With the launch of its newest, fastest, and most expensive rail projects, you too can now pass through 20 cities, go over 600 bridges, and pass through 200 tunnels to on your way from Wuhan to Guangzhou to help to create better cooperation between Hubei, Hunan, and Guangdong. … and in about 1/3 of the time of the old snail rail method.

Just a quick celebratory note to announce that after a nearly 18 months of planning, designing, funding, and pushing.. the first Hands On Chengdu Community Flower project has been delivered to site and installed.

A lot of people to thank – Joyce, Vivian, John, Fang Hui, Conyee, Conlyn, Milan, Holger and many others whom not only personally donated to the cause, but threw their corporate resources behind the project (SPARCH and ACL design, ARUP engineered, Modeling by AMOD, Akzo Nobel Paints, Agility Logistics Logistical Support, and many more who made the initial fundraiser possible) as well as funds from George Watson’s College and The Blackford Trust in Scotland

It was in many ways the biggest project we have all worked on, and while at times we never thought that road to the village would get finished (3 month delay), it finally got there!

Thanks again to everyone that supported the project, and I look forward to sending more pictures as the next stages of this project are completed in the spring.

One of the things that fascinated me most about this city was its express delivery network, a service that I had used quite often to send letters/ packages across town, but paid little attention to as the people behind it seem quite decentralized and rarely cared to say anymore more than “sign here”. Then, a couple years while wondering why so many people seemed to be hanging out near the turnstiles of the metro station, I realized something.

That, in addition to handling millions of riders a day, the Shanghai metro system was in fact the backbone for moving Shanghai’s express packages around, and that the people hanging out by the turnstiles were in fact collecting and distributing packages and letters that were moving through the system. Over time, as my eyes adjusted and my time on the metro increased, I began to see that there were more actors in play.  You had runners who would move the packages from the originating office to the metro, to dedicated metro runner who did not more than run packages from the turnstiles to the the train carriages, and then the person who rode the metro all day long making the hand off.

It was a hive of activity that was low costs, and had the potential to move packages across the country!

Over the course of a week, as part of a program to shake things up and open their eyes to Shanghai, I sent out 2 of my local staff to check it out and report back to me just how this system worked. To work out not only the logistics behind the network (my original interest), but to see how the various actors made money (my initial assumption was that they were all independents) and how much was moving through the system.

Structure:
Contrary to my initial thoughts, the first day showed that the system was quite organized, and that there were between 3-5 companies that were largely in control of the majority of packages (there are some independents), and much like any other firm, these groups have develop a networks of branches to service their high traffic areas.

Line 2 is the money line. Hongqiao, Nanjing Road, Bund, Lujiazui, and Century Ave. commercial districts produce volume from from Century Avenue to Loushanguang/ Zhongshan park areas, and a decent chuck moves along line to the Xintiandi and Xujiahui areas as well. So, what you have are hubs that are spread out along those stations… Dongchang Road, People’s Square, Nanjing West, Zhongshan Park, and so on.

The Actors
To support this network requires a lot of people, and it is labor intensive

In the office: Boss (Laoban) and dispatchers man the desks, scan packages into the system, and schedule
Above ground: Runner (Ban Yun Gong), delivery men (Kuaidi Yuan), and sales people (yewu yuan)
Underground: Internal dispatchers (Ji Zhang Yuan)and metro riders (Di Tie Kuai Di Yuan)

The Flow:
As you may imagine, moving a few thousand packages a day over a network of 15 or so people requires a semi-manageable process, and contrary to my initial assumptions it is one that is actually tracked over the entire process through hand notes and a scan once it reaches the branch.

Once received, the package essentially enters the system and hits its first sort (near or long distance). If nearby, the package is taken to the branch for processing, and then carried by another runner to that area. Each runner will have a territory much like a standard delivery service provider. If the packaged is one that needs to be moved from the immediate area (cross town or across China), it enters a different system (as seen in the flow chart below).

The Costs:
Anyone who has used a kuai di service provider knows that everything is negotiable and that this is a cut throat market. While studying the traditional express market several years ago, we were locally very interested in seeing how these groups worked as well.. and it is all word of mouth and by mobile phone. So, the best salespeople give secretaries the best discount.

Outside of that though, it is a geography based system (no surprise) and the distance will determine the speed of delivery (no surprise there). for intercity deliveries, sending before lunch will essentially guarantee a same day delivery, but anything after lunch will “depend” on a few different factors (you can pay extra for priority service with some providers). For service outside of Shanghai, it appeared that any 2nd/ 3rd tier city could be serviced next day, but anything beyond that was anyone’s guess (I once sent a package to the furthest reaches of Jiangxi province that took 3 days).

So there you have it.  Shanghai’s kuaidi network.

A quick note from a friend at one of the large freight forwarders leads me to believe that we are in the initial phases of a restocking:

I don’t know what’s going on, everyone, needs everything yesterday and no capacity in the market…. total boom…

Anyone else seeing signs that Dongguan is about to have the lights turned back on?

Over the years, I have learned few lessons that I would say are more important than avoiding the People’s Square Metro interchange during rush hour.

It is perhaps one of the most congested metro stops I have ever had to pass through during rush hour, and unlike in other countries where a basic respect of personal space exists… in Shanghai.. it can at times be a test of patience for riders – particularly those on Line 1 where buckets of ice are needed to cool the trains off during summers.

Comfort aside though, a few recent exchanges also left me with a real sense that the numbers are reaching an unsafe level, and it is only a matter of time before someone is forced onto the tracks because there is simply no room left to stand when both trains pull in and unload before the pressure from waiting crowds can be alleviated. Crowds that at times can already be backed up the stairs trying to get down.

So, with a few hours of spare time I have put together the above as a representation of what I feel should become the blueprint for all rail hubs going forward. It is, in the simplest description simply adding a second platform that will allow passengers coming into the station to clear the cars so that those waiting can then get on, and in a manner that not only prevents the scrum like atmosphere that current is the rush hour “experience’, but it does so in a way that significantly reduces the congestion that occurs on the platform.

The trains would not require any additional equipment as the doors already exist, and while it would perhaps be a bit more inconvenient for passengers who missed a stop and needed to get back onto the opposite train, this new system would significantly reduce the number of people who were unable to get off the train because of the crowds (I have seen this nearly weekly).

Additionally, if you care to notice the handicap signs, this new configuration would allow those who need assistance to get onto the train before the main crowd does.  this would not only increasing the chances that they get a seat without having to kick someone out, but also go a long way to preventing other accidents that may arise from someone being knocked into or knocked over.

Next week, I have another suggestion that I think would also greatly improve the experience of People’s Square.  It is one where a quick gain could be made through  a little bit of staff training and a slight adjustment of some software.

Until then.  Enjoy the Shanghai metro… off peak

Following my presentation (click here to view) yesterday at the Supply Chain Council’s 2009 CHaINA conference, I received the below email inviting companies to participate in their annual green supply chain survey.

Working closely with the council for the last few years on CSR and sustainability, I encourage you to take the 10 minutes to fill out the survey.  Already about 100 firms have participated, and the findings have been quite interesting thus far, but the important of this survey will be to provide Max and his team with some valuable data that they can use going forward when developing their events and research.

So, take the time to click here and fill it out.

Just a quick heads up for those of you in the logistics/ supply chain field who will be in Shanghai this week.

On Wednesday the 4th, the Supply Chain Council’s yearly event CHaINA will be going on all day at the Zhongshan Park Renaissance Hotel, and I highly recommend taking the time to attend (agenda here) to see some of the presentations and keynotes speakers.

I myself will be leading the Green Panel with my own presentation: Greener is not Green, Brown isn’t an Option: The Business Case for Sustainability, and hope to see you there.

For more, go to the event website

Logistics
Cosco Pacific Sells Logistics Stake; Profit Falls
Is the freight market recovering?
AMB Opens New Logistics Facility in Dalian
Redhead launches new China service

Port
Rapid expansion of port cities
Tianjin Port Development posts losses of HK$15.9 mln in H1
Container ports boom in China
Cargo throughput ekes out small rise

Water
Steel carriers jam China’s canal after price drop
China Cosco May Cancel Ship Orders After Second Straight Loss
China COSCO buys rest of logistics unit for $293 mln
Maersk Adds New Trans-Pac Rate Hikes

Air
Air China’s Growth Strategy: One Dragon, Two Nests
Chinese airline goes bankrupt with huge debts
Major Chinese airlines to raise freight fuel price
China Eastern Airlines receives regulatory approval to merge with Shanghai Airlines

Road
Talks on truck venture to tap sector
BYD to start selling electric buses by year
King of the Road gets eight years’ jail

Rail
Shanghai residents protest train line construction
Expo Metro Line to open in April

Technology

Logistics
K+N secures Shanghai deal
Macquarie and Everbright Plan Joint China Funds
Tibet’s largest logistics center starts operation
Warehouse operators expand in China

Port
Yantian port opens first inland depot

Water
New air/sea links planned between Thailand and Guangxi, China
Output up 33.7% at domestic shipyards
Shipping firms given break from spills

Air
China Eastern to launch new service to Bangkok via Xishuangbanna
Chinese airports continue poor performance, Aeroports de Paris falls following traffic release
Air China Enhances Capacity in Hubei
Hainan Airlines to report first-half profit, eyes Dalian launch
Air China Deal a Learning Step for Mainland Aviation
China’s first private jet base to open in Shanghai
China Eastern builds up routes
China encouraging new local carriers to use Chinese aircraft
Shenzhen Airlines’s Taiwan Branch Opened
AirAsia X launching services to Chengdu

Road
Beijing’s Traffic Renewal
Sichuan Expressway’s net profit up 34.43% in H1
Road tunnel across Yangtze through in east China
DHL launches China–Vietnam cross-border trucking service
Talks on truck venture to tap sector

Rail
Train intervals to be shortened
China sees slight rise in railway freight in July
China Railway Construction Speeding Up, Boosting Inland Economic Growth

Technology
Hong Kong Center Aims to Put China at the Forefront of RFID Growth
China TransInfo gets $4.7 million contract

Like to thank Ian for sending this Youtube clip along of the new Guangzhou train station.  Perhaps one of the busiest in the world, this new station is HUGE.  Apologies for those of you behind the firewall, but for those of you who are able to view… enjoy.