CHINA REPORT: Leading logistics
in association with Cosco | Thursday, 02 August 2012
In the fourth part of his China investigation, Phil Hastings finds that international players are showing confidence in the Chinese market
Earlier this month, for example, DHL opened a new US$175 million North Asia hub at Shanghai Pudong International Airport and announced planned investment of $132 million in eight dedicated aircraft to service high demand routes between Shanghai and North Asia, Europe and the US, by 2014.
Two weeks earlier, FedEx Express reported a major expansion of its operations facility at the same Chinese airport with the opening of a new office and warehouse area totalling more than 17,000 square metres.
Meanwhile, CEVA Logistics has this month announced a strategic cooperation with Shanghai-based Shine-Link International Logistics Co (SLC) relating to potential future cooperation on customs clearance and bonded logistics services in China, just weeks after buying out its Chinese joint venture CEVA Ground.
Other major logistics groups to have recently strengthened their presence in China include Norbert Dentressangle which late last year acquired Chinese forwarding company APC Beijing International.
David Barron, UK-based Global Commercial Director for Norbert Dentressangle Overseas, says the initial motivation for that development was a desire to handle export traffic to Europe and other overseas markets served by ND. “However, there has been a considerable increase in European exports to China over the last few years and that is also becoming a more important part of our business,” he adds.
Many longer-established foreign logistics providers in China are specifically looking to strengthen their presence in western regions of the country as manufacturers increasingly respond to a national ‘Go West’ policy designed to spread major industrial activity beyond the traditional coastal locations.
One example is Menlo Worldwide Logistics, which already provides nationwide warehousing, transportation and distribution via locations in around 110 Chinese cities.
“We have seen a big trend for manufacturing to move inland to central and western locations, particularly around Chengdu and Chongqing,” confirms Thomas Pan, Managing Director, North Asia, for Menlo Worldwide Logistics.
“So far, we have warehousing in Chengdu along with a very small location in Chongqing and one of our focuses for this year is to secure modern warehousing in those two strategic locations so we have a platform to expand further.”
However, amidst the apparent continuing international logistics industry confidence in the future of the Chinese market, Thomas Cullen, senior analyst with Transport Intelligence, a UK-based research and analysis company specialising in the global transport, logistics and express sectors, sounds a note of caution.
“Many people in logistics appear to have just looked at the past Chinese market growth graph, got their ruler out and said it’s been growing at X percent for the past three, four years or whatever and therefore it is going to continue like that,” he says.
“Superficially, it might appear that China is simply going to grow and grow but it is dangerous to assume that. People should be a lot more hesitant and careful when it comes to assessing China’s future economic growth and therefore logistics market growth.”
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