Last mile transport is greatest challenge
Jan-30-2014 By : agxadmin
Last mile transport is the greatest challenge for logistics companies in China, while high road tolls and unregulated penalties have forced them to think of ways to lower costs. Total logistics costs in China topped CNY9.4 trillion in 2012, equivalent to 18% of gross domestic product (GDP), according to the China Federation of Logistics and Purchasing (CFLP). Road tolls and trucking penalties accounted for a third of those costs. About 95% of the country’s highways and 61% of its first-tier roads are toll roads, with only the roads leading to suburban areas or within villages free of charge. Trucks are also subject to many restrictions and penalties that weigh on the costs of logistics firms. “I wish the government could allow trucks to use highways after midnight,” said Johnny Chou, President and Chief Executive of Best Logistics Technology. The ban has left trucking companies with no option but to use highways illegally after midnight in order to guarantee timely delivery. China’s logistics market is very fragmented, with up to 10,000 logistics companies in operation, meaning that only a handful can take advantage of economies of scale. Traveling empty is also a severe problem for trucking companies, because they lack the comprehensive networks needed to optimize the routes they serve, leading to wasted capacity. Shenzhen Speed Distribution, a logistics subsidiary of consumer electronics manufacturer TCL, said it tried to mitigate costs through the use of an extensive warehouse network and better inventory control. Transport-related costs accounted for 70% to 80% of the operating costs of the Shenzhen-based logistics company, with warehouse costs making up the rest, General Manager Jiang Huangfa said. Most costs are out of the company’s control. “What we can do is to minimize the percentage of empty-leg trips and control the stock to just-in-time inventory level”, Jiang said. TCL has 20 non-factory warehouses and 40 regional distribution centers to increase the utilization rate of trucks on pre-designed routes and has outsourced its trucking needs to more than 200 companies with nearly 1,000 trucks, the South China Morning Post reports.
New Asia-Europe road to boost regional growth
Dec-12-2013 By : agxadmin
China, Russia and Kazakhstan are counting on a new road corridor stretching from Jiangsu province to St. Petersburg in Russia to help stimulate regional trade. After nine years of negotiations, the three countries recently reached an agreement on a construction plan for the Asia-Europe road. The length of the new corridor will be 8,445 kilometers-2,233 km of it will be in Russia, 2,787 km in Kazakhstan and 3,425 km in China. The corridor is expected to be completed by 2017, according to China’s Ministry of Foreign Affairs. Transporting goods from China to Europe takes between 15 and 45 days, either through the Suez Canal or the Trans-Siberian Railway. Commodities are usually distributed in containers and first routed through international logistics centers such as Rotterdam, Hamburg or Frankfurt. From these European transportation hubs, Chinese commodities travel a long distance before arriving at their final destinations in Russia or Kazakhstan. The new corridor will become Central Asia’s most important freight artery, with transit times shortened by 10 to 14 days. Freight volume passing through the Kazakhstan portion of the corridor is expected to increase from the current 1 million tons to 3.5 million tons, according to an estimate from Kazakhstan’s Transportation and Communication Ministry. “Building roads can be a tempting package to develop the service industry, logistics, hotels and infrastructure-related businesses. It will also create jobs for small and medium-sized enterprises and large joint ventures such as cement and steel plants in Kazakhstan,” said Hou Hanping, Professor of Logistics Management at Beijing Jiaotong University. About 2,450 km of the existing road in Kazakhstan, built during the Soviet era, will be rebuilt. Half of the new highway in Kazakhstan will have two lanes; the other half, which is near urban, populated areas, will have four. “From a long-term perspective, we are certain that many new towns will be built along the new Asia-Europe transport corridor,” said Lu Chuan, Vice President of XCMG Construction Machinery.
China hopes to develop “Southern silk road” to India
Nov-14-2013 By : agxadmin
Beijing is keen to develop a Bangladesh-China-India-Myanmar (BCIM) economic corridor along the “southern silk road” that extends from Yunnan to India. The road, dating back to the second century BC, would shorten travel time, cut transport costs, provide landlocked Yunnan province with access to the Bay of Bengal, open up markets, and create production bases along the way. The plan for the BCIM corridor is also at the center of Premier Li Keqiang’s offer of a “handshake across the Himalayas”. It was during Li’s visit to India this year that the corridor was first mentioned in official statements, even though it was mooted more than a decade ago. India, on the other hand, is fearful of the security implications of allowing China direct access to its border states and being overrun by China’s more developed economy. But several Indian experts see in the BCIM plan the promise of economic salvation for the country’s impoverished northeastern states and are urging the government to seize the opportunity. “As Yunnan is the most advanced in the cluster, India fears that it will become BCIM’s economic center, with the rest of the region reduced to its periphery,” said Binoda Kumar Mishra, Director of India’s Center for Studies in International Relations and Development. The proposed route would run from Kunming to Imphal in northeast India through Ruili in Yunnan and Mandalay in Myanmar. The idea of the BCIM is to first put in place a highway system along the land route and then turn it into an economic corridor with trading entrepots, tourism infrastructure and manufacturing hubs, possibly hosting production lines displaced from China and creating jobs along the corridor. But the sheer logistics of the 1.65 million square kilometer corridor, encompassing an estimated 440 million people, worry Ravi Bhoothalingam, who is on the Indian government’s panel on BCIM. “The area is huge, ecologically complex, ethnically diverse and needs the cooperation of multiple administrations. All these issues need to be studied”, he said. A strong Defense and Commerce Ministry lobby in India is still blocking development of the BCIM, the South China Morning Post reports.
New road proposed between Yunnan and Northern Thailand
Oct-17-2013 By : agxadmin
President of the Thai parliament Somsak Kitasuranont suggested that China should build a four-lane road linking Mohan port in Kunming with Chiang Khong district in northern Thailand, through Houayxay and Boten in Laos. The current road running through mountainous regions is difficult for cargo-laden trucks to pass during the rainy season.
Freight truck crashes kill 19 in China
Mar-28-2013 By : agxadmin
A brake failure caused a semi-trailer loaded with cement crashing into a car, a bus and a truck on an expressway in southern Fujian province, killing 11 and injuring 35 others. A second accident happened in northern Hebei province, where a truck loaded with stones crashed into a village temple fair in Fuping county. The truck rolled over, the stones fell off and hit villagers, killing six immediately. It says two more people died in hospital from their injuries. Road accidents involving heavy trucks are common in China, where overloading is routine and where drivers often ignore safety measures.
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