Demand to soar for cold storage in China

China’s market for refrigerated warehouses is expected to grow by about 24 percent for each of the next five years amid a thriving consumer market and food-export sector, real estate services provider Jones Lang LaSalle has predicted. A change in eating habits and heightened awareness of food safety standards are boosting domestic demand for cold storage logistics, a report by the company said. Inadequate regulations and underdeveloped infrastructure are to blame for the gap, industry analysts said. On a state level, instead of having a dedicated department overseeing the cold chain logistics industry, the market is now supervised by a multitude of authorities. Too few quality refrigerated vehicles, railcars and containers and a relatively low stock of refrigerated warehouse space have also hindered development of the industry.

Deep port tipped to drive growth in Vietnam

The planned deep-water port in central Quang Tri Province, approved by the Government last year, will bring new economic opportunities to Viet Nam’s central region as well as Laos and Thailand. A recent survey revealed that the construction of a deep water port in My Thuy Commune, Hai Lang District, will bring up to 10 million tonnes of cargo a year through Quang Tri, its surrounding areas, Laos and northeast Thailand – boosting the sea transport sector and opening a trade gateway between central Viet Nam and the neighboring countries to the East Sea.

Reverse logistics gaining ground in India

Reverse logistics is the process of moving a product from the consumer to the manufacturer, the point of origin, for reuse or disposal. The process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. In India, aftermarket returns that form part of the reverse logistics industry are estimated at $10-15 billion. Aftermarket is the secondary market that supplies accessories, spare parts, second-hand equipment, and other goods and services used in the repair and maintenance of returned products. In contrast, the logistics industry contributes around 13% of India’s $1 trillion gross domestic product (GDP). Still, reverse logistics has the potential to become a key route to cost optimization as the Indian economy grows.

Logistics On a Bumpy Road to Recovery

The logistics industry took a particularly hard hit over the past year, according to the 2009 State of Logistics Report, released by the Council of Supply Chain Management Professionals (CSCMP). The recession has wreaked havoc with many of the companies that provide transportation and warehousing services to manufacturers, with more than 3,000 trucking companies alone going out of business in 2008, eliminating 7% of the available capacity on US highways. The only bright spot to this decline, at least for manufacturers, is that after rising more than 50% during the previous five years, the cost of logistics actually dropped 3.5% in 2008. The unfortunate reason for this decline is the simple fact that industrial production fell 7.8% in 2008, and thus manufacturers had less freight in the supply chain. The total cost of logistics in the United States now stands at $1.3 trillion, representing 9.4% of the US GDP. Inventory carrying costs dropped 13% over the past year, mainly because interest rates were more than 50% lower than in 2007. Warehousing costs were up 9.5%, as goods spent more time in warehouses, while transportation costs in 2008 were up just 2% over the prior year.

No Room On The Board For Supply Chain

A new report by Analytiqa, a U.K.based business research firm, found that in their survey ten percent of all European companies have stopped having a supply chain director as a board member, despite the fact that most have increased the head count within their supply chain department. The survey showed over 40 percent of European retailers and manufacturers no longer include any supply chain professional on their managerial boards. Ninety percent of the survey respondents had a positive view of the performance of their supply chain between 2008 and 2009. The most critical future strategic issues identified were forecasting accuracy, overcoming the growing complexity of their supply chains and managing increasing costs.

China Becomes World’s Largest Exporter

For the first time, China overtook Germany as the world’s biggest exporter during the first half of 2009, the World Trade Organization reported Tuesday.  From January through June 2009, China’s total export volume amounted to $521.7 billion, slightly exceeding Germany’s exports, which totaled $521.6 billion.  Germany has long been the biggest exporter of goods and services but has been closely followed by China in recent years. In 2007, Germany exported $1.32 trillion of goods over the full year while China’s exports reached $1.22 trillion, according to the WTO. However, between 2000 and 2007 China’s exports grew by an average annual rate of 25 percent, while Germany’s exports grew by only 13 percent a year.

Survey Finds Supply Chains Key to Strategy

Despite the growing importance of supply chain operations in Europe, over 40 percent of European retailers and manufacturers still fail to include any supply chain professional on their managerial boards, according to a new report.  According to the survey by Analytiqa, a U.K.-based business research firm, ten percent of all European companies have stopped having a supply chain director (or equivalent title) as a board member, despite the fact that most retailers and manufacturers that have a presence in Europe have increased the head count within their supply chain division. Although 90 percent of European manufacturers and retailers in Europe had a positive view of the performance of their supply chain between 2008 and 2009, they said their most critical future strategic issues are forecasting accuracy, overcoming the growing complexity of their supply chains, managing the strain of increasing costs, and aligning the performance of 3PLs to their strategic supply chain goals.

air/sea links planned between Thailand and Guangxi, China

Thailand and China have agreed to open direct air and sea routes between Thailand and Nanning city in Guangxi province to lower logistics costs and expand co-operation in trade and investment. Deputy Commerce Minister Alongkorn Ponlaboot disclosed the plan after leading a delegation to the fourth Pan-Beibu Gulf (PBG) Economic Co-operation meeting in Nanning last week. The countries agreed to promote road transport, especially on the R9 Highway linking Mukdahan province, Laos, Vietnam and Southern China, and the R12 Highway linking Nakhon Phanom, Laos, Vietnam and Southern China.

Logistics parks planned along India’s main freight corridors

The railway ministry is going to start negotiations with state governments this month for identifying locations for setting up of multi-modal logistics parks (MMLPs) along the Diamond Rail Corridors (dedicated freight corridors), an official at the railway ministry revealed. These logistics parks, spanning an area of around 400-500 hectares, would be developed through participative funding on a public-private partnership basis. The MMLPs would house rail sidings with sheds, large inland container depots, warehouses for storage, office buildings for logistics operators and assembly units for processing raw materials for export.

Shanghai to be Asia Pacific logistics hub

SHANGHAI aims to be the logistics hub of the Asia Pacific by 2011, the city said in a stimulus plan on boosting the logistics industry. Output of logistics industry in Shanghai will keep an annual growth of 10 percent and account for more than 13 percent of the city’s gross domestic product by 2011, according to the plan. The city will speed up establishment of a logistics resource exchange center and set up public distribution centers to offer door-to-door logistics services, especially agricultural products, medical equipment and medicines. It will also encourage manufacturers and logistics firms to cooperate to fight against the fallout from the economic crisis and develop major logistics projects, the plan said. The city’s logistics output increased 14.7 percent annually from 2006 to 2008 to reach 179 billion yuan (US$26.3 billion), accounting for 13.1 percent of the city’s GDP and 25.3 percent of the service industry.