Logistically Speaking, A Few Important Announcements In China Over the Last 2 Weeks

Thursday, May 29, 2008 9:43
Posted in category China Logistics

Typically, I not one to simply post up the news headlines, but there has been a lot of activity in the logistics industry that I think should be highlighted:

1)UPS to move Asian logistics hub to China

When the Philippine asks that you do whatever you can to keep something behind, you know that moving your operations will have a significant not only on the area you are leaving, but on the area you a moving to, and for UPS this was a decision not taken lightly

2) ProLogis has two China deals in works

ProLogis is a firm I have been following since their earliest days in china. They are a premium supplier of warehouse space and 3pl services in China, and it was only a matter of time before the market was willing to accept the premium they charge. Where I like ProLogis over some other similar groups is that they are going for the eagle by taking up space in places that are not “proven” in the market. You can find my more detailed profile here

3) China warns power plants running out of coal

Getting back into the bigger picture, the coal story is one that is not going to go away, and I expect to continue to worsen. 1) We have had a fairly dry spring, so water is down (i.e. hydro power off), 2) the Guangdong province and others have still not fully built up their safety stocks, and 3) all trains are going to be diverted to assist in the Sichuan relief effort… and it is going to take years before they have the rail capacity to handle both an energy crisis in the south, and a relief effort in the west.

so, these were three of the more important stories that I saw recently that I thought you should be aware of. Few really pay attention to the story behind the movement of goods, labor, and raw materials in more mature markets like the EU or US unless there is a strike, but in China one should pay close attention as it is the economic canary in the coal mine so to speak.

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