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Issue 08, 2008 (01 August)
 Services Sector

Impact of Hangzhou Bay Bridge on Ningbo's Logistics Sector

The Hangzhou Bay Bridge officially opened to traffic on 1 May 2008. An analysis of the present condition of the major ports in the Yangtze River Delta region and the characteristics of the regional economy and industries shows that the opening of the Hangzhou Bay Bridge will bring about opportunities and challenges to Ningbo port's logistics sector in the following ways.

Opportunities in six areas:

  1. The change in traffic network layout has rendered it possible for Ningbo port to tap into the northern bank of the Yangtze as a source of goods.
  2. The cluster effect of the ports will provide Ningbo with new opportunities in strengthening its edge on the growth of bulk and general cargo transport, and in competing for container transport business on the northern bank through the provision of quality logistics services for different categories of goods.
  3. The competitiveness of Ningbo's logistics sector in certain niche services will be strengthened and the cluster effect will be expanded.
  4. The hinterland of Ningbo port becomes larger, providing a new arena for competition.
  5. As Ningbo's industrial structure is undergoing gradual adjustment, the capability of and possibility for the city to concentrate its niche industries on the northern bank of the Yangtze will be increased.
  6. With the rising position of Ningbo as a transportation and logistics centre, shipping and logistics enterprises will probably readjust their strategic positioning in the port, develop new shipping routes and upgrade their presence there.

Challenges in five areas:

  1. The change in traffic network layout will lure local sources of goods to try the Shanghai route.
  2. Shanghai's edge in container transport is more apparent than that of Ningbo given the cluster effect of ports.
  3. As a result of the realignment of the boundaries of hinterlands, a significant portion of the prime hinterland previously enjoyed by Ningbo alone will have to be shared by others as well.
  4. The highly sophisticated business hub of the northern bank centred at Shanghai will lure away related industries from Ningbo, leading to the relocation of a large number of corporate headquarters.
  5. The opening of the bridge will trigger greater competition among neighbouring areas, thus exerting more pressure on the logistics development of Ningbo port.

Under these new circumstances, Ningbo should endeavour to achieve the "four alignments", namely, concept alignment, information alignment, structure alignment and talent alignment. It is imperative to accelerate the building of a complete transportation system with the port as its centre and supported by various modes of transport such as roads, railways, inland waterways and air links so as to enhance Ningbo's overall logistics capability. There is also a need in opening up the deep-water coastline at Chuanshan, Daxie and Meishan, thereby optimising the positioning of the ports, strengthening their cargo canvassing system, expanding their services and raising their throughput capacity.

Moreover, Ningbo should keep improving its time-efficient cargo-transport thoroughfares and city-wide delivery road system. The model of "consolidated logistics centre, specialised logistics centre, delivery centre/urban and rural express delivery system" centred at Cixi should be adopted to satisfy the needs of the industrial centres in Hangzhou Bay New Area in supplying raw materials and products to the city. To safeguard the development of modern logistics, a public information platform on logistics services should be established and perfected. Logistics networks for goods, processing industry, and business and commercial circulation should be interconnected to enhance the service efficiency and operational quality of the logistics industry. Logistics enterprises should be encouraged to make full use of information technology, actively develop electronic commerce and conduct their business operations via the Internet. Measures should also be taken to facilitate the growth of modern logistics enterprises, actively develop specialised logistics services, increase the proportion of third-party logistics and lower the cost of logistics.