China Creates a Bright Future For Freight Forwarding

Despite the global slowdown, China managed to show impressive growth in its logistics and freight transport infrastructure in 2009, according to the China Logistics Development Report 2010. This is a beacon of hope in a freight forwarding industry that has faced challenging times due due to the difficult economic conditions worldwide. In particular, China has suffered from a decline in demand for Chinese imports in the United States, Europe and Japan. However, the long term prospects for China and international freight transport look promising, when seen as part of a long term trend and in the light of current levels of investment in freight services infrastructure.

The total figure for all logistics activity in China was nearly Yuan 90 trillion, which is more than four times the figure in 2000, showing growth right across the country.Investment by both the state and the private sector in freight transport infrastructure projects has given rise to new airports, railway stations, roads, container ports and logistics centers that set a new standard worldwide and have created advantage for shipping companies and freight services companies.

Examples of the steps forward to create a better future for freight forwarding in China include the new sea-rail inter modal service called the Coastal Express which has been set up by the Shanghai Railway Administration, Ningbo Port group and China Railway Container Transport Corp .. The service runs between Ningbo Beilun Port Area Station and Wenzhou West, running at 100 km / hr and making the journey in less than four hours.

Indeed, rail is expected to become China's most high profile freight transport mode in the coming years as China embraces high speed rail transport. This is now the subject of reasonable government investment and many a shipping company and freight company are keeping a close eye on the developments. A Beijing scheme to build high speed links across the country will free up existing lines for freight transport, reducing freight forwarding costs for bulk cargo.

An example of this is the upgrade of the railway link between Jinhua and Wenzhou, which is to be upgraded to a high speed link over the next four years, with speeds reaching 200km / hr.

Meanwhile, the 189km Jinhua-Wenzhou line is exceeding its original projections for freight transport and is one of the most profitable joint venture railways in China.

For air freight transport too, there are many improvements happening right now in China.

FedEx has launched a new domestic transfer center for freight services at Hangzhou Airport and UPS plans to create an Asia-Pacific transfer center at Shenzhen Airport. What's more, a new airport to be established at Kunming will create a major hub for international freight transport to South East Asia.

However, despite the impressive growth, there are still considerable weaknesses in the Chinese logistics and international freight transport infrastructure and these are now being addressed as a priority by the Chinese government, given the importance of fueling demand for China import. These weaknesses include infrastructure that is sub-standard in some places, under-regulation of shipping companies, lack of standardization and insufficient uptake of modern technology to enable streamlined freight services.

Shaken by the global slowdown and its impact on China, Beijing is now focussing on addressing these weaknesses as well as upgrading the physical infrastructure for international freight transport.

The structural reforms now under way are pervasive and include reducing market access barriers as well as increasing supervision of the freight transport market. Another area that is addressed is support for the development of modern shipping companies and freight services companies that adhere to strict standards for service and performance.

These improvements will be especially significant for the areas of China that are most dependent on markets for China imports, such as Shanghai and the Pearl River Delta, which includes China's second largest port at Shenzhen.The improvements also include items such as a reduction in inter -provincial tolls.

Benefits will also be seen in other areas such as South West China, which has also greatly upgraded its transport infrastructure, and North East China, which has become China's gateway to Russia, with ports such as Manzhouli benefiting from the resurgence in Russia, increased demand for China imports and improved relationships between the two countries.

So despite the economic climate has been tough due to the global slowdown, China continues to invest in its freight services infrastructure and this bodes well for the future.