Freight transport in China: Seizing the initiative in the recession
The latest figures from 2010 show that China has overtaken Japan as the world’s second largest economy after Japan.
This improvement in China’s relative performance is encouraging news for China’s freight forwarding sector, which has been battling the global downturn in trade in recent years. However, even with the global slowdown, there was some growth in China’s freight transport infrastructure in 2009 as it anticipated this improvement in performance and planned for growth in demand for freight services. China’s response to the global economic downturn has been to take the lead and plan for a brighter future for China’s imports.
In recent years, China has experienced a global decline in demand for Chinese imports, and of course this has had a major impact on the country’s export-dependent freight service industry. Demand for China’s imports such as toys, furniture and textiles has been hit by the most severe economic downturn in decades.
Nowhere has the decline in Chinese import demand been felt more strongly than in the box traffic trade. The two largest container ports in China are Shanghai and Shenzhen. Throughput figures on both have seen year-on-year declines and the throughput figures mask even worse performance in terms of containers loaded. The Shenzhen port’s figures for cargo transportation are a direct reflection of manufacturing in the Pearl River Delta.
With imports to China also down as a result of its own domestic slowdown, volume declines have been evident in both inbound and outbound containers from southern Guangdong, China’s economic powerhouse. The high level of importation of raw materials for further processing and export means that the cargo services sector in China has taken a double whammy, as the decline in manufacturing due to decreased import demand from China has a direct effect on international cargo traffic to China. also.
Throughout this difficult period, domestic demand in China has been responsible for some increases in domestic container trade, and this has been good news for many shipping companies. In general, domestic demand has seen an increase in cargo trade from southern China to the north, which handles a larger share of domestic trade by shipping companies.
However, buoyed by the impact of the global slowdown on China, Beijing has increased its focus on improving international freight transport infrastructure. The Chinese government has spearheaded a number of initiatives. This includes physical updates and revisions to systems that affect international trade and international freight services.
Other initiatives have also helped pave the way for the next recovery, such as new direct shipping links between China and Taiwan. Kaohsiung in Taiwan, which was the world’s third-busiest container port in the 1990s, saw its ranking fall with China’s economic boom, as a lack of direct shipping links with China undermined its position and importance to the transport company.
An agreement between the two former political rivals has renewed Chinese interest in the port, boosting investment plans. Previously, shipping companies made costly diversions through third countries to get cargo from one side to the other. Therefore, the new dropshipping links will make the transportation of goods more agile and cost-effective.
Other initiatives related to the cargo services industry have also taken shape during the period of economic slowdown, putting China in a better position as recovery arrives.
One interesting initiative has been a joint venture between CYBRA Corporation of the United States and Key West Technologies, which have joined forces with the Water Transportation Institute (WTI) of the Ministry of Transportation of China to develop and manufacture container tracking devices for cargo. international. A joint venture, Beijing Smart Shipping Technologies (SST), has been established to develop smart shipping container devices and other intelligent transportation tools to create greater visibility of shipments in ocean transportation. CYBRA, which is a developer and distributor of barcode software for IBM, will join its partners in developing the only true global end-to-end tracking and monitoring solution for the freight services industry.
As the world leader in exports, despite the slowdown, China is taking a leading role in monitoring, controlling and managing the supply chain. It is believed that in the future, safe intermodal freight transportation will depend on smart technologies. China’s role in facilitating the marketing of such products will be of great benefit to shipping companies, and indeed to all shipping companies, allowing them to add value to their service. Smart technology will allow every piece of cargo to be tracked, monitored and managed anywhere in the world.
Due to initiatives such as these, along with the large number of improvements to the international charging infrastructure that the Chinese government is implementing, China will be in a prime position to maximize the global economic recovery when it arrives.