Battle to be major shipping centre in NE Asia hots up

Bohai Rim ports have been pooling cargo, vessels, routes and clients with the blessing of provincial goverments in their battle to become the shipping centre of Northeast Asia. Correspondent Susan Geng looks at the progress made by the contestants

Bohai Rim ports were the top performers in China in the first nine months of this year as competition heated up with each port striving to be recognised as Northeast Asia's international shipping centre.

New players have entered the battle besides the three key ports of Tianjin, Qingdao and Dalian. These are the coastal ports of Qinhuangdao, Tangshan and Huanghua in Hebei province; Yingkou and Jinzhou near Dalian; Rizhao and Yantai near Qingdao.

While Tianjin held third place in cargo volumes in the first nine months. Tangshan in Hebei province led the cargo growth with a 51 percent year-on-year increase, handling 126.5 million tonnes.

All Bohai Rim ports registered positive growth by September except Qinhuangdao, which saw a decline in throughput along with ports in East and South China.

Tianjin ranked third in cargo throughput last year with 356 million tonnes, followed by Qingdao with 300 million tonnes and Dalian 246 million tonnes.

The region's performance in container shipping, long considered a weak link compared to southern and eastern China ports, has improved. Four out of five coastal ports showed positive container growth in the first nine months with Yingkou leading with a 29 percent increase. Growth in container volumes was also registered by Qingdao, Tianjin and Dalian.

Last year, Qingdao Port led northern China with 10 million TEUs, ranking fifth in the country while Tianjin ended the year with 8.5 million TEUs and Dalian with 4.53 million TEUs.

"The Bohai Rim's port battle to become known as Northeast Asia' top shipping centre has helped to lift their status and efficiency as port groups,'' said Professor Liu Bin, director of the World Economic Research Institute at Dalian Maritime University.

In August, Hebei's provincial capital Shijiaz-huang established the Hebei Port Group, comprising Qinhuangdao, Tangshan, Huanghua and Cangzhou ports, in its drive to be the top shipping centre. A month later, Tianjin drummed up support for itself with the release of impressive expansions plans. And last month, Dalian port announced it would list its shares in Shanghai and has given the green light for the building of four container berths at Dayao Bay, including exclusive mineral ore and crude oil berths. The same month, Qingdao released plans to "build another Qingdao Port" at Dongjiakou with 112 designed berths, including 400,000-dwt terminals for mineral ore.

Provincial governments have jumped into the fray providing financial and other support to ports in their provinces as they vie for the hub business that comes with being a shipping centre.

The Hebei group has been put under direct management of the provincial State Assets Commission while Tianjin's plans were publicised by the Binhai New Area administration. The Dalian administration was drawing other Northeast China cities into its pool while the Shandong provincial authorities have drawn up a port strategy under which Qingdao will become the main port, Yantai and Rizhao branch ports and Weihai a feeder port.

"Such direct government involvement could maximise local interest in the ports, and iron out obstacles in infrastructure and fund-raising,'' said Liu.

He dispelled industry worries of redundant construction and a price war. "Only consolidation through market competition can move the ports on to the world stage," he said.

Beijing has been encouraging provincial administrations to compete and tap their potential while following overall regulations, Liu said. "The glory of becoming a global shipping centre will go the most capable and efficient group of ports,'' he said.

Price wars are cruel but beneficial for the market and help improve port efficiency, said Liu. "Such competition is inevitable and necessary in

the transitory period during the growing-up period," he said.

Liu also saw an advantage in port cooperation, "which puts all sides in the same boat and pools resources in cargo sources, fleet, routes and clients and lets ports find their own particular advantages''.

But capital cooperation is by far the best option," he said. Following this is Dalian, which has swapped shares with Jinzhou Port and is expected to buy into nearby berths at Changxing Island, Lushun District, Changhai County and Zhuanghe and reach a reasonable arrangement with clear division of load. The Dayao Bay Bonded Zone, which came into operation in June, has become a special Customs service area, offering a 20-hour cargo clearing service compared to 70 hours previously. Its shipping exchange offers a one-stop service and one-network trade.

Tianjin, however, has attracted the most attention with its ambitious blueprint for becoming the international shipping centre of northern China by 2015. The blueprint said the centre would serve northern China and Asia's northeast, west, and central areas. Tianjin's gross cargo volume will reach 550 million tonnes by that time and container throughput 17 million TEUs.

The Binhai New Area has regional advantages, said Tianjin Port Group president Yu Rumin. The area is the outlet for northern manufacturing bases in Tianjin and Beijing, and now has spread its wings not only to the hinterland but also to central and western Asia, such as Mongolia and Kazakhstan.

As the transport hub of northern China, "Binhai has integrated various modes of transport such as railways, expressways, highways, oil pipes and aviation, which makes transport costs reasonable," Yu said.

The expansion of container routes will be the focus of Tianjin in coming years, integrating ocean liners, Bohai-rim feeder routes and internal trade routes. The routes will be supported by rail-sea lines to the hinterland as far as Xinjiang and Ningxia autonomous regions.

In a bid to accomodate larger vessels, Tianjin initially dredged channels to allow transit of 100,000-tonne vessels, then dug deeper to accommodate 250,000-tonne vessels and expects to handle 300,000 tonne vessels by 2015.

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