Forum explores opportunities and challenges of unprecedented growth in China’s Transportation Network
Schneider National, Inc., together with The Logistics Institute at Georgia Tech, gathered more than 250 logistics executives and government officials in Shanghai recently to explore the theme “Driving the Global Economy through China.’ Delegates at the three-day conference, held Oct. 23 through 25, predicted continued unprecedented growth in both marine and land transportation volume in coming years.
Shanghai is the world’s largest port in total tonnage and is ranked third in container traffic, after only Singapore and Hong Kong. US-China marine trade is expected to increase 12 to 15% annually, and by 2010, 35% of the world’s containers will be shipped from China. China has built more than 20,000 miles of expressways over the past 20 years, but speakers at the Schneider conference agreed that the development of China’s logistics industry has lagged behind the country’s expanding economic output and surging foreign trade.
“Modern supply chain management is needed to consolidate resources and optimize the efficiency of the circulation of goods in China,’ said Mr. Liu Zhi, general director for Industrial Policy at China’s National Development and Reform Commission. At present, spending on logistics and transportation accounts for 18 to 20% of China’s gross domestic product (GDP), compared to eight to 10% for the United States.
For this reason, “China’s 11th Five-Year Plan gives top priority to the development of the logistics industry,’ said Mr. Qian Yongchang, former Minister of Transportation and current chairman of the China Communications and Transport Association. While the transportation infrastructure is improving, development of the logistics industry is uneven across the large, fragmented market, and foreign expertise is welcomed by government authorities and domestic players. “Any company that can provide benchmark industry standards will probably be the winner,’ said conference speaker Erxin Yao, managing director of OOCL Logistics, China.
“China’s logistics industry has clearly reached an inflection point, where advances in both infrastructure and the demands of the market require a higher level of cohesion among global players in the supply chain,’ said Chris Lofgren, president and CEO of Schneider National, Inc.
Chairman Qian commented that the opportunities for foreign-invested logistics companies are significant, “We need to learn from foreign countries,’ he said. “Cooperation between domestic and foreign transportation and logistics companies will be beneficial for both ’ a real ‘win-win’ situation.’
On the last day of the conference, Schneider National CEO Lofgren announced that Schneider and CMIC plan to sponsor the second in this logistics thought leadership conference series in Beijing in 2007.
Also speaking at the conference were:
- Mai Boliang, president of China International Marine Containers Group
- Zhang Zhigang, chairman of China Foreign Trade Center Group
- Henry Ho, head of China research, UBS
- Charles Zhang, executive vice president, Shanghai International Port Group
- Xu Yahua, deputy general director, Department of Highway Administration, Ministry of Communications
- Pierre Cohade, president, Asia Pacific, Goodyear
- Gary Wu, vice president, Strategic Alliance, Volvo Group
- Warren Wisnewski, chairman, South Asia and general manager, Greater Asia, Eastman Kodak
- Steve Bertamini, chairman and CEO, GE China
- Perry Chao, managing director, Asia Pacific, UPS Supply Chain Solutions