Tag: Asia

Forecasts predict a 20% annual growth in China's logistics industry

Posted by | Jan 17, 2007 | |

During the 10th Five-Year Plan period, Chinas logistics industry witnessed rapid growth. According to statistics of the National Development and Reform Commission, the National Bureau of Statistics of China and China Logistics and Purchasing Association, during the 10th Five-Year Plan period, the total amount of social logistics reached RMB 158.7 trillion, increasing 1.4 times compared with that of the 9th Five-Year Plan period, with an average annual growth of 23%, which is much higher than the GDP growth rate of 9.5%. The ratio of the total amount of social logistics against GDP dropped from 19.4% in 2000 to 18.6% in 2005. In 2005, the amount of Chinas logistics exceeded RMB 1.2 trillion, with a YoY increase of 12.7%, took 16.6% of the added values of servicing industry.

As investment in logistics infrastructure is increasing in China, and logistics technique and equipment is enhancing, the logistics industry is booming.
In recent years, Chinas logistics market is opening up to the outside world. Logistics enterprises are reorganizing and integrating in the competitive environment. It is more and more obvious that state owned, private owned and foreign fund enterprises are surviving and thriving in the competitive markets.

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Indian, Chinese express firms plan cooperation

Posted by | Jan 16, 2007 | |

Two of the leading locally-owned express transport groups in India and China plan to cooperate to profit from soaring trade between the two fast-growing Asian economies. Bilateral trade between China and India grew 83% to USD18 billion in 2006 and is expected to reach USD40 billion by 2010.

Gati, one of the largest road express operators in India, and China Railway Express International Logistics (CREIL) have signed a memorandum of understanding covering cooperation in courier services, freight forwarding, ocean freight and logistics.

Under the agreement, CREIL and Gati will be responsible for all infrastructure arrangements and transportation of shipments in China and India, respectively. The two firms are reportedly looking into creating a direct road landbridge between India and China through the Himalayas to transport shipments as well as using air and sea connections.

“This arrangement will enable the two companies to complement each other’s strength and service the large base of customers in India and China,” said Mahendra Agarwal, CEO and MD, Gati. The Indian company covers 594 of India’s 602 districts while CREIL, a unit of China Railways, covers 500 cities in the 31 Chinese provinces.

Hyderabad-based Gati has embarked on a major international growth strategy over the last year which is designed to transform it from a domestically-focused company into an international player. CREIL mostly uses the China Railway network for rail-based freight transport but also has a fleet of over 3,500 delivery trucks for nationwide distribution.

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India Post gears up to revive parcel biz

Posted by | Jan 16, 2007 | |

It will no longer be just passengers who’ll enjoy the comfort of travelling in air-conditioned trains. Now even your parcels – small, medium and large – booked with the Department of Posts (DoP) will be delivered across the country via the network of AC trains running in India.

In an effort to revive its parcel business, India Post has inked a deal – the Joint Parcel Product initiative – with Indian Railways. As per the MoU, to be signed soon, while the Railways will reserve a space in all Shatabdis and Rajdhanis for these parcels, India Post will ensure the pick up and delivery part of it.

Over the last five years DoP has seen a decline of over 77% in the unregistered parcel business with revenues coming down to a mere Rs 7.45 crore in 2004-05, as against Rs 32.70 crore in 2000-01.

Explaining that the tie-up would be on a revenue sharing basis, Khan said: “India Post is losing a huge chunk of its revenues from the parcel business to private players in the industry and the initiative will help us cope up with our deficit of Rs 1,100 crore by 2011.”

According to the last industry survey done in 2003, logistics and parcel business in India is to the tune of Rs 75,000 crore and DoP contributes a minuscule 0.5% or just Rs 400 crore to it. No wonder, the department is gearing up to establish a strong foothold in the parcel and logistics business.

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New era dawns for telecom ventures in vietnam

Posted by | Jan 16, 2007 | |

Foreign investors are looking to have more control in telecommunications now that Vietnam is a member of the WTO, said Tran Duc Lai, Deputy Minister of Post and Telematics.

Investors want to participate in joint ventures, where they can own and operate telecommunications businesses with Vietnamese partners, instead of signing a business co-operation contract (BCC), he said.

Agreeing to a BCC was the only way foreigners could invest in telecommunications companies before Vietnam officially became the 150th member of the WTO on January 11. But it’s still up to companies whether they want to use a BCC or choose to form a joint-venture or joint-stock partnership, according to Lai.

“If both Vietnamese and foreign partners want to establish a joint venture, they can negotiate to stop the BCC and implement the procedures for a future joint venture,” he said. Market experts predict foreign companies that have already signed a BCC will be looking to establish joint ventures with local posts and telecommunication companies rapidly in the near future.

One example is the recent announcement of a joint venture between DHL, the world’s leading express and logistics company, and the VNPT. There are seven telecommunications business co-operatives that have been formed so far this year.

Three BCC contracts have expired, with four still valid. The companies still under a BCC are: France Telecom and the VNPT, the NTT of Japan and the VNPT; the South Korean SK Telecom Co and the Sai Gon Postel; and the Hutchison Whampoa of Hong Kong and the Hanoi Telecom.

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Foreign Capital swarmed into China Logistics

Posted by | Jan 15, 2007 | |

Many foreign companies made investments in China’s logistics last year because of the opening up in 2005.

The competition in logistics mainly focuses on cargo transportation and express services. FedEx, the world’s largest express company, offers services to more than 220 Chinese cities. The number will increase by 100 in the following four or five years.

UPS, a leading global provider of specialized transportation and logistics services in the US, operates six direct flights to Beijing and Shanghai and has set up offices in over 20 cities, including Shenzhen, Qingdao, and Xiamen.

TNT, a world leading provider of express delivery services, logistics supply chain solutions and mail services, has had more than 2,000 service networks in China.

Meanwhile, foreign capital also focuses on auto logistics, energy transportation and port logistics.

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