Shanghai’s Deepwater Logistics

November 23rd 2002 (FriedlNet.com) - China’s resource-poor coastal regions have historically accumulated much more wealth than their landlocked counterparts, partly fed by the oboli accrued to them by the lucrative business thriving on the region’s most prized natural endowment: water. Cashing in on this gift, Shanghai - the largest international maritime shipping center in China and fast to be the 2nd largest on the globe - last month began the construction of a 14 billion Yuan ($1.7 billion) deepwater port to avoid future logistical bottlenecks and cater to even larger cargo ships.

The first phase of construction of the new port began last month in Yangshan, Zhejiang Province, at the mouth of the Yangtze River in Hangzhou Bay, about 50 kilometers away from Shanghai’s bustling Pudong financial district. The new port is scheduled to be completed by 2020, have an annual water depth of 15 meters, with 30 berths and an annual capacity of 13 million TEUs (twenty-foot equivalent units) - almost double Shanghai’s 2001 figure of 6 million TEUs. The new site was chosen as the already existing Shanghai Port is only seven meters deep, only allowing for smaller ships to dock. Shanghai Port last year handled 204 million tons of goods, making it the largest port in China and the world’s third largest after Rotterdam and Singapore. The annual freight load is expected to even top 250 million tons by the end of the year, of which half was already shipped during the first half of the year, up more than 17% over last the same period last year. The number of containers handled in the first half of the year topped 3.84 million, a 31% rise over last year, right on course to surpass Taiwan’s Kaoshiung as fourth-largest container port in the world (top three: Hong Kong, Singapore, Busan). In a bid to boost annual handling capacity to 10 million containers by the end of next year, 7 billion Yuan ($845 million) are to be pumped into Shanghai Port until 2005. This, together with the Yangshan Port not far away, will reinforce Shanghai’s position as a very important logistical center for China’s center-latitudinal coastal region, the Yangtze River Delta not only serving the world, but also acting at the gateway to China’s own inland waterways. Daily handling capacity of import and export goods at the port in Shanghai has exceeded $300 million, and in 2001 the yearly total value of goods transported in and out was $120 billion, making up 2.4% of all of China’s imports and exports.

Waterways have proven to be some of the most important logistical channels in and out of the Middle Kingdom, building the backbone for the country’s kinetic foreign trade business. Shanghai will be only one of a few major ports to emerge in the future. On the southern stretch of the Middle Kingdom’s coast, Hong Kong is still the most important international hub, having handled 177 million tons of freight in 2001 and 17.8 million TEUs. Given Hong Kong’s lagging integration into the mainland, however, the main port at the Pearl River Delta, Guangzhou, is expected to rise in importance to serve the country’s southern landlocked areas. Guangzhou Port expects to handle 2.1 million containers by the end of this year. Handling capacity is to be boosted to 3.8 million containers and 6 million TEUs by 2010, brought on by the city’s newly announced plan to inject 8 billion Yuan ($1billion) into modernization and expansion projects in the next few years. A new oil wharf and chemical dock are to be built, three 35,000 ton container berths are to be rebuilt, and port depth is to expanded from to 13 meters to allow for 50,000 ton container ships to berth in the city. Last year the city handled 128 million tons of goods, making it the 3rd largest port on the mainland after Shanghai and Ningbo, the latter also situated close to the Yangtze River Delta.

Serving the northern coastal regions are Tianjin (114 million tons in 2001), Qinhuangdao (113 million tons), Qingdao (104 million tons), and Dalian (101 million tons).

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