FTZ of­fers ‘ huge po­ten­tial’ to pare cargo ship­ping times

Shang­hai has gained ini­tial recog­ni­tion from in­dus­try play­ers across the world, re­ports Wei Tian

China Daily (Hong Kong) - - BUSINESS -

In many ar­eas, the steps taken in car­ry­ing out re­forms re­main cau­tious and for­eign in­vestors are still wait­ing for de­tailed poli­cies, but the China (Shang­hai) Pilot Free Trade Zone is steer­ing a steady ad­vance in at least one sec­tor.

As the name sug­gests, trade and lo­gis­tics are the pri­or­ity. It is also where some key in­dus­trial play­ers are eye­ing big changes.

Among them is the world’s largest lo­gis­tics com­pany DHL, which was se­lected as the first in the sec­tor to test the waters of the in­ter­na­tional trans­ship­ment busi­ness in the pilot area.

The com­pany, head­quar­tered in Ger­many, has launched its first in­ter­na­tional tran­sit air route that of­fers trans­fers in Shang­hai. It is also the first of its kind to op­er­ate on the Chi­nese main­land.

The new route could save eight hours out of the three­day jour­ney from the Ger­man city of Leipzig to Tokyo com­pared with the old route via Hong Kong, ac­cord­ing to Qian Xiaorong, a project man­ager at the DHL North Asia lo­gis­tic cen­ter at the Pudong In­ter­na­tional Air­port, which han­dles the op­er­a­tion of the new route.

In the cen­ter, cargo from in­ter­na­tional trans­ship­ments is un­packed, sorted and repack­aged ac­cord­ing to des­ti­na­tions, with­out hav­ing to re­ceive cus­toms checks or pay du­ties.

Dur­ing the day, the cen­ter seems some­what empty with only a hand­ful of work­ers, but Qian said at night there are hun­dreds of em­ploy­ees work­ing on­site sort­ing the parcels. The process can be fin­ished within four hours.

As a key in­dex to mea­sure the in­ter­na­tion­al­iza­tion level of an air­port, in­ter­na­tional trans­ship­ments usu­ally ac­count for more than 50 per­cent of the to­tal cargo vol­ume at hub air­ports.

As the largest cargo air­port in China and the third-largest world­wide, Pudong air­port han­dles 3 mil­lion tons of cargo a year, which is equal to the weight of 15 Jin­mao Tower, an 88-story land­mark sky­scraper in the Lu­ji­azui area of the Pudong New Area of Shang­hai.

How­ever, be­fore in­ter­na­tional trans­ship­ment was in­tro­duced in the free trade zone, such cargo could only go to Ja­pan or Sin­ga­pore.

“Shang­hai has the po­ten­tial to be­come an in­ter­na­tional hub for cargo trans­port be­cause it is bet­ter po­si­tioned than Hong Kong and Sin­ga­pore, in terms of be­ing a shorter dis­tance to Europe and the United States,” said Qian.

Such an ad­van­tage be­comes more ap­par­ent us­ing the po­lar route that flies over the Arc­tic, which could save up to four hours of flight time com­pared with tra­di­tional routes, she said.

With only one route, the cen­ter seems to be un­der­uti­lized with its 88,000 sq m area and a ca­pac­ity to han­dle 40,000 parcels and en­velopes per hour.

“We’ll def­i­nitely launch more in­ter­na­tional trans­ship­ment air routes next year. One route will not gen­er­ate enough of a profit mar­gin,” Qian said, adding that Hong Kong air­port is al­ready some­what crowded with dozens of such routes in op­er­a­tion.

In the first 10 months of this year, the vol­ume of trans­ship­ment cargo at Pudong air­port has surged by 125 per­cent com­pared with the same pe­riod last year.

Cai Hao, pres­i­dent of the cargo ter­mi­nal at Pudong air­port, said that with the au­thor­i­ties fur­ther loos­en­ing up the poli­cies in the free trade zone, there would be an in­creas­ing de­mand for trans­ship­ment busi­ness. The air­port oper­a­tor is ready to up­grade the fa­cil­i­ties to meet the ex­pected de­mand.

As a part of the 28.78 sq km free trade zone, the 1.81 sq km west freight ter­mi­nal in Pudong air­port has enough land re­serves, so the air­port can fur­ther ex­pand air cargo ser­vices by uti­liz­ing ex­ist­ing re­sources, Cai said.

In the mean­time, a fourth run­way at the air­port will be put into op­er­a­tion in the first quar­ter next year. A new satel­lite ter­mi­nal, which it is hoped will be com­plete in 2018, will pro­vide an ad­di­tional 120 air­craft stands to the ex­ist­ing 70, ac­cord­ing to Liu Wu­jun, chief en­gi­neer of the Shang­hai

Air­port Author­ity, which is re­spon­si­ble for run­ning the two air­ports in Shang­hai.

The air cargo vol­ume at Pudong air­port will reach 5 to 7 mil­lion tons a year in 2015, Liu said.

The same op­ti­mism is also shared at Yang­shan Port, the sin­gle largest com­po­nent of the free trade zone in terms of area, which also benefits from the more sim­pli­fied cus­toms su­per­vi­sion within the pilot area.

Jiang Gong­sheng, gen­eral man­ager of Shang­hai Sheng­dong In­ter­na­tional Con­tainer Ter­mi­nal Co, a ma­jor oper­a­tor at the port, said with the es­tab­lish­ment of the free trade zone, sup­port­ive poli­cies for in­ter­na­tional trade would fur­ther in­crease the in­ter­na­tional trans­ship­ment vol­ume at Yang­shan Port.

“In­ter­na­tional trans­ship­ment is ex­pected to see a dra­matic in­crease in the years to come.”

As a deepwater port that mainly op­er­ates ocean routes, the pro­por­tion of trans­fer freight at Yang­shan Port as a per­cent­age of the to­tal vol­ume of all freight it han­dles is around 10 per­cent at the mo­ment, ac­cord­ing to Jiang.

“Ac­cord­ing to my knowl­edge, a num­ber of ship­ping com­pa­nies are con­sid­er­ing ad­just­ing their routes, in­clud­ing uti­liz­ing Yang­shan Port as a trans­ship­ment port or open­ing a new route to the port,” Jiang said.

This year, the an­nual through­put of the Yang­shan Port will reach 14.3 mil­lion TEUs (20-foot equiv­a­lent units, a mea­sure of con­tain­ers). Driven by the Yang­shan Port, Shang­hai Port’s con­tainer through­put is ex­pected to achieve 33.5 mil­lion TEUs, mak­ing the city the largest port in the world for the fourth con­sec­u­tive year.

The big­gest change brought by the free trade zone is a faster clear­ance process. For ex­am­ple, in the past it would take three rounds of doc­u­ment ex­changes to put fu­tures cop­per in stor­age. Now it takes just one.

“Such con­ve­nience and ef­fi­ciency will give Shang­hai an ob­vi­ous com­pet­i­tive ad­van­tage among large ports in North­east Asia,” said Jiang.

In ad­di­tion to the first batch of six com­pa­nies that re­ceived per­mis­sion to ship their goods into the free trade zone be­fore declar­ing them, Shang­hai cus­toms au­thor­i­ties last week an­nounced an­other 41 com­pa­nies that will get the same pol­icy pref­er­ence.

Jiang also said the fourth phase of the Yang­shan Port is now tak­ing shape. The three-kilo­me­ter ad­di­tional shore­line formed by ma­rine recla­ma­tion will ex­tend the port’s shore­line by 60 per­cent and help ful­fill Shang­hai’s am­bi­tion to be­come an in­ter­na­tional ship­ping hub by the end of this decade.

The con­tainer through­put at Shang­hai Port has been grow­ing at a slug­gish pace af­ter tak­ing a dive dur­ing the 2008 fi­nan­cial cri­sis. Since then it has av­er­aged 4 per­cent and will re­main low for quite a while in the fu­ture, re­search by Ac­cen­ture Plc con­sul­tants showed.

Zhu Jingfeng, direc­tor of freight, lo­gis­tics and port busi­ness with Ac­cen­ture Asia-Pa­cific, said the free trade zone would give Shang­hai a new growth op­por­tu­nity.

An area that has a con­ve­nient en­vi­ron­ment for trade and in­vest­ment, free cur­rency ex­change and ef­fi­cient reg­u­la­tory and le­gal norms will help to trans­form the test area into a “global territory” and vig­or­ously pro­mote the devel­op­ment of trans­ship­ment, he said. Contact the writer at weitian@ chi­nadaily.com.cn

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.