I have been meaning to get to this article for some time, and it has been touched on already at 3PLWire. I just can't pass up going through it here because of my own recent, and albeit short, experience along the Yangtze River--particularly Jiangyin.
The article is "River of Opportunity" by Kris Knutsen and Clarence Kwan from Logistics Management Online, and was published on October 1 this year. The article is quite long and so I will just pull some pieces that add some context to my own trip along the Yangtze.
"...for companies that are willing to look westward, China's competitive advantages remain undimmed. Manufacturing wages in interior provinces are much lower, and prime industrial real estate is both more readily available and a fraction of the cost of land in the crowded coastal zones. Some of China's fastest-growing and most underserved consumer markets also beckon."
From conversations with Jiangyin officials, visits to sites with both utilized and available commercial real estate, and time spent downtown and in the parks taking in the local flavor, I can personally vouch that the above statements describe Jiangyin.
"The Chinese government has already spent billions of dollars to facilitate use of the river and to develop the roads and rail lines that parallel it. Much of that investment has been focused on “containerizing” China's inland economy; in other words, encouraging the use of containers to transport goods, by road, rail, or barge. For foreign investors looking for new opportunities to source, manufacture, and sell in China, the emergence of the Yangtze as a modern, multimodal transport corridor will be of tremendous significance."
This is an important marketing point for Jiangyin.
"The Yangtze, the world's third-longest river, is one of the most heavily utilized waterways in the world. Before 2000, traffic on inland stretches was almost exclusively bulk cargo, but as inland economies have grown, containerized traffic has markedly increased. Even today, the Chinese government estimates, 80 percent of the iron ore, 72 percent of the crude oil, and 83 percent of the coal delivered to manufacturing enterprises along the Yangtze is carried by barge."
As a result, in my Jiangyin post, you can see the new port equipment just prior to opening the second container berth. As the article states:
"In the short term, at least, expanding container capacity on the Yangtze will plug critical gaps in the existing road and rail network and will link huge areas of central and southwestern China to the coast at relatively low cost. The government has therefore moved quickly to improve conditions on the river through dredging, reef demolition, and, most particularly, navigational improvements associated with the Three Gorges Dam project. It has also coaxed more than two-dozen inland container ports into existence as far as 1,500 miles upriver. As a result, the river itself has emerged as a crucial enabler of expanded intermodal trade in China's interior."
One of Jiangyin's hopes is to increase direct-to-export shipments coming out of its ports by utilizing its own custom clearance authority. This will reduce costs by eliminating the need for many exports to transfer shipment at Shanghai. The article confirms what I heard from Jiangyin officials:
"Some operators are even experimenting with seagoing barges; the first one began serving the port of Yangshan directly from Nanjing in December. These deeper-draft, more powerful vessels will significantly cut transit times on the river and open the possibility of direct container-on-barge service from deep in China's interior to seaports as far away as South Korea and Japan."
In the meantime, until cities like Jiangyin become more strategic as a logistics hub, the growth at Shanghai ports pulls business through the smaller Yangtze ports:
"A major stimulus for the long-term development of Yangtze shipping is the massive expansion of container berths now underway at Shanghai. In December, the first phase of Shanghai's new deep-water container complex opened, adding 2.2 million TEUs of additional capacity to what is already the world's third-largest container port.
"Yangshan, located 21 miles off the coast, will eventually add between 15 million and 20 million TEUs to Shanghai's total handling capacity--more than the 2005 throughput of the top three U.S. container ports combined.
"With a six-lane causeway that provides the only direct link to the port short of capacity, and the timeline for introducing rail service uncertain, expanded barge service clearly will be required to move traffic between Yangshan and the mainland. Port planners now expect container barges will move more than 30 percent of that traffic by 2020, and barge companies all along the Yangtze already are moving to upgrade their fleets."
The article goes on to highlight Wuhan and Chongqing as worthy target locations for new waves of investment. But only looking at these cities means locations closer to the Shanghai-Nanjing corridor will be missed. Although I am biased, Jiangyin is one of those cities that deserves some investigation--not just for its available and growing logistics infrastructure but also for the city environs that I believe are quite hospitable to foreign crowds but without the congestion typical of the coastal cities. And of course, it is only a 1-2 hour drive from Shanghai making weekend getaways to the city entirely reasonable.