EXTRANS GLOBAL - Weekly Logistics Operation Update - Week 24

📌Weekly Logistics Highlights:

 Hong Kong, China

🔹Three new logistics centres to come online in Hong Kong until 2028

A JLL report revealed that a cluster of new logistics centres near the airport is set to come on stream in Hong Kong between 2025 and 2028, providing at least 642,000 sq ft of GFA. The HKIA Transit Mail Centre, developed by the Hong Kong Airport Authority, will be completed in 2025. Hong Kong Post’s Air Mail Centre Redevelopment will follow in 2027, with the UPS’ and Airport Authority’s joint project to be finished in 2028.

 Shenzhen, China

🔹China’s fast fashion, globally popular shopping apps prove boon to Shenzhen’s e-commerce sector

Buoyed by China's rapidly growing cross-border e-commerce, the southern manufacturing hub and port city of Shenzhen is showing signs of overtaking Shanghai as the nation's leader in foreign trade for the first time since 2015.Customs data shows that the value of Shenzhen's total imports and exports in the first four months of 2024 hit 1.41 trillion yuan (US$194 billion) - up 31.8 per cent from the same period last year and surpassing Shanghai's 1.39 trillion yuan, which saw little change.On the back of the surging popularity of Chinese online-shopping apps around the world, China's cross-border e-commerce has recently been a bright spot in the country's economic growth. Various levels of government have been rolling out various support policies, ranging from warehousing to customs-clearance facilitation. That said, analysts have cautioned that potential trade friction could weigh on the sector.

 Guangzhou, China

🔹Shein (Guangzhou) Chinese cross-border e-commerce platforms helping factories go global

Founded in Guangzhou, Guangdong province, and known for its low prices and large selection of fashionable clothing and accessories, Shein is ratcheting up resources to help Chinese manufacturers and brands expand their presence in overseas markets, and give a strong boost to the transformation of traditional industries by making use of its digital and flexible supply chains.The company announced plans to extend its outreach to industrial belts in 500 cities in China in September. It hopes to facilitate the digital upgrade of more industrial chains, thereby helping them achieve on-demand supply in terms of production. Shein has covered more than 300 industrial belts across the nation since 2021.For sellers who are good at designing and producing products, but have no overseas sales and operation experience, Shein said it will provide one-stop services including commodity operations, warehousing, logistics, customer service and after-sales, to help sellers make forays offshore.In addition, Shein is accelerating steps to build a supply chain project in Guangzhou covering operations, warehousing, stocking, order-picking, distribution, logistics and delivery. The project is expected to create 100,000 jobs and provide support for goods sold overseas.

 Shanghai, China

🔹Kolkata port-Shanghai direct cargo service begins

Syama Prasad Mookerjee Port, Kolkata (SMPK), on Monday, announced the launch of direct container vessel service from Shanghai, China.The second vessel in this pioneering loop service, SITC Tianjin, is scheduled to call at Haldia Dock Complex from China, around June 12.Raman emphasised that the port aims to enhance efficiency through direct services, resulting in significant logistics cost savings for its customers.The service is operated by J M Baxi Ports and Logistics. The port rotation for this service will be Port Klang-Haldia Dock Complex-Yangon Port-Port Klang/Shanghai, creating a seamless connection between the Far East ports, including China, Japan, and Kolkata.

 Tianjin, China

🔹Tianjin, Shijiazhuang, and 18 other cities selected as the first batch of modern commercial circulation system pilot cities in China

On June 11, it was announced that the Ministry of Commerce has released the review results of the 2024 modern commercial circulation system pilot cities. It is reported that the 20 cities initially planned to be supported are Tianjin, Shijiazhuang, Dalian, Harbin, Shanghai, Hangzhou, Ningbo, Hefei, Fuzhou, Xiamen, Nanchang, Jinan, Qingdao, Zhengzhou, Wuhan, Guangzhou, Shenzhen, Chengdu, Xi'an, and Yinchuan. The central government will provide a fixed subsidy to these pilot cities.As previously reported, in April this year, the Ministry of Finance and the Ministry of Commerce jointly issued a notice on supporting the construction of modern commercial circulation system pilot cities, prioritizing cities with a good work foundation, strong driving force, and great potential for improvement as pilot cities. The pilot work is planned to be implemented in three batches from 2024 to 2026, with a construction period of three years.

 Qingdao, China

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 Vietnam

🔹Vietnam exporters struggle with rising shipping rates

High sea freight rates are causing a headache for exporters in Vietnam as they have to recalculate costs and even accept losses to keep customers.Data from Phaata, an international logistics exchange, showed that freight rates from Ho Chi Minh City to the U.S. are increasing sharply. Meanwhile, Drewry's world container index (WCI) increased 12% to $4,716 per 40-foot container in the week from May 30 to June 6, marking a surge of 181% over the same period last year.Vietnam's main exports to the E.U. and U.S., such as textiles, footwear, wooden furniture, and electronics, will be most affected. However, many businesses in Vietnam are delivering goods in the form of free on board (FOB) so the impact is not so great.

 South Korea

🔹South Korea E-commerce Logistics Market Size Predicted to Generate Huge Revenues in the Future

Air Premia, which entered the acquisition of Asiana Airlines' cargo division, selected Meritz Securities as the main investor instead of MBK Partners.Three low-cost airlines (LCCs) participated in the sale of Asiana's cargo division, including Eastar Jet, Air Premia and Air Incheon. The candidates are said to have written down the acquisition price of around 500 billion won each.The sale of Asiana's cargo unit was originally planned to select a preferred bidder in late May, but has yet to be announced.The sale of Asiana's cargo division due to monopoly issues following the merger of Korean Air and Asiana is due to the European Commission (EC), which has the authority to approve the merger, demanding additional data be submitted.

 America

🔹Modern Logistics targets Latin American and US air cargo markets

Modern Logistics is planning to execute a two-stage strategy to enter the Latin American and US air cargo markets.The initial phase will expand Modern’s service to Colombia, Ecuador, Chile, Argentina, and Uruguay. This will take place in the third quarter of this year, according to the company’s chief executive Cristiano Koga.The Brazilian integrated logistics company’s second phase will then target Mexico and the US within six to twelve months.These expansion plans are being supported by Modern Logistics’ acquisition of two 737-800 Boeing Converted Freighters (BCFs).Modern Logistics acquired its first 737-800BCF in October last year, which marked the first 737-800 ever within Brazil’s logistics industry.The São Paulo-based company took delivery of its second 737-800BCF in March.The two aircraft are expected to help Modern Logistics increase market share internationally, plus establish a facility in Miami.

 Bangladesh

🔹Saudi-operated terminal launches operations at Bangladesh’s largest port

Saudi developer Red Sea Gateway Terminal commenced operations at the Patenga Container Terminal in Chittagong Port, marking the first time a foreign company has operated a Bangladeshi port.The Chittagong Port site, the busiest container port in the Bay of Bengal, handled about 3.2 million 20-feet equivalent units in the 2021 fiscal year and serves as the main gateway for Bangladesh’s ocean cargo.

 Myanmar

🔹Myanmar's economy in crisis as civil strife disrupts trade and livelihoods

Myanmar, once a thriving emerging economy, is struggling to regain momentum as the country’s civil war increasingly disrupts trade and livelihoods.World Bank economists estimate the country's economy grew at a 1% annual pace in the year that ended in March, more slowly than earlier expected, according to a report issued Wednesday. They expect a similar rate of growth for this fiscal year.“The economic outlook remains very weak, implying little respite for Myanmar’s households over the near to medium term,” the report says. “The business environment will continue to be constrained by conflict, trade and logistics disruptions, macroeconomic volatility, regulatory uncertainty, and power outages.”

🔹According to the Myanmar Ministry of Transportation and Communication, it is planned to upgrade seven domestic airports during the 2024-25 fiscal year.

The seven domestic airports that will be upgraded are as follows: Mawlamyine, Thandwe, Putao, Tachileik, Hanthawaddy, Myeik, and Kawthaung airports. The runway and fencing work of these airports are scheduled to be carried out. The upgraded runways are expected to be extended to a length of 9,000 feet and a width of 150 feet.

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