China Logistics Industry Report 2007 to 2008

China Logistics Industry Report 2007 to 2008 has just been published. China´s total value of logistics in 2007 reached RMB75.2282 trillion, up 26.2% year on year. According to a conservative estimate by the China Federation of Logistics and Purchasing, China´s logistics industry will have a compound annual growth rate of 16% in the coming three years. In 2007, the added value of China logistics industry was RMB1.7 trillion, up 20.3% year on year, accounting for 17.6% of the total of China service industry and 6.9% of China´s GDP. In 2007, China´s total cargo transport volume was 22.53 billion tons and its turnover volume of freight transport was 10.1 trillion tons/kilometers, up 10.7% and 11.8% year on year respectively.

 

Lack of port logistics costs Vietnam $1.7billion

Vietnam faces an extra cost of more than US$1.7 billion as the lack of port logistics leads local companies to have their shipments transshipped via ports in Hong Kong and Singapore. The country now has 114 seaports, most of them small, but only 14 are considered internationally acceptable. Vietnam has a serious problem in attracting industry to move from China until it gets its logistics straight.

India’s challenge to China falls down on logistics

There is a perception that labor in China is cheapest, but leading strategist George Zhibin Gu (in his new book: China and the new world order) is on the opinion that labor in India is by and large 50% cheaper than China — but that still China rules. And he answers the question as to why that should be. In his book he says that although India may be the world leader in outsourcing IT and software services field  in manufacturing China is by far the clear winner. All this boils down to the fact that India does not have a logistics chain complete with infrastructure in place. China, on the other hand, over last 26 years, has built up a complete logistical business chain. He uses an example the logistics of consumer electronics being made in Guangdong where you have available more than 10,000 component makers. Sony alone has more than 3,000 China based component makers.

 

 

Solar power for cargo ship

Two Japanese companies are building a new solar power system to run alongside the diesel engines on a cargo ship that transports motor vehicles to the USA, claiming it will cut fuel consumption by 6.5 per cent. The average cargo ship burns 120 gallons per mile and the fuel is commonly known as bunker fuel, which is claimed to be one of the ‘dirtiest’ fuels available. A study published in Environmental Science and Technology found emissions from bunker fuel cargo ships may have caused 60,000 deaths worldwide.

 

India warehousing set to grow to $55bn by 2011

The Indian warehousing sector is poised to become a $55 billion by 2010-11 with around 45 million sq ft warehousing space expected to be developed in the country in next five years supplemented by around 110 logistics parks. According to a report by real estate consultancy firm Cushman and Wakefield, warehousing activities account for about 20 per cent of the total Indian logistics industry and offer tremendous growth potential. This segment of the logistics industry is estimated to grow from $20 billion in 2007-08 to about $55 billion by 2010-11, growing at the rate of 35-40 per cent every year, the report pointed out.

Middle East to lead global logistics growth

With its strategic location between the West and Far East, the logistics sector in the Middle East is set to grow further. With an anticipated growth of between 17 and 19 per cent, the region’s logistics business is expected to outgrow the entire industry, which is expected to grow at nine per cent. The worldwide contract logistics industry grew by nine per cent to just over $140bn in 2007, according to new figures published in Transport Intelligence’s latest benchmark report, Global Contract Logistics 2008

What is the Tipping Point for Bringing Back Production to Domestic Market?

According to David Simchi-Levi of MIT, it is logistics costs as percent of total and infrastructure costs as the two key drivers. With the dramatic rise in fuel prices and thus transportation costs, there is growing evidence that some companies are relooking at the numbers and, in some cases, deciding to bring back production from Asia to domestic sources or “nearshore” low-cost countries, such as Mexico for the US or Eastern European countries for Europe. In the constant trade-off between transportation and inventory costs, rising fuel costs ultimately mean it is cheaper on the margin to hold more inventory if doing so can reduce other logistics costs.

 

Indian logistics industry is expected to grow at 15% to 20% per annum

Indian logistics industry is expected to grow at 15% to 20% per annum, reaching its revenues of $385 billion by 2015, said a report prepared by Cushman and Wakefield. As per C&W estimates, the market share of organized logistics players is expected to double to approximately 12% in the same period. The new logistics centers will give big boost to the industrial activities in the country. The report revealed that 110 logistics parks spread over 3,500 acres at an estimated cost of $1 billion are expected to be operational by 2012. Around 45 million sq ft of warehousing space will be ready in the next four years. Most of these developments are concentrated in 14 locations. Mumbai has emerged as the preferred location for the development of logistics parks with an investment of approximately $200 million. The other cities that fall within the established locations include Kolkata, Chennai and Hyderabad.