A Whole Lotta Logistics Going On

Thursday, April 26, 2007 9:46
Posted in category China Logistics, Uncategorized
Comments Off on A Whole Lotta Logistics Going On

Lots of logistics going on today in the news… just not sure where to begin!

First up , is a partnership between teh Bay Area Council and China’s Yangtze Council (lead by Shui On’s Vincent Lo(The KING of Guanxi)). Coming on the heals of a numebr of YAngtze relaed intiatives,it should be no surprise that Vincent Lo was part of this as he himself is a big believer in China and has invested already in a number of projects along the Yangtze river (Wuhan, Chongqing, and others).

Vincent is stepping away from the pure real estate model here by working with the council to raise 200 million USD that will be invested in technology companies along the river (there is probably a line forming now) as “The Yangtze and the Bay Area share a lot in common as the innovative capitals of their respective countries,” Lo said in a statement Wednesday. “There is also a great history of friendship and mutual support.” To read more, go here

Next is a story in the Wall Street Journal entitled China Railways Hurt Coal that highlights the fact that China’s rail network is so overburdened that it may actually have to import coal (obviously at a much higher cost) to meet the demand, and that the recent investments in rail are nowhere near enough. David Winning does a good job of collecting some very relevant statistics to support the article:

“China will reach its 2020 coal-production target by 2010,” when output will reach 2.7 billion tons, said Dong Yan, director general of the Comprehensive Transport Research Institute, a think tank of the government’s National Development and Reform Commission.

In the first quarter, coal imports rose 61% from a year earlier to 14.3 million tons, while exports fell 32% to 11.4 million tons, data from the General Administration of Customs showed.

As I have pointed out on a few occasions, the rail network is in a very bad state from a transportation perspective. It is by far the largest system in the world for transporting people and goods, and the Chinese government is doing all it can to add capacity as quickly as possible. Speed trains are being introduced, double decker container cars are being build, and a large amount of new track will be laid over the next 10-15 years…. all in hopes of meeting deman then. Until then, mission critical goods shoudl avoid the rail at ALL COSTS, and when moving gods via the rail it is CRITICAL to work with large companies who have the connections you will need to get your goods on and off the track in one piece.

ALthough I am not sure to which cities he sees along the Yangtze as being similiar to those found in the BAy ARea (Does Wuhan = Oakland or San Jose?), I am also a big believer in the YAngtze and believe that over the next 2-3 years we will begin seeing development in some key areas due to the importance of the Yangtze in balancing out the country.

Finally, a couple of deals worth mentioning that have come across the wires over the last couple days: MAersk will purchase 20 container cranes from Shanghai Zhenhua Port Machinery for 200MUSD; CEVA Logistics signed Eaton Corp. to become the Pacific Asia region logsitics provider Read More; COSCOhas just ordered 66 ships from 4 different Chinese ship builders… someone is planning on expanding!

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