GLOBAL ISSUES GLOBAL ISSUES

SHANGHAI : GROWTH STRATEGY

Ding Songbing, General Manager, Strategy and Research Department, International Group (SIPG)

The Port of Shanghai is located in one of DEVELOPMENT INVESTMENT 's most economically developed As early as 2001, the predecessor of Besides the portfolio of seven container cities, situated at the middle of the 18,000 SIPG, Shanghai Port Container Company terminals in Shanghai Port, SIPG has stakes kilometre-long Chinese coastline, where (SPCCO), formed the basic framework in nine ports along the Yangtze River. The the Yangtze River flows into the sea. As the of the Yangtze Strategy. The throughput list from upstream to downstream is Yibin, direct hinterland of the Port of Shanghai, originating from Yangtze was less than 1 Chongqing, YueYang, Wuhan, Jiujiang, the Yangtze Economic Zone contributes million TEU, and accounted for 17% of the Wuhu, Nanjin, Jiangyin and TaiChangh. The more than 40% of the GDP of China, as whole throughput of Shanghai Port. Most total investment amounts to more than well as 25% of the nation’s total import of the terminals facilities and barges were RMB 3.6 billion (US$530 million). and export cargos. It is the base market out of date, small and slow, with higher The invested port JVs set up new for the port as well as a critical area for its safety and security risks, causing higher terminals, bought facilities to accommodate sustainable growth. costs for all the stakeholders. There was larger barges, developed a brand new The vast area of Yangtze River hinterland lack of an organized information system, Terminal Operation System (TOS) to gain is the market cornerstone and one of the and the small barges had to call for berthing higher efficiency, and enhanced age- most important driving factors in the at the terminals in Shanghai port several related workforce structuring by training development of Shanghai International times even in the same voyage, which old and new employees with skills needed Port Group (SIPG). To maintain and substantially reduced the hub’s efficiency. to handle containers. The type of barges increase the share of the container The company decided to invest in long- operating midstream in the Yangtze River terminal market along the river, SIPG term development by helping the port were upgraded from 150 TEU to 800 and has implemented the Yangtze strategy authorities along the Yangtze, as well as their even 1,100 TEU. Enjoying economies of for 16 years. The key of the Yangtze container affiliates, build up closer business scale, both barge operators and the ports strategy is speeding up relationships with Shanghai Port. As Shanghai gained high speed growth, and the shippers and systematizing the development of Port has a unique and strategic location as enjoy the cost savings as well. the ports, directing the flow of goods, the only major coastal port connected to The government also invested heavily on enhancing the port's influence over the inland China by the Yangtze River, it was the . The draft of main channel river catchment, and realizing sustainable first coastal port to become aware of the of the Yangtze was dredged to 12.5 meters development for SIPG. importance of the Yangtze Economic Zone. from 10.5 meters between Nanjing and

18 EDITION 75: AUTUMN 2017 WWW.PORTTECHNOLOGY.ORG GLOBAL ISSUES GLOBAL ISSUES

Shanghai, which benefits plans for the upsizing of barges as well as terminals.

HIGH SPEED GROWTH With the timely injection of the investment, all the ports grasped the opportunity for high speed growth of the market in the first several years of new century, right after China’s accession to the World Trade Organization (WTO). Upgrading industries in Yangtze delta after 2008, the global finance crisis, many manufacturers try to find new cost “depressions” to continue their business. Some of them moved overseas, and some moved upstream along Yangtze River because of the integrated industry and efficient logistics system. The economy in China’s inland and West area grew rapidly, which helped boost logistics demand. Among all the types of transportation, waterway instead of railway and highway transportation, won on cost performance, thus enjoys highest growth rate. Many container-handling facilities have expanded along the Yangtze River At present, Shanghai Port welcomes more than 1,500 container feeder barges development of the Yangtze River Economic of the Yangtze River economic belt” to monthly from Yangtze. The throughput Belt. In 2016, China’s 13th Five-year Plan build Yangshan as a bridgehead for the originated from Yangtze throughput proposed a series of policies benefiting whole system and enforce the group’s exceeding 10 million TEU for the first the further development of SIPG. The three strategies step-by-step. time in 2016, more than 27% of the total alliance members will work together to throughput (37.1 million TEU). However, push forward the standardization of the ABOUT THE AUTHOR most of the containers come from the barges’ type, optimizing the transshipment downstream Yangtze, as the middle and grading system, developing next generation Ding Songbing has had roles in investment upstream took only around a quarter of the consolidating and dispatching platform. analysis, successfully supporting the several whole throughput. The fact indicates that Which will eventually promote the Yangtze port investment decisions along Yangtze River. there is still room and long way ahead for River economic zone shipping system to After taking part in a joint training program SIPG to develop its Yangtze Strategy. an increasingly convenient, transparent, jointly held by Shanghai International Port efficient and environmentally friendly Group (SIPG) and AP Moller Maersk Group, FUTURE OUTLOOK status. he worked in the logistics division of SIPG, The container terminal and related With the integration of ports and and went back to headquarters to help market system in the Yangtze River area shipping businesses along the Yangtze with founding SIPG’s Strategy & Research is still in early stages of development. river, SIPG will step up efforts to construct department in 2008. Ding is a Certified Senior There is a large difference in the level the Yangshan deep draft shipping hub in Programmer, and has a Masters’ degree in of information system development northeast Asia, which will connect the Maritime Economics from Shanghai Maritime among port facilities, shipping systems, extensive economic hinterland along the University. and freight forwarders etc. in different River with the world. regions along the Yangtze River area. SIPG ABOUT THE ORGANISATION realized that with economic restructuring, FUTURE GROWTH the place of China’s traditional strength As the hinterland of the SIPG’s major SIPG operates the public container and bulk in manufacturing has been changed, now cargo flows, the Yangtze Economic Zone terminals in port of Shanghai, serves 281 is an era of supply chain competition, lays the foundation for the continued container shipping routes covering major especially for those manufacturers that success of Shanghai Port and is crucial to ports globally, which makes it the port with move to middle and upstream on the its future volume growth. It is vital for SIPG the highest density of container routes, the Yangtze. Amid consolidation, all the to maintain and increase business scale in most frequent shifts and the most extensive players in the port logistics supply chain the Yangtze River container market. The coverage in the mainland of China. SIPG has system need to provide standard and Yangtze River Strategy paves the way for recorded the container throughput of 37.1 efficient services to win customers. the group’s sustainable growth. million TEU, ranking first for the seventh On July 20, 2017, SIPG, together with Maintaining the rapid and sustainable consecutive year in terms of container volume partners including other 13 major ports development of containerization is in the year of 2016. and shipping companies in the Yangtze considered to be the top priority and the River area announced the establishment of core business of SIPG. While implementing ENQUIRIES the Yangtze River shipping alliance, which the Yangtze River strategy, Northeast Asia aims to enhance information integration, strategy and Internationalization strategy, 358 East Daming , container multi-modal transportation SIPG will take advantage of the nation’s Shanghai, China 200080 and to a realize green shipping and port “One Belt & One Road” strategy alongside Email: [email protected] system, so as to support the continuous its goal of “promoting the development Website: www.portshanghai.com.cn

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