R&D) , 189–190 River-Sea Multimodal Transport
multimodal transport , 159–160 Shanghai port , 156
S Special customs supervision areas
bonded logistics enterprises , 172 development projects , 169, 171 functions , 175–176 policy, mode and resources , 175 rational planning , 174
T Transportation, coal
inland rivers , 125 railway , 123–125 ship , 125
W Waterway transport
cargo , 20, 21 investment scale , 37–38 port , 38, 39 ship , 38, 39
X Xinjiang
administrative region , 65
demand, logistics market freight volume , 70, 71 import and export freight volume and
growth rate , 71, 72 transportation , 70
development environment , 74–75 economic indexes
growth rate , 66 import and export trade , 68 industrial structure and characteristics ,
68–69 retail sales, social consumer goods ,
66, 67 global fi nancial crisis , 69 port
Alashankou and Horgos , 75–77 construction , 75 logistics development , 76–78
supply, logistics market park construction , 73 integrated logistics parks , 74 railway framework , 71, 72
Z Zhongyuan City Cluster
characteristics, logistics development advantages, infrastructures , 84 expansion, market , 83 growth, enterprises , 86 tend, concentration , 84–85
economic development geographical layout , 79 import and export trade , 80–81 regional GDP , 79–80 structure, industries , 81–83
logistics development, sectors cold chain , 87 food processing , 86 grain , 88–89 medicine , 87–88 steel , 88
Index