While on a trip to Sinapore in 2001 with 30 Thunderbird students, we were given a behindthe scenes tour of the singapore port and its plans to develop.  the goal was simple.. surpase HK once and for all.

Well, apparently it didn’t work out as planned, and as reported in the China and Shanghai Daily papers, Shanghai has now passed HK to become the world’s second largest port with an amazing 26+ million TEUs.

If there were any doubt about how important the Yangtze delta has become, this should bring about a bit of reality.  26 million TEUS is nearly the throughput of the entire country of Vietnam, and that is factoring in the bulk freight that is also moving through the port.

and if that weren’t enough, Tianjin just logged a 20% increase on last year with 7 million TEUs … and is looking to ramp that us significantly over the next few years.

Now wonder a PE fund specifically for improving the shipping industry is being set up in Tianjin…. Shipping expansion floated

So, congratulations to the folsk at Shanghai Port, and JIAYOU to the folks at Tianjin port.

A few weeks back, Chris Devonshire said in the comments section of the post China’s Ports to Play Fair.. With Each Other that the real story was Lianyungang Port, not Zhangjiagang Port.

Well… as luck would have it, here is a youtube video shot on location at the port, where staff of Linese Chinese School have shot one of their lessons.

Cheesy text aside, I have to say that this video was useful as I learned a few new words and characters related to ports… and I while a bit light, I am sure those of you looking to know the basics on the port will find it useful

For other port coverage, go to our write up/ youtube on the Dalian port. It is even more impressive!

With retail chains forming around China (Lianhua, Walmart, etc), there has been a lot of news recently on China’s sad state of affairs when it comes to cold storage. A lack of trucks, containers, warehouses, and just a generally difficult process for approvals for those who are wiling to invest.

So, when Eimkip opened their brand new warehouse in Qingdao (through put of 500,000TEUs), it goes without saying that people were excited… Baldur Gudnason (CEO of Eimskip) had this to say in front of the 350 other Icelanders

This is a very exciting project, which supports the current operations of Eimskip China. We have established 4 offices in the country in recent years and currently around 100 people work for Eimskip in China. The cold store project started with the visit of Mr. Olafur Ragnar Grimsson to Qingdao in 2005 and is now concluding successfully.

Located between Shanghai and Beijing, Qingdao is know best perhaps for its beer Tsing Tao (same pronunciation…just a different spelling), however Qingdao has a very long history as one of China’s original trading ports. Heavily influenced by the west, Qingdao has always had a strong port (see map), has seen a lot of western business and with this new warehouse, they are sure to garner more interest from those in the food industry (not just fish processing as mentioned in this Shanghai Daily article).

In addition to this opening, and the planned expansion, Eimskip’s website also announced that they had taken a stake in the Linyi container depot (110,000m2) . According to their announcement:

Eimskip has a call option to buy additional 20% share in Luyi Depot. Former owners will hold 40% share and will further develop the operation of Luyi Depot with Eimskip.

This investment obviously is a positive sign for things to come, but I cannot help but wonder where they will get the trucks needed to support the facility.

For anyone interested in learning more about cold chain in China, I would suggest you download this Accenture report or this AT Kearney Report. Both give a good overview of the industry, the need, and the hurdles. The September edition of CHaINA also has a great article on cold chain as well.

For more on Qingdao, see Dan Harris’s comments on a trip he took there. I personally have yet to make it there, but from everything I have heard, it is a place I need to go.

Following up on our post Accounting for Transportation Costs , I was forwarded a recent report by BCG entitled Surviving the China Rip Tide(PDF)

Broken into several chapters, this report highlights a number of critical issues for companies to consider when planning out their China supply chain. At foremost concern is the effect that increased delays at U.S. and E.U. ports are having on supply chains.

Running @ 90% ~95% capacity already, many U.S. and E.U. these ports are really sensitive to the infrequent and seasonal spikes (Mid July is going to be a mess.. see our post Rollin.. Rollin.. Rollin.. Get those Containers Floatin! ), and in BCG’s opinion, retailers need to start planning for a situation that will only get worse.

In their words:

We believe strongly that a firm focus on reducing time and variability in the China-anchored supply chains serving North America and Europe can help companies dramatically reduce their costs, improve their margins, and build competitive advantage

Totally agree. Many companies fail to realize that with the proper planning, a lot of money can be saved in the supply chain.

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following our first post entitled “If you can’t got over it”, we continued to do a little deeper into some of the problems that shippers face on the Yangtze….

With the Yangtze being know for the amount of silt it moves downstream, it doesn’t take an expert to understand how this might affect river trade, and indeed we have found that the Yangtze just isn’t deep enough in some areas.

Particularly bothersome in the middle reaches, the Chinese government has declared an all out assault on the river bed.. .and with good reason: If you want to balance out China’s growth, China will need to increase the amount of container traffic on the Yangtze, and to do that China needs to get the biggest boats possible up the river.

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One of the most amazing parts of being in China, is seeing how fast things can change. It comes in waves, and before you know it an industry that once seemed dormant and non-existent in China (or at the very least behind the times) punches through the wall and gives viewers a peak into the future.

My first experience in this was while working with a large branded construction equipment manufacturer as part of a supplier/ competitive assessment project. Our team of 6 spent a full week at the 2005 Bauma Fair interviewing various OEM, systems, and component manufacturers to understand what the current trends were in their space, and what the next 5 years would look like.

Day 3 into our 75 interview extravaganza, and it became clear that in only a few years the industry would change.. and dramatically. While only exporting a small number of wheel loaders and other pieces of equipment, there were several manufacturers who were in the lead.. and they had big plans. Overseas distribution agreements, service provider training, plans to purchase manufacturing sites overseas, etc… one of them had a 150,000USD consulting report in hand that laid out the GLOBAL landscape.

I mention this as it is a theme I have seen over and over again, and in studying the various portions of shipping we can once again see that things are going to change very soon.

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Finally! I have been able to put a childhood nursery rhyme into play as for the past several weeks we have been working on a Yangtze project, and through our interviews and research we came across what is perhaps going to be one of the biggest issues (man made) surrounding the containerization of the Yangtze:Its bridges.

That’s right, the bridges on the Yangtze, and in particular it is the bridge in Nanjing that appears to be one that is going to be particularly difficult to deal with

With Nanjing considered to be one of the key cities along the Yangtze, city officials have apparently (Of course this is third hand of third hand rumor) been having a difficult time deciding what to do with its bridge as it holds historic value. Finished in 1968, it was the longest highway & railway bridge at that time and became the symbol of Nanjing city, and of Mao’s era.

At only 24 meters high, it goes without saying that the current Panamax carriers will find it difficult to navigate past Nanjing, and through our interviews we have found that the limit is a 3000 ton ship (One operator said 5000 ton ships could pass under “ideal” conditions).

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