Features
CHINA: Productivity - Room for Improvement

Chinese port officials say productivity gorwth is moving ahead, but has a long way to go.

By Wong Joon San

Larry Trebesh, general manager of Savi Networks’ operations in China, says that a recent China 3PL survey published this May shows that 36 percent say that tracking and tracing and Web-based operations are still big challenges in China. And 16 percent surveyed say that Web-based operations are a critical challenge in the mainland and need improvement.

“The country is quite aware of these challenges and is taking steps to invest in this area,” he says, adding that while improvements in supply chain efficiencies through use of RFID can add to a company’s competitive advantage, China still has a long way to go.

RFID adoption

In southern China, Savi Networks has signed agreements with Chiwan Container Terminals and Shekou Container Terminals to implement RFID at these facilities, but other Chinese ports are only observing.

Container data is captured as vessels enter the container gates. It is then transferred to a Web portal so all parties related to that container can carry out their tasks without having to wait for the data, improving the terminal’s productivity.

So far, Savi Networks has signed similar deals with 80 port operators globally, and it expects other Chinese ports to adopt RFID in the near future.

Growing pains for Shanghai port

According to Xu Peixing, director-general of the Shanghai Municipal Port Administration Bureau, the Port of Shanghai— the second busiest container port in the world — expects to record an average 10 percent growth this year.

However, Xu admits the port isn’t presently able to provide high value-added service or high-end maritime service supported by modern logistics, and it’s a long way from doing so.

Like other Chinese ports, the Port of Shanghai is enjoying strong container throughput growth from globalization and China’s economic growth but needs sustainable development of its facilities, public infrastructure and the environment.
Xu says that as Shanghai moves from a landlord port to a super port, it will face many issues, including having to change its mode and development focus. And the port is “thirsty” for modern management and financing.

He adds that the way forward for the port is to focus on how the deepwater Yangshan port can reach the hinterland in the mainland and deal with the challenges of Chinese Customs in and around the port.

With the Shanghai port not doing well compared with other leading ports worldwide, Xu says he’s searching for better solutions to improve productivity. And the port is hoping to become the world’s busiest container port by overtaking the Port of Singapore this year, with the addition of three more berths at the completion of phase 3B at Yangshan port by the end of 2008.

Improved productivity through negotiation

Collin Lim, general manager of YCH Logistics for South China, Hong Kong and Macau, says that though the Customs rules are the same for the whole of China, they are applied differently in different areas or are simply not applied.
Experienced companies like YCH Logistics have learned the “art of negotiations” with the customs authorities using professional customs consultants so that their customers’ goods can be cleared more quickly.
To increase productivity as well as enjoy substantial savings, companies can do their business through China’s export processing zones and various other types of Customs-controlled zones, says Lim, adding that a company can save between 60 to 80 percent of the costs by doing so.

Productivity through user friendliness

The Chinese customs bureau has also become market-driven, enterprise-friendly and more transparent and easily understood than in the past. As part of its efforts to modernize, Customs has introduced a green lane concept at border crossings to boost services and productivity.

Modern services have also been extended to inland container depots as well.
Da Chan Bay Terminal One’s commercial manager, Jason Sheng, says his terminal is a brand new container terminal in Bao An, Western Shenzhen, which opened its first two berths at the end of 2007.

“Three more berths are scheduled to come on stream in 2008 and 2009,” he says, adding that it is too early to report on the terminal’s productivity.

Currently, Da Chan Bay Terminal One has a full fleet of dual-hoist, tandem-lift quay cranes (QCs) that are used for higher levels of productivity than traditional QCs. The Da Chan Bay Terminal One quay cranes can simultaneously handle two 40-foot containers or four 20-foot containers with a total laden weight of about 90 tons.

Their outreach is about 220 feet across 24 containers, which can serve the widest container vessels in the near future. Their wide rail gauge of about 115 feet allows more tractor traffic underneath, faster tractor turnaround and greater operational efficiency.

With investments in the most modern equipment, another China port is headed towards greater productivity in the future.