Trucking business in Yangtze delta improves
Oct-31-2012 By : agxadmin
After a lackluster first half of the year, business has started to improve at Hangzhou Yongliang Logistics Co, which operates 800 trucks that carry cargo nationwide. In August, demand picked up, especially in the Yangtze River Delta region. Anhui Expressway Co, for example, which operates five expressways in the region, said it saw 19% more vehicles in August than in the same period last year.
Improved highways to boost truck sales
Apr-12-2012 By : agxadmin
Sales of mid-sized and professional vehicles are expected to soar in China over the next five years due to the rapid development of the country’s logistics and highway infrastructure, according to Baotou Bei Ben Heavy-duty Truck Co in Inner Mongolia. The company aims to double its current production capacity of 100,000 units by the end of the 12th Five Year Plan period (2011-2015). By that time, it hopes to generate more than CNY40 billion in sales revenue. Su Ritu, Deputy General Manager of a truck assembly company owned by Baotou Truck Co, said the demand for heavy-duty vehicles will rapidly grow because the country will pay more attention to the construction of highways, large-scale projects and logistics infrastructure in the coming years. Baotou Truck Co sold 118,197 vehicles during the 11th Five Year Plan period (2006-2010), raising its market share to more than 5% in the country. It aims to sell 150,000 vehicles during the next four years, according to the company.
TNT Express eyes bigger share of road delivery market
Sep-22-2011 By : agxadmin
TNT Express is vying for a larger share of China’s road delivery market, said CEO Marie-Christine Lombard. China’s delivery market will reach the same size as the current U.S. market by 2020, valued at €60 billion. TNT sees opportunities in the Chinese market because many logistics companies don’t pay enough attention to prompt delivery times, and customers are demanding a higher quality of service. TNT’s day-definite delivery service ― a guarantee to deliver a package by a certain date ― reaches 1,128 destinations in more than 140 large and medium-cities across China. Other companies only do it on a limited scale, says Lombard. “China’s logistics market is dividing into two separate markets: one is dominated by domestic delivery companies, which usually have no international networks or well-known brands, but compete with each other in a cutthroat price war; the other is controlled by the major four foreign companies who focus on high-end international express business,” said Chen Zhuo, Industrial Analyst at Huachuang Securities. According to Chen, China’s logistics market will grow by 21% year-on-year in the next five years. TNT Express accounted for 33% of the €1.2 billion express business between China and Europe in 2010. Formerly part of TNT Group, TNT Express listed on the Amsterdam Stock Exchange in May 2011, the China Daily reported.
Crackdown on highway tolls to lower transport costs
Jun-30-2011 By : agxadmin
Five ministries have launched a joint crackdown on exorbitant highway tolls after state media accused operators of earning staggering profits and adding to inflation by pushing up transport costs. Many expressway companies are jointly owned by regional authorities, which have resisted the central government’s crackdowns as they consider the tolls to be an important revenue source. Logistics costs in China last year accounted for about 18% of gross domestic product (GDP), twice the average for developed countries. Last year, the average profit margin of 19 highway companies listed on the Shanghai stock exchange was 35.5%, according to their annual reports. That ranks them alongside oil companies, securities firms and real estate developers. The average income of employees of the Ningbo-Shanghai expressway is about CNY8,000 a month, several times the local average. Its gross profit margin on highway tolls last year was 74%. Professor Zhao Jian of Beijing Jiaotong University said that the government “should change the highway companies […] to special enterprises with little or no profit, as roads and transport infrastructure shouldn’t be a private tool for money making.”
High tolls heavy burden on transport companies
Jun-01-2011 By : agxadmin
Payments of highway and bridge tolls make up as much as a third of the total transport costs incurred by trucking companies. Many trucks are overloaded to make the operation profitable. High transport costs have also prevented consumer prices of vegetables from dropping although farmers are paid very low prices for their produce. Dai Dingyi, Vice Chairman of the China Federation of Logistics and Purchasing, told CCTV that highway and bridge tolls in China are too high for transport companies. Feng Zhenglin, Vice Minister of Transport, said that the Ministry will study the debts, revenues, and charging practices of toll collectors and will reform or shut down collectors that fail to obey the rules. According to statistics from the Ministry of Transport, tolls have ceased since the end of 2010 to be charged along more than 90,000 kilometers of second-class highways financed by government loans. During the same period, 1,723 tollgates were closed in China. The country’s road tollway system employs too many workers and is inefficient, some recent reports suggest. In Luoyang, Henan province, a road company that manages fewer than 100 kilometers of tollways employs more than 400 people and spends about CNY40 million on operational costs each year, according to a report by China Central Television (CCTV). Employing too many people at toll companies raises tolls and the cost of shipping goods. Collecting road tolls has become a lucrative business in China, but only a small group of people share the profits. There are calls for local financial, audit and price departments to place the road companies under stricter supervision, but that might be difficult as toll collection companies are often partly owned by local governments.
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