China: 3 Non-coastal Cities Rising as Major Logistics Hubs

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As space is decreasing in coastal cities which serve as manufacturing and export hubs, three non-coastal cities in China are rising to the task.

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          These non-coastal cities are becoming bridges that connect transportation between China and Europe or Russia while at the same time are growing as the country’s major domestic transportation hubs.  All three are equipped with premium warehouses as well as essential logistics infrastructure and therefore have the potential to become major hubs in the not-too-distant future.

1. Zhengzhou

          The capital of Henan Province, Zhengzhou has since 2010 been the city where Foxconn – the manufacturer and exporter of iPhone – is headquartered.  It is also where China’s first Economic Zone was established.  It was designed to be located near the airport so as to push up the number of passengers as well as the volume of freight, the greatest increase in China.  The target was to increase international airlines to 40 by 2020 as against 29 in 2016.  Weekly rail freight transport service from Zhengzhou to Germany commenced in 2017 with the city’s rail freight volume accounting for 30% of China’s total rail freight volume transported to Europe.  Major types of cargo include electronic goods, industrial robots and auto parts.

2. Chengdu

          The capital of Sichuan Province, Chengdu has been offering more rail and air transport services.  Last May, both DHL and Rail Cargo Group launched new transport services from Vienna to China via Chengdu to support transportation of high value freight.  The German airline Lufthansa, on its part, launched the new route in the same month including the weekly transport services between Frankfurt and Chengdu, thereby linking up with China’s multimodal transportation.

3. Xi’an

          Situated in Central China, Xi’an launched the Logistic Park in 2008 which featured a Free Trade Zone along with rail services to Western Europe.  The city is also where a cluster of factories, e-Commerce companies and logistics entrepreneurs are located.       Thus, there is a growing trend towards an investment increase in warehouse business in the city.

          Despite the fact that land prices and wages make non-coastal towns more interesting than port cities, one should take into account related issues such as the lack of skilled workers in the area, although the same may be true in some coastal areas as well, shortage of full-range infrastructure as well as insufficient technology in certain areas.          

          With over 700,000 logistics service providers in China, the volume of domestic freight transportation by road, however, remains small due to a number of legal restrictions in the country.  At any rate, these non-coastal cities have the potential to become logistics hubs that connect with other small- and medium-size cities.  In fact, they are attracting warehouse operators in anticipation of the growing e-Commerce in China.  It is predicted that more and more warehouses will be launched in the near future.

 

Compiled by BLOG.SCGLogistics

Reference and picture credits supplychaindive.com, pixabay.com

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