Posts Tagged ‘Transportation and Logistics

01
Sep
11

Shipping Industry Rebound

There’s a lot of good news if you’re looking to make containers a part of your investment portfolio. Demand is Asia, most notably India, China, Singapore, are all rising. Development of these countries and those around them, is at record levels. In two separate reports we found this week, consumption in Asia is the main driving force behind the push from poverty to the acquisition of wealth and material goods that just a few years ago was a far stretch for many of the citizens of Asia. It’s amazing how fast things change in the world we live in today. Countries are pivoting quickly with the help of advanced technology, communications, and increased levels of education.

Containers

Industry in China is Growing

China Merchants Holdings, a diversified conglomerate with big investments in shipping and ports reported first half results earlier this week that were double the same period last year, thanks to a revaluation gain on its investment in Shanghai International Port Group and the appreciation of its office building in Sheung Wan, reported the South China morning Post.

The company also reiterated what we talked about last month about the moving of industry inland in search of cheaper labor. On the mainland, ports at Shenzhen West reported a 0.6 per cent fall in first-half container throughput due to a slowdown in exports in the Pearl River Delta, compared with 12.9 per cent growth on average in mainland ports.

“The slowdown in growth in Shenzhen is a long-term problem as the trend for factories to move out is irreversible, but Shenzhen still has a geographical advantage,” said Vice Chairman Li Jianhong.

Due to the influx of business moving inland, handling fees at Shenzhen port were frozen in the first half, compared with a five to eight per cent rise in handling fees in the Yangtze River Delta and an up-to-15 per cent rise in the Bohai Rim (also known as the Bohai Economic Rim or BER, which is the economic hinterland around Beijing and Tianjin).

This migration of business is rapidly developing the country and bringing new jobs to an unprecedented number of people in rural areas, who just a few years ago were moving to the coastal areas in search of work.

Growth is Driving India to Prosperity

In India the shipping industry is rosy, too.

The Indian shipping industry recorded an increase of over 20 per cent in business in the last financial year and in the first quarter of this year, which is expected to continue, said Shreyas Shipping Chief Financial Officer Vinay Kshirsagar.

Almost 90 percent of India’s trade by volume (70 per cent in terms of value)  is conducted by sea. With the largest merchant shipping fleet in the developing world, India’s maritime sector is set to grow to a size of $80 billion by 2020. The expected volume handled in 2020 would be approximately 1.7 billion tonnes.

While demand drivers like trade growth and geographical balance of trade (which determines the length of haul required) are very positive, the supply drivers like new ship building orders, scrapping of existing tonnage, etc, also indicate a good future for the Indian shipping and logistics sector. This is further given a boost by the privatization of ports and the strong thrust on infrastructure, said Nicky Mason, managing director, Informa India.

India is the world’s second most populous country and their consumption is rising along with their incomes. India is investing big money in its ports to calm inflation and keep the demand that is driving it up at bay. With big money being spent on ports and infrastructure, India will continue to be one of the biggest players in the region.

Growth in Asia is good for Container Owners

Owning containers is easy. Managing them is a different story. That’s what Pacific Tycoon does best. We are located in Hong Kong, in the heart of Asia, with the skill, experience, and knowledge to put your containers to work and start earning you a good income. It all boils down to the most simple of economic laws: supply and demand.

If there is sizeable demand for a product or service you can charge more. Demand in Asia is sky-rocketing and our containers owners are getting paid very well, to let us manage their investment. Contact us and let us show you how you can diversify your investments by owning containers and lease them to the very companies that supply the region with the necessary goods to do business.

Image: TopDealFinder

Source: HellenicShipping, CargoNewsAsia

23
Aug
11

Jordan Boasts a Robust Port

It seems like this is Middle East week on the P.T. Blog. Yesterday we reported on the boom in business going on in Oman. Today we shift our focus north-west, up the Red Sea to a corner of the Middle East, also called Levant ( which comprises Syria, Lebanon, Jordan, Israel, and the Palestinian territories). That’s a lot of ground to cover, but one port’s location puts it in prime real estate to just that and more.

Jordan Flag

Jordan’s Solid Port

Aqaba Port is becoming the docking place of choice for all shipping lines wishing to move cargo not just through Jordan but through the whole of the Levant and Iraq. With the rebuilding of Iraq under way, that’s no small task and the Port of Aqaba is sparing no expense making sure they get it right from the beginning.

The port was founded back in 2004 as part of a management contract between Aqaba Development Corporation (ADC) and APM Terminals Jordan. The concession agreement took place in September 2006 when a further 25-year joint development agreement was signed. Under the agreement, APM Terminals manages, operates and markets ACT and is responsible for the execution of the company’s ‘masterplan’. Over the past five years, the terminal has become a main liner facility, operating to international standards and playing a crucial role in the Jordanian economy.

Growth is Coming Fast

Back in 2006 the port’s gantry crane (cranes used to load shipping containers on ships) was a paltry 7 or 8 moves er crane/hour. That rate has jumped to 30 moves/crane/hour this year. Because if it’s location growth is coming fast.  Jordan and Aqaba specifically is located in a perfect spot to receive containers from most parts of the world that are destined for Jordan and the wider Middle East.

It is connected on weekly services from Africa, Europe, the Far East and the Indian subcontinent with a number of the world’s top shipping lines. Situated at the crossroads of 3 continents and 4 countries, Aqaba enjoys an attractive location in the heart of the Levant and caters to more than fifteen of the world’s top shipping lines.

Adding to the benefits is the fact that the water around the port is deep and therefore dredging is not a concern that other ports have the added expense of tackling.

A productive and profitable port take more than a blessed real estate and that’s another area that the Jordanian port shines in. Communications manager Ihab Alrawashdeh reiterates the other strengths. “We have excellent land transport connections for the rest of Jordan and into the Levant and Iraq, particularly in terms of road infrastructure,” in addition, Alrawashdeh said, “We are also directly connected to the rest of the logistics support areas such as the airport, so it is easy to deliver sea freight there, or bring air freight here. This is coupled with our international standards of operations and productivity.”

More Expansion

As of this year Phase 1 of the Port Project is completed and the next phase which will almost double the capacity of its berths to 1000 meters.

Aside from the investments in physical space, machinery, and services they are also pumping money into the most high-tech equipment. Productivity is key and to realize the master plan of being the leader in the region even small gains can put them ahead of the competition.

“When it comes to new technology, at the end of the day we are a port and there are only so many places where we can be cutting-edge. However, when those opportunities arise, we seize them. Our most recent investment has been in six new RTGs which are not only as advanced as possible in terms of technical capabilities, but they are also ‘eco-cranes’. This means that they emit much less CO2 than standard RTGs, but they still have very high productivity levels.” added Alrawashdeh.

At the End of the Day

Iraq is rebuilding after a long war and the Middle East is growing at a healthy rate. The Port of Aqaba is just the beginning of a long expansion of the potential in this region and the people who manage the port see this.  “Our final aim is for ACT to be a key transit hub for the Levant, especially Iraq,” he says. “This means that we are looking to double our total throughput and plans are already in place to achieve that. With our master plan and commercial strategy, I believe that this is something we will achieve within the next five years.”

Image: VirtualTourist

Source: ACT, BusinessExcellence, AqabaZone

22
Aug
11

Investment is Paying off in Oman

Just a few short years ago, the Port of Sohar was an ambitious project that was fighting a lot of competition in the Middle Eastern shipping business. After huge growth year after year, it’s starting to turn more heads than a cat walking model.

Oman

Official Directive

In line with the royal directives of His Majesty the Sultan, Port Sultan Qaboos will be converted from a commercial port to a full-fledged tourist port. During the implementation of this project, the Port of Sohar is proposed to receive additional container throughput of 350,000 TEUs, according to Sohar Industrial Port Company – the landlord-operator of the industrial port, reported the Times of Oman.

Facts and figures

In 2007 the port handled just 6,290 twenty-foot equivalent units. This year they are projected to handle of 100,000. With the addition of the traffic that will be rerouted from the Port Sultan Qaboos, that number is expected to jump to over 500,000 in the next year and a half.

The Port of Sohar is a 50:50 joint venture between the Government of Oman and the Port of Rotterdam and located 220km northwest of the capital Muscat. The industrial port is a deep-sea port and has grown tremendously in size and importance in only seven years since its start in 2004.

First Class

Like most things done, in the middle east, they’re done high-class and tech proficient. The Port of Sohar is no different. The ports development was initiated back in 1999 as part of the Oman Vision 2020. Because of the attractive position in respect to the Arabian Sea and the Indian Ocean, the initiative is seen as a primary attribute to spreading trade throughout both the country and boosting its clout with neighboring ports and countries.

On Thursday of last week it was reported in the Oman Daily Observer that the Sohar Industrial Port Company (SIPC), signed a deal for the establishment of “Port City”. The new $15.5 million project will be located in front of the port secured area, the complex will provide members of the user community, notably shipping agencies, freight forwarders, and other port and maritime service providers with a suitable and fully equipped base from which to conduct their business within Gateway Sohar.

“Any port attracts many different users and third parties, such as shipping agents, freight forwarders, and so on, as well as government agencies that handle customs, health, quarantine services, and so on. We believe a complex like this is a key requirement within the port area to serve these various users. It will be a hugely successful venture because it provides a comprehensive range of services and amenities, including shopping, fuel, and other services. This combination of services is a good factor in attracting parties, who are currently scattered or not present in Sohar, to take up space in this complex. We’d like to encourage specifically shipping and cargo handling agents, among others, to have their offices at Port City.” said Jamal T Aziz, CEO of Freezone Sohar.

Construction work on the project is expected to commence by December 1, 2011, with Phase 1 due to be commissioned by 2012-end. Phases 2 and 3 will be brought into operation by the end of 2014.

Phase 1 planned to be a “One Stop Service Building” which will house the front offices of relevant government departments and shipping agencies, allowing efficient document handling for the continuously increasing marine activities in Port of Sohar.

Along with the service building, phase one will also include a Superstation- a new concept filling station with a range of facilities for both trucks and drivers. It will feature a service station for trucks, coffee shop and shower facilities for drivers. This part of the project will be supervised by Oman Oil Marketing Company (omanoil).

J.O.B.S.

Subsequent phases of the project will offer space for businesses, such as banks, local retail and even a supermarket. With its high level of ambience and amenities, Port City will emerge as a landmark within the Port of Sohar, said Jamal Aziz, adding that the project is also expected to create a large number of jobs for local Omanis.

The port has obviously done some good planning. They are taking advantage of the increase in business by catering to their clients. In doing so, they’re creating jobs, making money, and keeping everyone happy and busy. An idle mind is the devils playground. It looks as though there’s no such thing at the Port of Sohar. Things there are going to be there busy for quite some time.

More jobs equal more money. More money equals more spending. More spending equals more goods and services coming in and going out of the country. Contact Pacific Tycoon. Let us show you how you can be part of this growth in Oman and the rest of Asia through container ownership.

Image:CTGroupTravel

Source: CargoNewsAsia, TimesOfOman, PortOfSohar, OmanDailyObserver, OmanInfo

19
Aug
11

India Gets Serious About Inflation

Demand is a funny creature. A healthy dose of it keeps the gears of the economy rolling smooth. Too much of it, drives up the cost of goods and services and can grind the wheels to a halt. Not enough demand and the same thing happens. Moderation is the key. It’s hard enough moderating your own personal vices yet alone those 1.2 billion people, in the world’s second most populous country. Despite the difficulties that come with managing that moderation, India is tackling the problem with a new round of planned investments in its port to the tune of US$60 billion dollars.

The Social Network

A Trillion is Cool!

In a line made famous by the movie based on Facebook, one of the lead characters told the young founder that a million isn’t cool. A billion is cool. If that’s true then the planned investment in Indian ports and other transportation outlets well surpasses that.

The $60 billion dollar investment in the ports is part of Prime Minister Manmohan Singh’s planned $1 trillion revamp of choked transport and power networks to achieve faster expansion.

The initiative must transcend a history of insufficient investment, which has left the world’s most populous democracy trailing a Chinese economy now more than three times larger.

“If there isn’t enough capacity, you lose time and it adds to cost,” said Leif Eskesen, an economist at HSBC Holdings Plc.

Companies Want Action

Thermax’s, a power equipment manufacturer, managing director M. S. Unnikrishnan says “It takes 45 days transportation for incoming cargo for me and similar time when I send it to my customers overseas.” He was also quoted as saying,  “The Chinese can possibly do it in seven days.”

This adds costs and reduces efficiency and India is taking action. The Indian government is relying partly on investment by companies such as DP World Ltd. and AP Moller-Maersk to lift capability at ports to 3.1 billion tonne by 2020 from 963 million tonne in 2010.

After implementation of the building this will enable greater imports of consumer good like, electronics, raw materials, and oil, which in turn dampens inflation by better feeding consumer demand. India has 13 major ports overseen by the central government and 187 smaller harbors that account for 90% of exports by volume. India imports more than it exports and thus had a trade deficit of almost $105 billion in the last fiscal year.

They Keep Coming

At 1.2 billion people and growing, India is the second most populous country in the world and that figure is only getting bigger. They are projected to capture the title of most populous, overtaking China by 2025. In reality, that’s not that far into the future and arrives just after the total of the ports investment money will be put into action by 2020. Perfect timing.

In the meantime, Pacific Tycoon is here to help you wade through the waters of container ownership and leasing that puts your money to work by leasing your containers to the world’s largest companies that are shipping to India, China and other fast growing economies in Asia. With the world financial markets and developed countries are suffering due to mismanaged debt, demand is Asia is pumping money into the hands of our container owners. Contact us and let us show you how easy a direct investment into the Asian economies can be.

Image: TheSocialNetwork

Source: HellenicShipping, Wikipedia

18
Aug
11

China Invests Big Stake in Sri Lanka

Back in July, on the 19th, we wrote a post entitled, “Investors Queue Up in Sri Lanka”. We covered the strategic importance of the port and the value it has for the Chinese. Last week as reported in the South China Morning Post that, China Merchants Holdings International has signed an agreement to take a majority stake of 55% in the project at the Colombo South Container Terminal in Sri Lanka.

Sri Lanka

Big Money Flowing In

At an expected investment of more than US$500 million, the deal would be the single largest foreign investment by a private company in Sri Lanka, China Merchants said.

The relationship between China and Sri Lanka is an old one. At present China is their largest bi-lateral trade partner. That relationship was kicked off in 1952, when the two countries signed the Rubber-Rice pact where Sri Lanka (then Ceylon) supplied China with Rubber and China exported rice to the island, and has flourished ever since.

During the War with the Tamil Tiger that ended 3 years ago, it was the Chinese and Russians who held off the UN from issuing a cease-fire. The Chinese supplied the nation with arms and other assistance to help make this victory a reality.

Money in More Than Ports

I was able to pull up a pretty complete list of Chinese investment in Sri Lanka from a CNBC post written just 2 weeks ago that follows.

China was Sri Lanka’s largest lender in 2009 and 2010, giving $1.2 billion and $821 million respectively. In 2009, that figure accounted for 54 percent of total foreign loans, and 25 percent in 2010.

In the first six months of 2011, trade between China and Sri Lanka was worth $1.28 billion, a rise of 39.5 percent on the same period in 2010, according to Chinese customs data.

China’s imports from Sri Lanka in the first six months of 2011 were worth $68 million.

INVESTMENT

Foreign investment of $1 billion will flow into a 500-room hotel by Honk Kong-based Shangri La Asia and a shopping mall by China National Aero Technology Import and Export Corporation (CATIC) in Colombo, the largest investments so far into a post-war tourism boom.

The latter has run into an issue, with the president questioning whether the land should be sold as first agreed by his brother, Economic Development Minister Basil Rajapaksa, or given on a long-term lease, according to local media.

CONTRACTS & TRANSACTIONS

Sri Lanka has signed a $450 million deal with China Merchants Holdings and local conglomerate Aitken Spence to boost the Colombo port’s cargo-handling capacity.

Sri Lanka, with a tradition of strict foreign exchange controls, has allowed international banking transactions denominated in the Chinese yuan since June 29.

LOANS

China Development Bank Corporation has agreed to provide $1.5 billion within three years for construction of roads, bridges, power plants and water and irrigation schemes.

PORT DEVELOPMENT

China has lent $400 million for the first phase of the new port in Hambantota and its Exim Bank has lent $77 million for an oil bunkering facility, while another $810 million has been given for the second phase with China Communications Construction Company as the contractor.

ELECTRICITY DEVELOPMENT

China’s Exim Bank loaned Sri Lanka $455 million to build the first phase of first coal-powered generation station on the Indian Ocean island nation, and has offered an $891 million loan to build the second phase of 600 MW.

ROAD DEVELOPMENT

China has pledged around $760 million to the island nation’s road construction across the country, including $302 million for projects in the war-ravaged north.

A $310 million Chinese loan from its Exim Bank has been granted for the Colombo-Katunayaka express road, which will connect Sri Lanka’s only international airport and its commercial capital, Colombo. It is due for completion next year.

AIRPORT

China has also lent $190 million for Sri Lanka’s second international airport in Hambantota, which is on Sri Lanka’s southern tip and happens to be the president’s electorate.

RAILWAY

China’s Exim Bank has committed $102.5 million for Sri Lanka to buy 13 new diesel engines for its railways. The engines will come from Chinese manufacturers.

A Very Close Relationship

As the Chinese command more and more of the space that takes up the ocean via shipping lanes and requires more and more raw materials for its own expansion, the country is making wise investments overseas. Sri Lanka is an important port location and the Chinese investments in the past and support of the country puts them on top of the list when help is needed for expansion.

More and more goods are being consumed world-wide due to Asia’s growth and development. Waves of money are coming onto the shores of countries like Sri Lanka, India, China, Korea and a host of others. Money from foreign nations is pouring in both from government and the private sectors to invest in this growth. Where are you putting your money? Give Pacific Tycoon a call and find out how you can be part of this growth, through container ownership. It’s a lot easier than you may think.

Image: LonelyPlanet

Source: CargoNewsAsia, CNBC, IAS100

17
Aug
11

China All Over Top Container Port List

If you want to see where the developed world stands in today’s global economy, then take a look at the Top 20 ports list for 2011. There’s one in the top 10 that doesn’t belong to an Asian country. Rounding out the top 10 is, Rotterdam, the second largest city in the Netherlands and the largest port in Europe. Antwerp, Hamburg, L.A. and Long Beach are the only other non-Asian ports in the top 20.

Hong Kong PortString of Pearls, More and More Attractive

The Chinese Academy of Sciences recent research report says that container throughput in the Asian region is being fueled by strong Economic growth from China, India, and others in the region, including the Middle East.

Huang Anqiang, a senior member of a specialized economics team working for the centre said that China will likely prevail again in the year-end standing of top container ports. His team expects 10 of China’s container ports, including Hong Kong and Kaohsiung, to be in the world top 20 league this year, one more than in 2010.

“The transfer of the world manufacturing centre and slow economic growth in advanced economies will push down their ports down the ranking of top 20 global ports,” Huang said.

Most ports in the top 10 list will not be from advanced economies in 2011. This is in huge difference compared to the year 2000 when nine out of the top 10 were from developed countries, Huang said.

Apart from China, ports in Southeast Asia and the Middle East are picking up speed thanks to faster-growing regional economies and their locations on trunk shipping lines.

Singapore, which was displaced by Shanghai from the top position by a small margin last year, has continued its slow growth since the latter half of 2010. However, its ideal location, free port policy and increasing trade with Southeast Asian nations may shore up its volumes in the rest of 2011. The city state’s container volume for 2011 could exceed 29 million TEUs again but it will fall slightly short of the top mark expected to be achieved by Shanghai.

Malaysia’s Port Klang is turning its attention to container trade related to China and India, two of the world’s strongest growing economies. The strategy has paid off and it expects to report 8.8 to 10.7 percent container throughput growth for 2011. The Port of Tanjung Pelepas has tapped its potential for domestic as well as international trade to maintain a higher growth of at least 13.7 percent, which could place it 17th in the global rankings.

Top 20 container ports in 2011 (forecast)
Ranking, Port, Country

  1.  Shanghai, China
  2.  Singapore, Singapore
  3.  Hong Kong, Hong Kong
  4.  Shenzhen, China
  5.  Busan, China
  6.  Ningbo-Zhoushan, China
  7.  Qingdao, China
  8.  Guangzhou, China
  9.  Dubai, Dubai
  10.  Rotterdam, Netherlands
  11.  Tianjin, China
  12.  Kaohsiung, Taiwan
  13.  Port Klang, Malaysia
  14.  Antwerp, Belgium
  15.  Hamburg, Germany
  16.  Los Angeles, U.S.A.
  17.  Tanjung Pelepas, Malaysia
  18.  Long Beach, U.S.A.
  19.  Xiamen, China
  20.  Dalian, China
For comparison purposes, in the year 2000 Shanghai was number 6, Shenzhen was 11, Ningbo was 65, Qingdao was 24, Tianjin was 32. Shanghai and Shenzhen made respectfully good jumps up the list but Ningbo, Qingdao, and Tianjin come from the stratosphere smashing onto the chart this year. You can see more of the comparisons at RITA (Research and Innovation Technology Administration)

More Reasons

With 9 of the top 10 ports in Asia, you’ve got 9 very good reasons to look into direct investments in the container industry. Pacific Tycoon has the experience, knowledge and expertise to manage containers and pay you very well as you lease them to the very companies that supply the region with material goods needed for the ongoing expansion.

Source: CargoNewsAsia, ChineseAcademyOf Science
16
Aug
11

Kuwait Megaport

I saw quite a few headlines last week regarding the development of the New Kuwait port on Boubyan Island. They were all the same. Iraqi Shiite militant group Ketaeb Hezbollah, grabbed the space on a few notable sites when they threatened to strike the port if development is not stopped.

Kuwait City, Liberation Tower

Digging further

The Development of this port, whose projected first phase is over $400 million and total planned development is well over a billion dollars is just one of many that are going on in the middle-east.

Aside from this project we found 9 others that were highlighted in September 2010 post for Construction Week Online. In the post they list the top 10 port projects going on in the Middle East. Qatar and Oman, both took three spots each on the list along with Saudi Arabia UAE, Kuwait, and Abu Dhabi rounding out the top ten.

Shiite Complaints

Iraq’s complaint, or rather the Iraqi Shiite’s complaint is that the new port will threaten existing shipping lanes. If so, they have a logical complaint, but Kuwait has invited a group from Iraq to visit and supposedly showed them the plans will not affect the existing shipping lines that Iraq has complained about.

Iraq is in the midst of rebuilding its own ports. Alongside the rebuilding of the ports is the rebuilding of the nation that has been torn apart by war. Both are in need of some serious upgrades and disruptions to Iraqi improvements through delays of shipments could cause a strain.

Megaport

Although in many of the headlines you will see, the word megaport is being linked to the Kuwait project on Boubyan island, it is far from the most expensive project going on in the region. That title belongs to Qatar. The number one fastest growing economy last year and possibly this year, too, is wasting no time in trying to keep that title.

Qatar is in the process of building a new port in Doha. It’s planned that the new 20km2 port, to be constructed in Economic Zone 3, Al Wakra, will transform Doha’s shipping industry. It will include five general cargo terminals and berths, four container terminals and berths and a roll-on/roll-off berth, plus berthing for tug and pilot boats. This is only one of the three port projects that Qatar has in the works right now and this one hits the scales at a cost of $7billion.

Kuwait’s port on the island will be Mega. The plan calls for 16 berths to be designed and an initial four berths to be up and running by 2015, while the staged development could see as many as 60 berths in operation on the island.

At this time, everything is still full steam ahead, even after last month when Ketaeb Hezbollah, which has claimed deadly attacks on US troops in Iraq and is believed to be backed by Iran, warned a South Korean consortium to halt work on the Kuwaiti port project.

Whether this turns into something nasty or not, it’s hard to say. One thing for sure is that the region is really picking up and all this port development means there’s big demand for more.

Image: SolarNavigator

Source: ConstructionWeekOnline, CargoNewsAsia, DredgingToday




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