Asia Logistics Wrap

Logistics Managers on Positioning in Greater China

An interesting article from Cargo News Asia covers a recent logistics panel in Texas on operating logistics operations in China. In particular, I wanted to point out the author Greg Knowler's focus on the panelists' regular mention of the operational disconnects that still exist between the mainland and Hong Kong and Taiwan:

The limitations of a Hong Kong presence were raised by the panelists time and again. There was surprise that having this "China" office did little to open up access to the mainland.

"We find that Shanghai does not talk to Hong Kong," said Brock. "A mainland forwarder would rather lengthen the supply chain than go directly to Hong Kong."

Honeywell had the same experience, and Jay Fortenberry, vice-president of distribution and logistics, said communication between the mainland and Hong Kong - and between the mainland and Taiwan - was poor.

"We do a lot of boots on the ground business and find that even though we are in Hong Kong and have been there for years, the relationship between that office and China is not good," he said.

In the United States, it can be difficult to explain the differences between the countries of East Asia to non-observers, let alone those differences within a country such as China, expanded to Hong Kong and Taiwan. Therefore, it is understandable that proximity to China can be deceiving in regards to leveraging Hong Kong and Taiwan capabilities in connection with the mainland. Of course, a number of factors are involved here that are not simply infrastructural disconnects but also cultural. It will be interesting to see how these walls break down over time, and in the case of Taiwan, perhaps logistics can play its part in helping cultivate a more peaceful coexistence with the mainland.

In for the Long-Haul

Just as she reported recently on the challenges Wal-Mart faces in its attempt to expand its China footprint, Mei Fong of the WSJ followed that story up with a look at primarily two US trucking firms looking to establish their own China-wide footprint in long-haul trucking.

Rich at All Roads Lead to China took a shot a commenting on this story from his seat in Shanghai, and it is worth reflecting on his comments:

"What is most interesting to me in reading this article is Schneider’s intention to go it alone (a move I wholly support as JVs in this industry have been difficult to say the least). The investment that will be required will be huge, and I can only hope that they have customer(s) who have already committed to taking full lane and warehouse space in order to minimize the massive risk of underwriting the venture.

"Most of the providers I have met and have come to know are intent on a national network, and view it as a competitive advantage, but few plan to own much of it due to the complexity and level of investment."

With deregulation of China's logistics industry accelerating in order to meet WTO requirements, there is sure to be a great deal of activity to report on regarding the big and small players alike. It is definitely a very dynamic and exciting time for logistics professionals in Asia, even with all the headaches that come with operating in the various countries of the region.

Logistics Hurdles in Wal-Mart's China Bid

In the Monday, October 23 Wall Street Journal, reporters Mei Fong and Kate Linebaugh in Beijing and Gordon Fairclough out of Shanghai discuss the spectrum of challenges facing Wal-Mart assuming it is successful in its bid for Trust-Mart, a Taiwanese competitor operating in China. It is no surprise that logistics are one of the key challenges Wal-Mart will face and below I have highlighted the logistics-related sections of the article. This reporting is a nice case-study when considering I just posted on trucking in China yesterday:

"...perhaps the biggest challenge is the sheer difficulty of building and running national chain in China...roughly the size of the continental U.S., China still doesn't have a nationwide logistics network of trucks, highways and warehouses that can efficiently deliver supplies from farm to shop shelf."

One of the factors affecting transportation decisions is of course the type of product being carried. Perishables require another level of sophistication--a continuously controlled environment along the supply chain from supplier to customer that involves not only temperature controlled facilities and transportation, but also a rigorous inspection process to maintain quality requirements. In Japan, where quality control requirements are quite extensive, the inspection process and standards on acceptable product/packaging are quite stringent. China hasn't reached that level yet, but if Wal-Mart eventually intends to introduce nation-wide, or even region-wide efficiencies, the challenges are illustrated below:

"And, in a country where refrigerated trucks are still scarce, it is hard for modern hypermarkets to match the fresh produce -- not to mention low prices -- of typical wet markets, the no-frills, open-air venues featuring livestock in cages, where most Chinese traditionally shop. The lack of refrigerated trucks also encourages each region to develop its own dairy, beer and meat industry, making bulk purchasing harder.

"Half of every dollar spent on food in China goes to live and fresh products, according to Merrill Lynch & Co. Inc. estimates. "So it's very difficult to run a national chain and get efficiencies," says Merrill analyst Denise Chai.

"That's why China's retail stores are still highly fragmented, with the top 100 companies accounting for less than 10% of total retail sales, according to official statistics.

"In a business where size and scale are paramount, "nobody has a national footprint yet," says Yang Fan, a retail analyst at Euromonitor."

For logistics managers, it is obvious right away that total logistics cost are going to be significantly higher, and the WSJ goes into this further:

"These international retailers are facing some growing pains in the country, such as the high cost of deliveries. In China, transportation and distribution costs make up at least 16% of overall product costs, compared with less than 4% in many more developed countries, according to American Chamber of Commerce estimates. Refrigerated trucks are still rare, and only about a fifth of China's freight trucks are containerized, so the majority of cargo is vulnerable to damage on open flatbed vehicles.

"Carrefour, which is starting to penetrate China's interior, is finding it hard to keep transportation costs down. The company opened several outlets in Xinjiang province, which is about three times the size of France, and it takes about a week to truck produce between Beijing to Urumqi, Xinjiang's capital."

It seems there is a great opportunity in China for logistics companies with expertise and capital to invest in operating a perishables supply chain.

Trucking in China

Back in August while browsing FTB Asia, I came across an article on trucking in China that was written by Paul French out of Shanghai. FTB always has some interesting articles online during each month, but there is no freely accessible archive to refer back to for future reference. Thus, for now I am linking the overall website itself prior to going into this article.

Because a truck is a truck, in the end there are going to be a similar set of constraints and factors involved in trucking no matter which country a company decides to establish a new supply chain. Obviously, equipment, roads and terrain are primary considerations in the least sophisticated environments. At the other end of the spectrum, it is necessary to consider the systems and regulations that attempt to influence, organize and shape entire transportation networks. In China, it is quite possible to see both extremes, with a number of regions in transition trying to bridge the gaps. The FTB article very much illustrates this transition.

First, Mr. French paints the context:

It is going to get progressively more expensive to run trucks in China. This is not great news for a logistics sector yet to feel an easing of road loads, as rail freight takes a long time to expand and river transport continues to lag behind coastal port development.

Looking at the roads landscape across China, we see a number of factors that will push up costs: rising fuel prices, the government's continuing anti-overloading campaign, the introduction of toll-on-weight (TOW) schemes and more new expressways scheduled to become toll roads.

In essence, we have a China shifting from an "anything goes" environment on its roads towards establishing new rule sets as evidence in the anti-overloading measures and toll charging schemes. The hope is that this will encourage more sophisticated behavior in terms of utilizing the nation's growing transportation networks:

The good news is that if the various measures work, then more roads will be available linking the coast to the hinterland and more heavy duty trucks will take to the roads. The horrendous number of road accidents involving trucks should also be reduced and damage to road surfaces should be less, prolonging the life of the roads and limiting damage to cargo.

Of course, those that have up until now benefited from a loose regulatory environment will come under new pressures to innovate:

Toll-on-weight has been a controversial measure in China. So far it has not been introduced nationwide and the results in those provinces where it has been brought in are mixed. Anhui Expressway (AHE), the listed company that operates Anhui Province's expressways, recorded stagnant traffic growth in 2005 and attributes this to the introduction of a TOW scheme in the province in late 2004. However, revenues from levied tolls for AHE rose by 32% after TOW came into effect.

Other operators are expecting a boost:

TOW is now expected to be introduced into more provinces this year, with Guangdong and Zhejiang being the likely first entrants to the scheme before it goes nationwide. Zhejiang Expressway, the listed company that operates Zhejiang Province's expressways, saw tariffs increase 4.4% in 2005, due to the anti-overloading campaign being enforced rigidly and consequently more trucks (though less heavy duty trucks) using their roads.

This should be seen in all the major expressway operators following the central government directive that meant that all road operators reduced their tariff for trucks with over 10 tonnes capacity by 13% to 20%. The directive was intended to improve fuel efficiency and relieve toll expenses for trucking firms hit by both rising fuel prices and the anti-overloading campaign.

While China's TOW program is just ramping up, I would just like to mention that Japan's tolling system is very extensive and, like the US, has implemented electronic toll gates that improve expressway efficiency and results in toll discounts for trucking companies. However, the toll fees are very high, reflecting the cost of maintaining highways in a country accustomed to government largess, the high cost of imported materials and the need for earthquake prevention measures (i.e. expressway structure reinforcement).

When reforming entire networks, such as a transportation network, the result will be the need for reciprocal reforms in all the related industries:

The anti-overloading campaign has seen a high-profile crackdown by the government, both on overloaded trucks on the road and manufacturers advertising their trucks with exaggerated load capacity--for example, DongFeng Truck, one of China's largest producers, was instructed to pull advertisements that overstated their vehicles' load capacities by 25%.

However, the government has seesawed on the campaign. After an initial crackdown, the pressure was relieved slightly as companies such as Weichai Power, China's major producer of heavy truck engines, saw a serious decline in sales as the campaign depressed demand for heavy trucks. Weichai had a 70% market share in the high-power 15-tonnes+ capacity truck segment. However, when the campaign eased slightly, sales took off again immediately as fleets expanded again and Weichai sold a record number of heavy truck engines in the first quarter of 2006.

Japan is an interesting comparison. Like the United States, it has progressed further along the curve than China in terms of industry regulation. As with toll regulations affecting truck sales in the example above, in the US new requirements on engine emissions set to start over the next couple years has catapulted current year truck sales to new records--companies want to make the investment in equipment prior to the rise in prices expected in trucks with the newer, more environmentally friendly engines. In Japan, very stringent environmental regulations on trucking emissions greatly influences the costs of operation.

Of course, along with environmental considerations, fuel efficiency is a constant issue for trucking firms and transportation management officials. I have discussed this issue previously in the context of Japan, but since the Chinese government sets fuel prices across the country, delving into China provides an interesting contrast:

The government continues to artificially restrain petrol prices though staggered rises. Rather than introduce full market pricing for petrol, the government would rather see more fuel use efficiency first. To do this, it is introducing a staggered fuel tax with the aim of encouraging those trucking firms that currently prefer to use highways rather than toll road expressways to switch.

Despite the cost of tolls the expressways give greater fuel efficiency than highways.The result has been greater loads on the expressway system and less congestion and damage on the highways. The major expressway operators are all having to cope with rising demand as China's economic growth continues and investment moves inland, driving demand for coast-tohinterland transportation and private passenger car ownership rises adding to overall road use and congestion.

With the considerably rapid increase in traffic volume, upgrading infrastructure has already become a key concern in ensuring China's ability to keep pace with it's overall economic growth:

Those that developed their expressways first are having to upgrade ? both Jiangsu Expressway (JSE) and ZHE, which built fourlane expressways across eastern China in the 1990s, are having to upgrade them to eightlanes as the Yangtze River Delta continues to be China's primary economic powerhouse. JSE recently reopened its flagship Shanghai-Nanjing expressway after extensive renovation and expansion from four to eight lanes.

However, Guangdong remains crucial and Shenzhen Expressway (SZE) is also having to upgrade and widen roads as the exportoriented economy remains strong and private car ownership boosts traffic numbers in southern China. SZE is the fastest growing of the four major listed toll road operators, having acquired the Wuhuang expressway in 2005 and opening the Yanpai expressway (linking Yantian Port to the Pearl River Delta) in 2006.

As has been and still continues to be the case in Japan, regional differences in regulations and procedures in relation to trucking raises the costs of doing business in China. In terms of procedures, this can include how to register trucks, the transfer of trucks from one office to another, how to register new offices, and how to carry-out vehicle inspection and maintenance. Regulations that vary include the type of emissions equipment required, parking restrictions, weight restrictions, vehicle age restrictions, etc.  In Japan, because most prodecures are handled manually, many foreign companies hire third parties to manage it or fail to understand the true costs associated with such paperwork. Japanese trucking companies are quite adept at navigating the procedures but seem to be part of the issues that keep the overall system from reforming and streamlining. Mr. French touches on the regional barriers that place upward pressure on costs:

According to a recent report from CLSA Asia-Pacific Markets, logistics providers already face administrative costs of 14% in China compared to just 3.9% in the US. The major reason for this is China's persistent regionalism which means that tolls (both official and unofficial) proliferate the more provincial borders a truck must cross.

Even more costly and inefficient is that however good the road network, it is still often necessary to use more than one trucking operation to move goods across multiple regions and provinces, meaning that too many trucks in China are still operating with no load on their backhauls--but the tolls still apply.

That last part I highlighted in bold is exactly what the case was in Japan. Only now that prefectural barriers to entry have been reduced are small- to mid-sized Japanese companies seeking nationwide efficiencies and synergies by collaborating with other firms to solve such problems as backhaul. Due to the deep entrenchment of traditions in Japanese firms, this process is moving very slowly. I expect that the Chinese will move faster in reforming, but the question is how well they execute when facing such a steep learning curve.

Blog Round-up on China Logistics

I just want to point readers to some blogs that have recently done a nice job of covering some English articles on China logistics:

• Rich at All Roads Lead to China has touched on a Forbes piece reviewing China logistics while also more recently covering some concerns on China's revamping of its postal laws.
• The China Economic Review blog on logistics highlights China logistics turnover for the first half of 2006.
• 3PLWire has posted on South China logistics volume shifting from Hong Kong to other ports in China. The post includes reference to links on the same or related topics.

Please take a look at these sites and their other quality content.

China Logistics via Entrepreneurial Eyes

A browse today back through the archives of Knowledge @ Wharton revealed an interview with an American in China, Jeffrey Bernstein, who entered the logistics industry as an entrepreneur after years working for McKinsey & Co. Since entrepreneurs have to wear several different hats when starting-up and managing their businesses, I wanted to highlight the interview and briefly look at a couple of the lengthy answers in the context of logistics in Northeast Asia. Although the article is dated June of 2003, I believe the content is still quite relevant. Those readers and other bloggers working more closely with China than I am can better verify I am on target.

Mr. Bernstein's company is Emerge Logistics, described online as follows:

Emerge was founded in December 1999 to serve US and European companies that require high quality distribution operations support in China. The company is registered in Shanghai’s Wai Gao Qiao FTZ, and has been granted a business scope which includes both trading as well as logistics services. The company is privately held by its US parent, Mercury Holdings. The company founders participate in the management and remain majority equity holders. Over time, the company has diversified its industry coverage from truck and auto parts to include three other supply chain specialties: Wine and Food, Micro-Electronics & Computer Components, and Industrial Supply.

Although I recommend reading and downloading the entire interview for reference, the two questions I wanted to touch on discuss HR challenges, a common topic at this site:

Knowledge @ Wharton: What are the major HR challenges that companies can expect to face?
Bernstein: The so-called "gray gap" is a major issue. This refers to the lack of educated workers in the 38-50 year age group, which creates a gap in the supply of local managers relative to demand. The two main reasons for this gap are the closure of China’s educational system during the Cultural Revolution (1965-1975) and the nascent growth of foreign invested firms in China employing globally accepted management practices. Companies are often left relying on very bright but untested "30-somethings" for their core management teams. While this group is highly motivated, it is accustomed to rocket-like advancement and is not bashful when courted by headhunters anxious to help them "trade up."

In regards to the above challenge, one aspect is unique to China--the effects of the Cultural Revolution--while the other aspect can be placed with the external pressures attached to globalization--the penetration of globally accepted management practices. In Japan, you will find a similar dichotomy--discussion of issues unique to Japan like the "2007 problem" and issues that can be traced to globalization. I would venture to say that the Japanese, however, are relatively more risk averse compared with the Chinese in terms of employment. Although subway trains are plastered these days with advertisements for headhunting companies, my impression is that the Chinese are more aggressive.

Another challenge in HR is the tremendous entrepreneurial spirit of the Chinese. There is a saying that the typical Chinese would rather be the head of a chicken than the tail of a phoenix. The zest for individual achievement is incredible, and many young managers gladly underestimate the difficulty of starting out on their own -- and taking a few of their employers’ customers and other staff members with them. They dream of being emperors of their own domain, and while that attitude is commendable, it doesn’t mesh well with teamwork and information sharing.

I have met a decent amount of entrepreneurs in Japan, but from my visits to China and knowledge of individuals there who are entrepreneurs leads me to believe that the majority nature of Japanese leans to the "stay in line" type and avoids being the "nail that sticks out."

A third challenge is the passive nature of many of the middle- and lower-rung employees. They are taught in their schooling and families to do as they are told. People are afraid to take the initiative, as they will automatically assume responsibility, and will likely face difficulties whether or not their initiative bears fruit. It is little wonder that people like being their own bosses. The good news is that if these employees are treated with respect and clearly told what needs to get done, they are among the world’s most savvy and efficient.

It is this group that can best be described as similar to the majority of Japanese employees. However, whether that majority would like to be their own boss, I am not sure...

Knowledge @ Wharton: How can companies tackle their HR challenges?
Bernstein: The cardinal rule is to respect your employees. Give them a chance to learn, because training is highly valued in China. Also, make sure that you engage in benchmarking of benefits and salaries with the appropriate peer group. Some industries will have naturally different market demands. There is no way to stop an enterprising manager from leaving, but it’s best to try to gauge the personality of a person in an interview to assess how low that person’s threshold for leaving the job and starting their own company would be. In the meantime, it’s best to make sure that you keep a database of government contacts with whom your senior employees are in touch. If such employees leave, they will likely take relationships with them. You must manage your risk.

Typically, the sophistication of mitigating HR risk in a company correllates closely with the size of the firm. The above countermeasures seem sophisticated compared to what I would expect in the majority of small- to medium-enterprises in both China and Japan. But these recommendations seem very practical and could cross-over to the Japanese market--particularly assessment of quitting thresholds, contact networks, and peer compensation trends.

If possible, I will try to interview a logistics entrepreneur in Japan asking similar questions and with a logistics industry focus.

Additional News on China Logistics

As the China Law Blog has pointed out recently, the online China Economic Review has set up its own blog on logistics news, basically an aggregator of news from the most common China news sites like Xinhua and China Daily, in addition to other sites featuring articles on logistics. There doesn't seem to be much in terms of commentary or analysis, but it is always good to have another resource collecting logistics news that is focused on Asia--in this case, China.

China Logistics Conference Announcement (UPDATED)

Scanning the internet, I came across the China Business Services Blog which recently posted on the "First International Logistics China Congress 2006," described as follows:

ILCC will provide a unique platform that captures and present a comprehensive view about the current Chinese logistics market, its trends and investment opportunities, an accurate interpretation of the latest related government policies as well as all the major players in China.

The event is being held in Beijing from October 18-20 and I wish I could make it as it sounds to be very interesting. In the meantime, please visit the China Business Services blog--there are a variety of links and posts on the business side of China.

UPDATE: Of additional note, the China SCM blog has a summary of the recent CSCMP conference in Shanghai here and here (which I had wanted to go to until I ended up renewing my Japanese work visa in Tokyo).

Mapping China's Logistics Infrastructure

China is big, REALLY big. Thus, imagining how one could illustrate China's infrastructure in a single slide, the task would seem daunting. But Rich at All Roads Lead to China has taken his first best shot at doing so and produces a nice reference document for those looking to explain China to their less-than-knowledgeable-about-China colleagues or senior executives. It is one of those great intro slides that could precede a more focused drill down on logistics in China. Enjoy!

"Going West" along China's PRD

Throughout my posts on China, I have primarily focused on the corridor from the Yangtze River Delta (YRD) up through Tianjin and Beijing, with relatively minor attention paid to the West and South of China. There are two primary reasons for this: 1) I have never personally visited these areas and 2) most articles I come across are focused on the corridor mentioned above.

However, from Cargo Asia News, there is a new article on the "Go West" initiative I have mentioned before, but from the perspective of the Pearl River Delta (PRD).  The article titled "Investors urged to "Go West" in the PRD" is written by Lily Su out of Zhuhai. Zhuhai, along with the rest of the PRD proximate to Hong Kong, can be found on the map in the PowerPoint file below:

Download prd_map.ppt

Basically, the northern inland cities of China between the YRD and Beijing are getting a lot of business action and more inland cities West of Hong Kong want in on that party:

With the Beijing administration's "Go West'' policy showing some success, Guangdong cities are now taking up the same clarion call by urging companies to invest in the western region of the Pearl River Delta, away from the popular cities of Shenzhen and Dongguan. They point to lower land and labour costs which could put the companies on a better competitive footing.

The west bank of the Pearl River Delta lags behind in export-oriented manufacturing and logistics infrastructure, but is starting to build up. Major coastal cities in the region include Guangzhou, Zhongshan and Zhuhai. Foshan and Jiangmen (see the map above), located further inland, are also playing the cheap land and labour card.

Based on the next paragraph, "lags behind" feels like an understatement:

Compared to the east bank, which have top ranking ports such as Hong Kong and Shenzhen, the west bank has only small feeder ports and the container ports, except for Nansha, are still only on paper. Rail and road networks are also practically non-existent. There is no railway running through the western area in the PRD and most major highways such as the Taiyuan-Macau, Jiangmen-Zhuhai and Western Coastal Express are still partly under construction.

Even Nansha, the only container port open, seems to have its issues:

Nansha Port began operations in September 2004. It currently has four container berths and handled 1.08 million TEU last year. Before the end of 2006, it will get two more berths, boosting annual capacity to two million TEUs. The port, located in the southernmost region of Guangzhou, boasts of the shortest average distance to cities in the delta. But its has one disadvantage - it is upstream in the delta, which means it cannot accommodate 9,000 TEU plus vessels. Nansha quayside depth is 13m but Zhou Xiaoxi, vice director of Guangzhou Port Authority, said dredging is underway to increase draft to 15.5m.

From the accounts below, Zhuhai, as located in the map, seems to have the most potential. However, its development timeline is still in the distance:

Zhuhai, two hours further south, has better deep-water conditions but it is a feeder port and handles around 466,000 TEUs annually. Zhuhai Jiuzhou Container Ter-minals, a joint venture between Hutchison Port Holdings and the local government, handles 80 percent of Zhuhai's boxes, almost all of which are put on barges for Hong Kong.

Zhuhai is building another container port on the south side called Gaolan Port, the last of the three natural deep-water harbours in the delta. The other two are Yantian of Shenzhen and Kwai Chung of Hong Kong. The joint investors, Zhuhai government and Hutchison Port Holdings, hope to develop the port to serve direct calls from international lines.

"Gaolan will become the largest container port in the western PRD," said an official. But Gaolan's first container berth will not start operating until 2007, and the second will come into service in 2008.

The rail construction, however, is outpacing port development:

The construction of the first rail link to Zhuhai will start this year. It will start in Guangzhou, run inland through the west PRD, and end at Gaolan Port, giving the port better accessibility to cargo from inland cities.

Even though logistics costs may be high at the moment, looking at total cost, companies may still start making their move to the West due to other rising costs in the supply chain:

The east PRD currently remains the stronghold of manufacturing in Guangdong, said Dickson Ho, an assistant economist at the Trade Development Council of Hong Kong. But investors are showing interest in moving to the west PRD with rising costs in Shenzhen. "Some Hong Kong companies are interested in setting up factories in the west PRD, especially Zhongshan," said Ho. "Lower operating costs is the primary reason for manufacturers to Go West in the PRD."

One indicator of the rising costs on the east side is Shenzhen's decision to raise its monthly minimum wage by as much as 23 percent, from US$86 to US$106, with effect from July.

It seems Zhongshan is becoming a hi-tech industrial engine similar to Changzhou on the YRD:

The Zhongshan Torch Hi-tech Zone, an industrial park, meanwhile, is attracting electronics and auto parts manufacturers such as Canon, Suitomo, and Itochu. Zhongshan's trade volume from January to May this year totalled US$8.99 billion, a 29.5 percent surge. One of its subordinating districts, Shunde, ranked as China's second most wealthy county in 2005, right after Kunshan district in Suzhou.

In the end, Hong Kong remains the transhipment point of choice, and most efficient node in the PRD network of ports and manufacturing centers:

Ports in the western part of the PRD are offering various initiatives to investors to help it boost its container traffic. Hong Kong is expected to benefit from the west bank developments as it has been the favourite port of shippers in the region.

The usual route for West PRD cargo for overseas markets is via Hong Kong, said Louis Lee, general manager of Yusen Air and Sea Service (Hong Kong). "It is unlikely cargo from the west bank will be trucked to Yantian for export, as the cargo originating from the area can be easily and more cheaply exported through Hong Kong by barge," he said.

Ho of the Trade Development Council added: "The surge in barge transport from the West PRD to Hong Kong over the past year clearly reflects that it's a cost-effective way, compared with land haulage cum border crossing."

Hong Kong's terminals have proactively addressed this situation, launching initiatives to streamline operations so that the barges can come onshore more quickly, expediting offloads especially for barges with less than 10 boxes, and making it possible for same day-return for barges.

However, it is inevitable that some of the up-and-coming ports will skim business away from Hong Kong for a variety of reasons:

Meanwhile, Nansha, together with Guangzhou's bulk cargo port Huangpu, has jointly launched a South China public feeder express, particularly to attract cargo from Zhongshan and Guangzhou's Panyu district. Leaving from Zhongshan and Panyu to the nearby Nansha Port three days a week on barges, boxes can be exported at a much lower price than going through Hong Kong. Shenzhen's other container port, Shekou, has also made efforts to snatch a part of the West PRD cargo, launching an initiative with the co-operation of the Customs.

I am hoping I can make a visit to the PRD region sometime within the next year to see the port dynamics and explore further some of the up-and-coming cities to the west of Hong Kong. In the meantime, I appreciate any comments from those who have been to the area and have some insights or impressions to share.