The Port of Shanghai became the world’s largest container port last year and is seeking to develop their international capacity to become a fully integrated shipping hub by 2020. They started a $7.6 billion shipping fund in February 2011 to invest in logistics, shipbuilding, ports and shipping services. Plans include increasing capacities and services to coincide with the completion of 50 deep water berths at Yangshan port and having the regulation and infrastructure in place to handle the expansion to support international trade.
In 2010, Shanghai moved 29 million TEUs, almost double what they did in 2004. They are funding and planning efforts to accommodate the growing capacity demand while adding regulatory and legal services for the maritime industry to flourish in Shanghai. Bridging this gap while working with neighboring ports will help them to achieve their goals.
“To promote the development of Shanghai’s container shipping routes, and relieve the pressure that rising costs and fees have placed on transportation businesses, the city government has researched and agreed to new regulations on the fee-collecting behavior of Shanghai’s container shipping companies, to clean up all kinds of unreasonable fees,” the port said.
The Shanghai State Council has been busy planning out ways for Shanghai to become a “major international financial center and shipping hub by the year 2020,” according to an article on the Journal of Commerce web site. “Lingang New City, in Shanghai’s southeast where the Yangshan deep-water port sits, together with the Waigaoqiao free trade zone and the Lujiazui financial hub are expected to become the major driving forces in Shanghai’s trade development over the next 10 to 20 years.”
Shanghai has offered tax breaks and other incentives to ocean shipping companies and other businesses related to ocean freight handling in order to boost sectors related to trade. They are moving towards handling international trade as well as they handle domestic.
The Managing Director of the Hong Kong Shipowners Association, Arthur Bowring says that “China has a population of more than 1.3 billion. It goes without saying that as such we need more than one maritime center. Hong Kong still has strengths that Shanghai has yet to attain in terms of the legal framework, a mature financial center and plentiful service industries. On the other hand, the sheer size of Shanghai is a strength in itself.”
Matthew Flynn, Principal of Flynn Consulting in Hong Kong, relates Shanghai’s plan to the model used in Singapore. “My view is that the Singapore model has covered both the port and maritime sectors with heavy government involvement to create a cluster,” he said. “The Shanghai strategy is much the same. The shipowners in Hong Kong speak more of a community. But the Shanghai strategy has achieved its goal with the port through money and steel.”
About the Author: Nelson R. Cabrera is the Business Development Manager of Lilly & Associates International, a transportaion and logistics company specializing in ocean freight and ocean shipping services. For more information, please visit http://www.shiplilly.com/.
Sources:
http://english.peopledaily.com.cn/90001/90776/90884/6623368.html
http://www.joc.com/maritime/shanghai%E2%80%99s-next-step
http://www.flynnconsulting.hk/whoweare.php