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Agility cashes in on booming interior China trade

2014/8/16      view:

As exports originating in China’s interior continue to grow, Agility inked a deal with Shanghai International Port Group Logistics, in order to strengthen its capabilities in the Yangtze River region.

The agreement gives Agility access to SIPG’s full range of logistics services, which includes operations at several Yangtze River ports, including depot management, vessel planning and loading, trucking, warehousing and booking services. Agility, a global logistics provider based in Kuwait, said it is the first foreign-based logistics provider to be given an all-access pass to SIPG’s full range of services.

“We have seen a significant increase in demand for our ocean freight services across China,” Thomas Gronen, managing director of Agility East China, said in a press release. “This partnership provides us with an improved platform from which we can better serve our customers in East China.”

SIPG is the sole port operator at the port of Shanghai and has operations at eight smaller ports along the Yangtze River. Agility Logistics is ranked 15th on the JOC’s list of Top 40 3PLs, raking in $4.5 billion in 2013 and services over 60,000 customers. According to Agility’s website, the company handled 513,500 TEUs last year.

The agreement gives the 3PL access to five of SIPG’s ports, in Shanghai, Jiangsu, Hebei, Anhui and Chongqing. The 4,000-mile Yangtze River, China’s longest, reaches ports as far as 2,000 miles upriver from Shanghai. In a 12-year plan announced earlier this year, SIPG said it has a comprehensive strategy focused on developing services along the Yangtze River.

“In order to serve the economic development along the river, and establish a faster, safer and more efficient cargo collecting and distributing network between the Port of Shanghai and the ports along the river, SIPG has, in recent years, invested in or set up several container terminals along the river and opened up logistics and feeder services to provide customers with one-stop logistic services,” SIPG said.

A decade-long dredging project on the Yangtze was completed last year, but the improvements keep coming. According to a report from Port News, Chinese Deputy Minister of Transport Xu Zuyuan said approximately ¥36 billion (about US$5.57 billion) may be spent on dredging and navigation upgrades on the Yangtze River from 2011 through 2016. Jiangsu provincial deputy governor Shi Heping said in the same report that his province has been spending ¥500 million a year on Yangtze projects since 2007.

The work was due, in part, to exponential growth in China’s major inland manufacturing cities. In a recent report, Citi Research cited large year-over-year growth in exports from several key interior China cities, showing that export-oriented industry is migrating inland from the coast consistent with China’s policy to have non-coastal areas share in export-generated wealth creation. Exports from Chongqing grew by 37.4 percent year over year, from Sichuan by 13.8 percent, from Jiangxi by 9.4 percent, from Guangxi by 35.2 percent and from Hunan by 24.4 percent year-over-year.