While everyone knows about the Chinese Government’s ‘One Belt, One Road’ (OBOR) initiative, its Yangtze River Economic Belt Strategy (YREBS) has not been so widely publicised, especially overseas. Yet it is hugely significant, as the Yangtze River is one of the most important manufacturing, logistics and freight transport corridors in China. It accounts for more than 40% of the country’s GDP.

With cargo volumes between China’s interior, its ports and overseas markets growing strongly, and the Yangtze River a main artery for this traffic, it is vital that the corridor’s administration/management, transport infrastructure (road, rail and waterway), cargo handling/processing facilities and distribution systems are modernised and expanded. 

There is also a need to reduce logistics costs in China, which, at 18-20% of GDP, are substantially higher than the 8-12% averages associated for North America and a large part of Europe. 

In 2016, an estimated 2.3 Bt of cargo was shipped along the river, up about 6% on the previous year. While the majority of this cargo was domestic in nature, data published by the Yangtze River Navigational Affairs Administration revealed that river ports handled more than 330 Mt of import and export cargo. 

Key locations 

The YREBS will result in large multidimensional cargo hubs being developed at key cities in the lower, middle and upper reaches of the river, including at: 

• Chongqing – located in the upper reaches, and the main river gateway for the industrial city of Chengdu, which is about 310 km to the northwest. The Upper Yangtze River Shipping Centre will act as a collection point for river
  ports, such as Jiangjin Luohuang, Fuling Longtou and Wanzhou Xintian. It will be designed with a handling capacity for at least 200 Mtpa of cargo. 
• Yichang – development of value-added logistics centres and multimodal services.
• Wuhan- the port city’s role as hub for the middle reaches of the river will be reinforced. New rail lines, marshalling yards, intermodal container transfer facilities, marine wharves and highways will be built by 2020. At that time, it is envisaged that the Wuhan Yangtze River Shipping Centre will have the capacity to handle 100 Mtpa of cargo, including 5M TEU of container traffic. ?
• Changsha, including the cities of Zhuzhou Xiangtan – also located in the middle reaches of the river. Fully integrated trimodal transport hub will be developed, with specialist storage/distribution facilities available for businesses engaged in the perishable products, automotive and aviation sectors.

Navigation

The past year saw a number of navigational improvement programmes undertaken along the river, with minimum water depths in many sections of the waterway increased. This gave shipowners/operators the opportunity to load
more cargo on their vessels, and to navigate parts of the river much faster, thus reducing their voyage costs.

The commissioning in September 2016 of a special ship-lift at the Three Gorges Dam in the central reaches of the river has been particularly significant, as it allows ships to be lifted up from the river to the lake behind the dam, a 
height of 370ft, in just under an hour. This compares with an average transit time of four hours to navigate the set of adjacent staircase locks that were built as part of the original project. 

Since all craft that trade to/from Chongqing, the main port in the upper reaches of the Yangtze River, have to  pass through the Three Gorges Dam, the ship-lift offers carriers faster and more reliable service options and enhanced
levels of operational flexibility.
A key element of the Yangtze economic belt initiative is its strict environmental protection and water resources management criteria. The authorities are committed to ensuring that, by 2020, a low-carbon integrated transport system
is in place, more than 75% of its catchment water meets Grade III standard, and trees cover 43% of the area. 

It should be noted that the Chinese Government has six classifications for its water quality, ranging from Level I, which is suitable for drinking after minimal treatment, to Level VI, which is severely contaminated.

The country’s rail network is also being expanded and improved. With more manufacturing taking place in the interior, and the government demanding more sustainable and environmentally friendly ways of moving cargo, rail has
to play a much bigger role in China’s freight transport sector. 

Currently, only 2-3% of containers handled at ports in China arrive/leave by rail, which is tiny compared with the 20- 40% moved this way at many of the larger gateway ports in Europe and the US. 

In an effort to change this situation, new rail tracks are being laid, dedicated passenger lines created so that more freight can be carried on existing lines, and reforms introduced. The private sector is also being encouraged to invest  in the sector.

Rail hubs

One of the most ambitious schemes, and  one that should result in much larger numbers of containers being moved by rail, is the creation of a network of large intermodal container rail terminals at key cities across China. 

The project, which is being managed by China United International Rail Containers Co. Ltd (CUIRC), is well under way, with facilities already operational in Kunming, Chongqing, Chengdu, Zhengzhou, Wuhan, Xi’an, Dalian, Qingdao, Ningbo and Tianjin. In total, 18 terminals will be built, but with a further phase of development likely thereafter. 

Last year saw global terminal operator PSA International (PSAI) buy Hong Kong-based Luck Glory International Ltd, which had a 15.3% stake in CUIRC, and enter the country’s rail sector. The group, which manages/operates 11  marine terminals in China, sees the move as being complementary to its ports business, while allowing it to offer a wider range of services to its customers. China Railway Container Transport Corp Ltd, NWS Holdings Ltd, China International Marine Containers (Group) Ltd and Deutsche Bahn Mobility Logistics AG are also working with CUIRC on the project.

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This complete item is approximately 1000 words in length, and appeared in the February 2017 issue of WorldCargo News, on page 23. To access this issue download the PDF here.