Container volumes rise as Chongqing expands facilities
Tuesday, 24 April 2012 | 11:00
Larger vessels, expanded port facilities and upgraded management are boosting trade in the upper reaches of the Yangtze River, particularly at Chongqing, the main hub in the area.
The Chinese administration is determined to tap the potential of Yangtze River shipping to promote upper reach cities such as Chongqing, and Luzhou and Yibin in Sichuan province. Local companies have invested heavily in larger ships, more container berths and better online exchange systems.
Minsheng Shipping, a joint venture between Minsheng Industrial Group and Shanghai International Port Group, is riding on the new wave of shipping. “We’re undergoing research and development for larger container vessels to meet with demand in restructuring,” said president Lu Xiaozhong.
The river ports are expanding facilities, especially container berths. In Chongqing, the Cuntan port area will be able to handle 2.2 million TEUs when the third phase of its construction is finished by the end of 2012. Container berths able to handle another two million TEUs are also being built at Guoyuan port area. Launched in 2010 with close to US$1 billion investment, the Guoyuan berths are expected to be completed by 2013.
Chongqing Port last year picked up strongly in container growth, ranking among the fastest in the mainland, according to the Chongqing Transport Commission. The Chongqing International Container Terminal, one of the main operators at Chongqing, saw its container volume rise 15.5 percent in 2011 to reach 485,100 TEUs. This year it is aiming at 550,000 TEUs.
Yang Bo, president of the company, said although the total volume of container traffic remains limited compared with coastal ports, the container terminals are playing an increasingly important role in boosting the economy of the inland provinces and comprise the heart of the Chongqing shipping hub.
Chongqing also harvested the highest growth in general cargo volume among all river ports of China, and succeeded in joining the club of mainland ports with 100 million-tonne throughput of general cargo.
“We’re still in the process of regional restructuring of industries among eastern, central and western China, which belies opportunities and difficulties and may take years to yield results,” Lu said.
The proportion of container transhipment at Cuntan container berths of Chongqing is about 20 percent of the total. The container volume will rise sharply if container sources from Yunnan, Guizhou and Sichuan provinces are pooled for downstream shipping, according to He Shengping, president of the Chongqing Shipping Exchange. The exchange has upgraded electronic data interchange (EDI) platforms for forwarding, trading and other information flow across the upper reaches of the Yangtze.
However, the competition and outside environment for shipping operations along the Yangtze River has hardly turned for the better since the financial crisis. In contrast with constant rises in labour costs, fuel prices, funding difficulties and other charges, the freight rates have been on a decline.
“Both container and roll-on roll-off shipping are facing an imbalance in cargo sources,” Lu said. Downstream from western China, the containerised cargoes are mostly materials and resource-related goods which are heavy. But upstream goods from the coast to inland are manufactured goods that are much lighter.
“Such an imbalance and differences in industrial structure will pose a bottleneck for Yangtze River shipping,” Lu said.
As Chongqing becomes a manufacturing base for computer products and automobiles, more and more finished products are being transported out of the region due to limited domestic consumption, which forms an outstanding imbalance for ro-ro shipping.
Despite the global adversities, Minsheng Shipping has recorded a profit for three consecutives years since 2009. “That is a rather impressive achievement in the whole picture of the industry,” Lu said.
Minsheng’s container routes focus on all the ports along the Yangtze River and links with East Asia, especially Japan. “The Yangtze fleet of Minsheng is among the youngest in service,’’ Lu said.
The 300-TEU container vessels currently in operation by the company were built years ago when others were focusing on bulk cargo. In 2011, the company built six more 300-TEU container ships despite the pessimistic economic outlook, and two ro-ro vessels capable of loading 1,300 automobiles.
Lu said Minsheng is also building more coordination within the company, better management and services, and more extended logistic sectors to counter the difficulties. In the past decade, the company has disused barges and smaller container vessels. In the new era, Minsheng is expected to exhibit its regional and industrial advantages in consumption-oriented growth in the near future.