The Air China board has authorized guaranteed funding for the purchase of eight Boeing 777-200F freighters for Air China Cargo Co. The guarantee will be provided jointly with Cathay Pacific Airways, its partner in Air China Cargo, in accordance with their respective 51% and 49% stakes in the business.

DHL Global Forwarding introduced a second multimodal overland service connecting Asia and
Europe. A train will depart every Friday from Chengdu to Europe, passing through western China and Kazakhstan to DHL’s intermodal hub in Malaszewicze, Poland. The new weekly service comes as an addition to DHL’s daily service, which departs from Shanghai and runs along the trans-Siberian North Corridor. It will reduce the overall Asia-Europe transport time by up to eight days, further cutting costs and CO2 emissions.

China’s express delivery market has grown five-fold in the past five years, according to the State Post Bureau. The number of units delivered in April surged by 64.1% compared to last year, with revenue reaching CNY10.9 billion, an increase of 41%. The first quarter of this year saw 1.71 billion units of post delivered, up 64.3% year-on-year. About 5.7 billion units were delivered through couriers in 2012, with a market value of CNY106 billion. Private companies claimed three-fourths of the market share and 61.9% in terms of sales. Around 800,000 couriers were employed.

Guangdong’s plan to spend billions of yuan to create a network of ports, railways and waterways will pose a competitive threat to Hong Kong, but it may benefit Hong Kong exporters. Guangdong ports are reaching the limits of their capacity. Guangzhou’s Nansha port can hardly handle more than 20% of Hong Kong’s cargo, so the province could use more port facilities. Over the next three years, the province will spend CNY55.4 billion on building port facilities, waterways and railways, according to the Shenzhen Ports Association’s website. About CNY28.7 billion of that will be spent on port projects, including the third phase of Nansha, container terminals at Yantian port in Shenzhen, container terminals in Gaolan port in Zhuhai and a coal terminal in Quanwan port in Huizhou. This will increase Guangdong’s annual container capacity by 10.5 million TEU to 50 million TEU and raise Guangdong’s annual cargo capacity to more than 1.3 billion tons. A further CNY8.2 billion will be invested in waterways in Guangdong in the next three years. The province will invest CNY18.5 billion in building railways over the next three years, linking various ports including Nansha, Maoming and Zhanjiang in southwest Guangdong, and Chaozhou and Shantou in northeast Guangdong. Creating rail links to ports would improve the hardware, efficiency and cost of Guangdong’s ports, said Anthony Wong, former President of the Hong Kong Logistics Association. “Guangdong’s ports will be more competitive, efficient and cost-effective. That will not be good for Hong Kong, which competes with them.” Guangdong ports were offering much lower fees than Shenzhen and Hong Kong to attract volume, Liu Boyong, Equity Analyst at investment bank Jefferies, said. He warned that the return on investment on some of these port facilities would probably be low. Guangzhou Port Group, the state-owned operator of Guangzhou’s ports, has been planning a listing since 2007, the South China Morning Post reports.

The dockers strike at Hongkong International Terminals (HIT) ended on May 6, but it cost the company a reported HKD5 million a day. The strike started on March 28, lasting for 40 days. The actual cost to the maritime and logistics industry was much higher as ships and cargo were diverted to other ports. The strike was the longest in Hong Kong’s history. Estimates from the Port Development Council show container volumes through the nine Kwai Tsing container ports fell 5.9% in March to 1.42 million TEU compared with a year earlier. Shipping lines and logistics firms have also been hit with extra costs as ships burn extra fuel while waiting to berth and vessels and cargo are diverted to other ports. Roberto Giannetta from the Hong Kong Liner Shipping Association said the strike’s adverse impact on shipping lines was “particularly an issue in the days and weeks immediately after the strike started” when arrangements for each Hong Kong shipment had to be sorted out individually. During the strike some freight was being delayed while ships waited to dock at the terminals, other cargo was being discharged at other Hong Kong facilities or at alternative ports and being barged or trucked to Hong Kong. Industry executives were worried about the longer term damage to Hong Kong’s reputation as a fast and efficient transshipment port. Once container shipping lines consider costs to be too high, they would shift to other ports, such as Shenzhen, Shanghai, Kaohsiung and Busan. The last three cities already handle more transshipment cargo than Hong Kong, according to figures compiled by Hong Kong port planning consultant ICF GHK. Days before the strike ended, the Hong Kong dockworkers received a delegation from their Dutch colleagues employed by the same company. They earn 50% to 67% more than their Hong Kong counterparts and work 178 hours a month, compared to the 330 hours Hong Kong dockers put in. HIT said about 100 vessels avoided its terminals during the strike, only 1% of vessels that were scheduled to arrive, Chairman of Freight Forwarding and Logistics Dr Paul Tsui said.

Dock workers complain that their real wages have fallen in the past 17 years, while their working conditions have deteriorated. Many work 24-hour shifts without toilet or lunch breaks, said Lee Cheuk Yan, the strike organizer. Most of the 450 protesting workers at HIT were hired by subcontractors. “Inflation is coming back, housing prices are rising, food prices are rising. It’s placing much higher pressure on grassroots people,” said Wong Hung, Professor at the Chinese University of Hong Kong. The dock workers were demanding a pay increase of about 23%, but ultimately settled for 9.8%. At the end of the strike, the terminal was already back to around 80% to 90% of operating capacity, after HIT hired new contract workers, and waiting times at the port had come down to 20 to 25 hours, down from around 60 hours in the early days of the strike, but still far above the standard three hours before the walkout.