daily - cargo may 2016_再入稿.indd

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KAIJI PRESS CO.,LTD. Copyright©2016KAIJIPRESS.Allrightsreserved. MAY 2016 No.009 Special Feature ─‘ Logitics in China Air P2 Ocean P12 Rail P14 The Chinese huge market reaching a turning point  I t has been a whopping 20 years since its first train was operated. China-Europe Transcontinental Railroads (Eurasian Land Bridge), a railroad connecting China and Europe throughout Eurasian Continent, finally came out of a long tunnel, accelerated with a following wind by the "New Normal" China's "One Belt, One Road" policy. Cross- border block trains departed one after another from the points in China on the railroad hugely extending a total of more than 10,000 km. Can the rails on "the Silk Road in the 21st Century" become a basis for the next-generation logistics? (* This special feature is excerpt from Daily CARGO's special supplement of 'China Logistics Special' which was issued in October 2015.) President & CEO of Cargolux Airlines Transform from No.1 in Luxemburg to 'truly global Carrier' Dirk Reich 4 Reinforcing nodal point functions, opening new routes Boosting value as logistics base Narita International Airport 6 Comprehensive handling services at Narita and Centrair International Air Cargo Terminal 8 Chubu region - factory in the center of Japan Centrair transforming into export base for flowers Chubu Centrair International Airport 10 NOTABLE CONTENTS Logistics "New Normal"

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Page 1: Daily - CARGO MAY 2016_再入稿.indd

KAIJI PRESS CO.,LTD. Copyright�©�2016�KAIJI�PRESS.�All�rights�reserved.MAY 2016 No.009

Special Feature─‘Logitics in China’ Air P2 Ocean P12 Rail P14

The Chinese huge market reaching a turning point

 It has been a whopping 20 years since its first train was operated. China-Europe Transcontinental Railroads (Eurasian Land Bridge), a railroad connecting China and Europe throughout Eurasian Continent, finally

came out of a long tunnel, accelerated with a following wind by the "New Normal" China's "One Belt, One Road" policy. Cross-border block trains departed one after another from the points in

China on the railroad hugely extending a total of more than 10,000 km. Can the rails on "the Silk Road in the 21st Century" become a basis for the next-generation logistics?(*This special feature is excerpt from Daily CARGO's special supplement of 'China Logistics Special' which was issued in October 2015.)

President & CEO of Cargolux Airlines Transform from No.1 in Luxemburg to 'truly global Carrier'

Dirk Reich

4

Reinforcing nodal point functions, opening new routesBoosting value as logistics base

Narita International Airport

6

Comprehensive handling services at Narita and Centrair

International Air Cargo Terminal

8

Chubu region - factory in the center of JapanCentrair transforming into export base for flowers

Chubu Centrair International Airport

10

●NOTABLE CONTENTS ●

Logistics "New Normal"

Page 2: Daily - CARGO MAY 2016_再入稿.indd

2� Daily�-�CARGO�MAY�2016 Daily�-�CARGO�MAY�2016� 3

In�late�June,�2015,�Xinhua�News�Agency�reported�that�a�plan�to�put�three�major�air-cargo�organizations�is�under�way�in�order�to�create�a�Chinese�air-cargo�

company,�which�will�be�the�largest�in�Asia�under�the�policy�of�CAAC.�This�plan�targets�two�companies�and�one�department,�namely�Air�China�Cargo,�a�

In�May�2015,�Japanese�and�Chinese�aviation�authorities�held�an�unofficial�consultations�and�reached�an�agreement�to�allow�airlines�to�newly�enter�and/or�increase�flight�frequencies�on�Haneda/Narita-China�routes.�This�is�an�attempt�to�tap�into�a�framework�of�airline�relationships�agreed�in�August�2012�corresponding�to�the�China's�situations�where�coordination�and�preparation�have�been�completed�in�the�country.

Airlines�newly�planned�to�enter�and/or�increase�the�number�of�flights�from�Haneda�to�Beijing,�Shanghai,�Pudong,�and�Guangzhou�within�day-time�slots�at�Haneda�Airport,�starting�from�the�winter�2015�schedule�(from�October�25,�2015�to�March�26,�2016).�This�allows�both�Japanese�and�Chinese�airlines�to�operate�two�round-trip�flights�a�day�on�each�route�of�Haneda-Beijing,�Haneda-Shanghai�Pudong,�and�Haneda-Guangzhou.�It�means�that�China�routes�including�existing�in-service�slots�that�can�be�operated�within�daytime�slots�at�Haneda�Airport�are�four�flights�a�day�to�Beijing�each�for�Japan�and�China,�two�each�to�Shanghai�Hongqiao,�two�each�to�Shanghai/Pudong,�and�two�each�to�Guangzhou.

In�response�to�this�situation,�major�Japanese�and�mainland�Chinese�airlines�announced�to�start�operations�on�or�increase�the�number�of�passenger�flights�on�Haneda-China�route.�All�Nippon�Airways�(ANA)�planned�to�operate�seven�flights�a�week�with�B767�aircraft�on�each�route�between�Haneda�and�Shanghai/Pudong,�Guangzhou,�and�Beijing.�Japan�Airlines�(JAL)�will�also�start�to�operate�seven�services�a�week�with�B767�aircraft�on�the�same�routes.

It�was�of�particular�note�that�mainland�Chinese�airlines�planned�to�change�their�departure�airport�from�Narita�to�Haneda�for�existing�China�routes.�Air�China�(CCA)�will�do�so�for�a�part�of�in-service�flights�to�Beijing,�starting�from�the�winter�2015�schedule.�The�company�planned�to�double�the�number�of�Haneda-Beijing�flights�into�four�a�day�as�well�as�started�new�operations�on�Narita-Chengdu�route�with�four�flights�a�day.�China�Eastern�Airlines�(CES)�started�to�operate�two�Haneda-Shanghai�Pudong�daily�flights�with�A330�aircraft�while�continuing�operations�on�existing�Haneda-Shanghai�Hongqiao�route.�In�doing�so,�the�number�of�flights�operated�by�CES�will�increase�to�24�a�

subsidiary�of�CCA,�China�Cargo�Airlines�(CKK),�a�subsidiary�of�CES,�and�the�Cargo�Department�of�CSN.�If�this�plan�is�realized,�one�of�Asia's�largest�air-cargo�company�will�be�created.

According�to�a�document�released�by�the�International�Air�Transport�Association�(IATA),�the�cargo�transportation�volume�on�the�weight�basis�in�2014�(total�of�domestic�and�international�cargoes)�handled�at�CSN,�CCA/CAO,�and�CES�were�about�1.33�million�tons�(rank�6th�in�the�world),�1.17�million�tons�(9th),�and�1.16�million�tons�(11th)�respectively,�totaling�around�3.66�million�tons.�This�figure�shows�that�it�will�be�a�company�with�volume�on�the�weight�basis�that�is�just�behind�UPS,�the�world's�No.2�company�that�handles�4.24�million�tons.

With�regard�to�the�cargo�transportation�volume�on�a�ton-kilometer�basis,�CCA/

CAO,�CSN,�and�CES�handle�4,910�million,�4,736�million,�and�4,500�million�ton-kilometers�respectively,�totaling�14.146�billion�ton-kilometers.�This�scale�will�be�second�only�to�FedEx�that�handles�16.02�billion�ton-kilometers.

Based�on�such�simple�estimations,�if�the�two�firms�and�one�department�are�merged�and�a�new�airline�is�created,�an�impact�on�the�international�air�cargo�market�will�be�too�large�to�be�ignored.�However,�many�mainland�Chinese�airlines�point�out�that�topics�like�this�came�up�several�times�in�the�past�and�they�lack�feasibility.�Furthermore,�CSN's�cargo�department�is�not�its�subsidiary�in�the�first�place.�Since�fundamental�reorganization�will�be�required�in�this�scheme,�it�is�not�likely�for�the�organizations�to�be�merged�in�the�next�few�years.

Responding�to�a�strong�demand�of�inbound�passengers�to�Japan,�the�number�of�flights�between�provincial�cities�in�Japan�and�China�have�also�increased.�As�shown�in�the�number�of�weekly�non-stop�flights�from�Japan�to�major�mainland�Chinese�cities�operated�by�major�airlines�as�of�the�summer�2015�schedule,�two�or�more�airlines�operate�regular�flights�from�Japan�to�Chinese�cities,�including�Shenyang,�Hangzhou,�and�Wuhan.�The�number�of�operating�airports�in�provincial�cities�including�those�that�are�not�listed�on�the�chart�have�increased�in�the�form�of�indirect�flights�via�several�cities,�extension�of�existing�routes�and/or�stopover�points.�For�example,�CES�extended�Kansai-Qingdao�route�into�Kansai-Qingdao-Xian�route�in�December�2014.�Although�the�number�of�flights�and�operating�airports�have�been�on�the�increase,�most�of�aircraft�used�for�provincial�routes�are�narrow-body�planes.�So�it�is�often�difficult�to�constantly�ensure�enough�space�for�general�cargoes�on�such�aircraft�departing�from�Japan�because�of�the�huge�volume�of�passenger�baggage�due�to�so-called�"shopping�spree."�As�a�result,�there�is�no�major�change�in�a�pattern�where�main�routes�for�air�cargo�transportations�from�Japan�to�mainland�China�are�those�to�Shanghai,�Beijing�and�other�cities�operated�with�wide-body�passenger�planes�and�those�operated�with�cargo�planes.

Among�non-stop�passenger/cargo�flights�from�Japan�to�China,�those�on�Shanghai�route�(total�of�those�to�Pudong�and�Hongqiao)�are�most�frequently�operated�with�395�flights�a�week�(52�for�cargo�and�343�for�passenger).�This�is�followed�by�122�flights�a�week�to�Beijing�(all�are�passenger),�69�to�Dalian�(five�for�cargo�and�64�for�passenger),�and�47�to�Qingdao�(12�for�cargo�and�35�for�passenger).

Looking�at�cargo�flights�only,�52�flights�are�operated�weekly�on�Shanghai�route,�likewise�five�on�Dalian�route,�12�on�Qingdao�route,�seven�on�Guangzhou�route,�six�on�Tianjin�route,�and�four�on�Amoy�route.�As�to�Shanghai�routes,�the�destination�of�all�flights�is�Pudong�Airport.

There�is�also�no�major�change�in�the�volume�of�cargos�handled�at�airports�in�China�over�the�past�few�years�and�the�runaway�leader�is�Shanghai�Pudong�Airport�that�handles�3.18�million�tons�a�year,�up�8.6�%�from�the�previous�year�as�shown�in�the�full-year�results�in�2014.�It�is�followed�by�Beijing�Airport�with�1.85�million�tons�a�year,�down�0.2�%�from�the�previous�year,�and�Guangzhou�Airport�with�1.45�million�tons�a�year,�up�11.0�%�from�the�previous�year.�

Looking�at�the�ranking�of�the�volume�of�cargos�handled�by�international�airports�in�the�world�,�Shanghai�Pudong�Airport,�Beijing�Airport,�and�Guangzhou�Airport�come�in�third,�14th�and�18th�respectively.

Increase in flights within daytime slots at Haneda Airport

Plan to merge three major cargo airlines

Flights are still concentrated on Shanghai and Beijing routes

Initiatives to acquire demands in cross-border e-commerce are shifting into high gear

Cross-border�e-commerce�logistics,�in�which�general�consumers�are�involved�as�a�cargo�owner,�is�booming�in�mainland�China.�One�of�the�reasons�is�that�the�country's�strategic�polices,�such�as�the�adoption�of�import�tax�on�general�consumers�are�being�carried�out�nationwide,�and�mainland�Chinese�airlines�and�other�players�began�to�put�extra�focus�on�this�field.

In�2014,�the�CES�Group�integrated�its�cargo�businesses�within�the�entire�group�including�CKK�and�established�Eastern�Air�Logistics�(EAL).�At�the�same�time,�the�group�installed�a�new�operating�unit�called�"EAL�Express."�EAL�Express�has�reinforced�its�main�internet�mail�order/express�businesses�and�recently�opened�an�online�e-commerce�mall�(EMEMALL�-�drop�shipments)�for�general�consumers�in�the�website�of�EAL.

In�cooperation�with�customs�office�of�Guangzhou�Airport,�affiliated�customs�agents,�overseas�land�transportation�companies�in�Australia�and�other�countries,�CSN�also�has�developed�its�unique�air�transportation�program�relating�to�cross-border�e-commerce.�After�a�test�conducted�from�2014,�the�company�launched�the�program�on�a�full�scale,�starting�with�flights�from�the�U.S.�and�Australia�to�China�in�January�2015.�Currently,�CSN�is�pursuing�it�on�flights�from�Japan�and�other�eight�countries�in�Oceania,�Europe�and�the�U.S.�to�China.

There�are�indirect�initiatives�to�address�

demands�for�e-commerce�trade.�CAO�has�established�its�"B757�F�Business�Department"�in�the�first�half�of�2015�and�currently�provides�China�Postal�Airlines�with�its�own�4�B757-200SF�aircraft�as�charter�planes.�These�planes�are�used�for�transportation�businesses�such�as�regular/express�mail�services�operated�on�short-distance�flights�departing�from�China.�The�B757�F�Business�Department�has�been�organized�by�strengthening�operational�aspects�such�as�management�and�operation�of�the�aircraft�as�well�as�relationship�with�officials��engaging�in�postal�affairs.�This�is�accounted�for�by�increased�demands�for�regular/express�mail�services�due�to�cross-border�e-commerce�trade.

Airlines�have�a�common�point�in�their�strategies�on�cross-border�e-commerce�business.�That�is�to�focus�on�the�business�with�imports�by�China�targeting�consumers�in�mainland�China.�This�is�because�they�expect�further�growth�of�the�market.�The�U.S.-based�research�company,�eMarketer�conducted�a�survey�of�major�22�countries�and�released�its�results�at�the�end�of�last�year.�According�to�the�survey,�it�is�estimated�that�sales�on�the�world�e-commerce�market�will�be�$1,592�billion�(about�Y189�trillion,�at�a�rate�of�119�yen�per�dollar)�in�2015�alone,�up�20%�from�the�previous�year�and�that�e-commerce�will�account�for�6.7%�of�the�world�retail�market.�Currently,�two�largest�e-commerce�markets�are�China�and�the�U.S.�However,�it�is�

expected�that�Chinese�market�will�leave�the�U.S.�far�behind,�expand�its�market�share,�and�become�$1�trillion�(Y119�trillion)-scale�market�that�accounts�for�40%�of�the�e-commerce�trade�in�the�world�by�2018.

Japanese�products�exported�to�China�for�cross-border�e-commerce�trade�has�been�increased�in�terms�of�monetary�amounts�as�well.�According�to�"Infrastructure�Development�Concerning�a�Shift�of�Our�Economic�Society�to�an�Information-�and�Service-oriented�Society�(Market�Survey�on�E-commerce�Trade)"�released�by�Japan's�Ministry�of�Economy,�Trade�and�Industry�at�the�end�of�May,�2015,�it�is�estimated�that�the�amount�of�purchases�from�Japanese�business�operators�by�Chinese�consumers�will�reach�Y606.4�billion�in�2014,�up�55.4%�from�the�previous�year.

All�these�products�are�not�necessarily�

transported�by�air�as�a�general�cargo.�In�cargo�transportations�for�cross-border�e-commerce�trade�between�Japan�and�China,�there�are�other�players�such�as�regular/express�mail�services�and�marine�transportation�compete�each�other.�Also,�it�is�of�note�that�customs�procedures�are�cumbersome�due�to�a�broad�range�of�items�exported�from�Japan.�How�do�airlines�find�a�way�to�increase�demands�for�general�cargoes�in�collaboration�with�customs�agents�and�forwarders?�It�is�a�big�matter�that�we�have�to�pay�close�attention�to�how�airlines�push�into�the�market�of�cross-boundary�e-commerce�trade�from�Japan�to�China�that�is�expected�further�growth.�

week�including�those�operated�by�its�subsidiary,�Shanghai�Airlines�(CSH).�China�Southern�Airlines�(CSN)�planned�to�terminate�one�daily�flight�on�Guangzhou-Narita�route�operated�with�A330�aircraft�in�winter�and�started�to�operate�two�flights�a�day�on�Guangzhou-Haneda�route�instead.�

A330�aircraft�was�used�for�one�of�the�flights.

Whether�keeping�operations�on�Narita�routes�or�moving�main�flights�to�Haneda,�a�future�challenge�for�airlines�is�to�utilize�a�gateway�at�Haneda�as�much�as�possible.

Logistics in CHINA Logistics in CHINA

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matter�that�we�have�to�pay�close�attention�

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■ Data of main domestic airports in China in 2014 (created from the documents of Civil Aviation Administration of China)

Airport Cargo Aircraft departure and arrival Passenger

RankVolume of

cargo handled (Ton)

Change (%) Rank Number of

movementChange

(%) Rank Number of passenger

Change (%)

Shanghai, Pudong 1 3,181,654.1 8.6 3 402,105 2.5 3 51,687,894 9.5

Beijing 2 1,848,251.5 0.2 1 581,952 4.5 1 86,128,313 2.9

Guangzhou 3 1,454,043.8 11.0 2 412,210 8.3 2 54,780,346 4.4

Shenzhen 4 963,871.2 5.5 4 286,346 3.9 6 36,272,701 12.4

Chengdu 5 545,011.2 8.7 6 270,054 7.8 5 37,675,232 12.6

Shanghai, Hongqiao 6 432,176.4 -0.7 7 253,325 11.2 4 37,971,135 6.7

Hangzhou 7 398,557.6 8.3 11 213,268 5.9 10 25,525,862 15.4

Zhengzhou 8 370,420.7 44.9 15 147,696 11.0 17 15,805,443 20.3

Kunming 9 316,672.4 7.8 5 270,529 8.8 7 32,230,883 8.6

Amoy 10 306,385.0 2.3 12 174,315 11.9 11 20,863,786 5.6

Nanjing 11 304,324.8 19.0 16 144,278 4.5 16 16,283,816 8.5

Chongqing 12 302,335.8 7.9 9 238,085 10.5 8 29,264,363 15.8

Tianjin 13 233,358.6 8.8 21 114,557 6.1 24 12,073,041 20.3

Qingdao 14 204,419.4 9.8 18 142,452 9.8 14 16,411,789 13.1

Xi’an 15 186,412.6 4.2 8 245,971 4.7 9 29,260,755 12.3

Urumqi 16 162,711.3 6.2 19 142,266 6.9 15 16,311,140 6.2

Wuhan 17 143,029.6 10.5 13 157,596 15.5 13 17,277,104 10.0

Shenyang 18 138,318.4 1.7 26 97,172 12.5 21 12,800,272 5.7

Dalian 19 133,490.0 0.9 20 115,284 12.1 20 13,551,223 -3.8

Changsha 20 125,037.8 6.3 14 152,359 7.0 12 18,020,501 12.6

Fuzhou 21 121,383.4 10.1 27 86,944 5.3 26 9,353,414 4.8

Haikou 22 121,131.4 8.3 23 105,861 21.1 19 13,853,859 16.1

Harbin 23 106,559.8 15.4 25 97,746 15.6 23 12,239,026 19.3

Wuxi 24 96,120.4 9.7 52 35,781 13.7 42 4,180,038 16.4

Nanning 25 90,353.2 3.9 29 80,496 12.7 25 9,412,246 15.4

Guiyang 26 82,063.4 6.0 22 113,424 4.2 22 12,525,537 19.6

Jinan 27 80,503.1 10.9 28 83,551 3.5 27 8,708,950 7.0

Ningbo 28 78,024.5 21.4 42 53,897 -4.4 35 6,359,139 16.5

Sanya 29 75,645.8 20.2 24 102,074 6.9 18 14,942,356 16.1

Changchun 30 73,560.9 8.1 36 60,751 2.1 29 7,421,726 10.2

Total(50Airport) 13,560,841.0 7.8 7,933,110 8.4 831,533,051 10.2

Warehouse of Eastern Air Logistics (EAL) in West Cargo Handling Area of Shanghai Pudong International Airport

Shanghai Pudong International Airport that is in impregnable position in terms of handling of the largest cargo volume in China

Progress toward exploitation of a new market Increasing in imports for e-commerce trade

Responding to a strong demand of inbound passengers to Japan, the number of flights operated on Japan-China routes have

been on the increase in the entire market. It was agreed that airlines can newly enter and/or increase flight frequency on China routes within daytime slots at Haneda Airport (Tokyo international Airport), starting from the winter 2015 schedule and many of airlines announced their plan to do so on Haneda-China routes. On the other hand, China is promoting nationwide initiatives to address import demands for cross-border e-commerce trade, responding to an increase in demand for the domestic consumer e-commerce market. Here is a report on the trend of major Japanese and mainland Chinese airlines that have a Japan-mainland China network as well as other information, including overview of the Chinese aviation market.

(Akino Mochizuki, Masayuki Hasumi )

� Daily�-�CARGO�MAY�2016

Air Cargo

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4� Daily�-�CARGO�MAY�2016 Daily�-�CARGO�MAY�2016� 5

Dual-Hub Strategy: Group's new hub, Zhengzhou

�Placing�the�second�hub�in�the�

center�of�China�and�to�expand�the�investment�into�the�dual-hub�strategy�is�based�on�the�shareholder-ship�with�the�shareholder�agreement�and�also�the�part�of�plan�to�develop�aviation�business�in�Henan�in�the�province�of�China.�

Two�years�ago,�35%�of�Cargolux�share�was�bought�by�HNCA,�the�Henan�Province�based�company�which�is�investing�on�civil�aviation.�Before�that,�Qatar�Airways�used�to�be�our�35%�shareholder,�but�decided�to�step�out�of�Cargolux,�and�then�the�Luxemburg�government,�which�was�majority�shareholder�of�the�group�next�to�Luxair�before�Qatar�Airways�had�acquired�the�stake,�looked�for�new�investor.

Meanwhile,�Chinese�government�is�interested�in�providing�jobs�and�consumption�goods�to�the�people�of�central�plains.�Way�back�when�everybody�goes�to�the�coast�areas�like�Shanghai,�the�government�wanted�to�stop�this�migrating�move�to�the�coastal�areas,�conversely�they�wanted�to�draw�jobs�to�the�big�cities�in�the�hinterland.�

'One�Road,�One�Belt'�strategy�by�the�country's�government�also�led�our�project.�China�has�decided�to�invest�$40�billion�to�link�China�and�Europe�through�

former�so�called�Silk�Road.�For�the�Silk�Road�development,�the�goal�is�to�keep�people�in�mainland�China.�The�key�interest�of�the�Chinese�government�is�to�develop�those�cities.�

Now�being�35%�Chinese,�our�goal�is�to�help�our�shareholders�as�much�as�possible,�and�it�is�relatively�easy�because�China�is�the�biggest�growing�air�freight�market�in�the�world�at�least�in�the�growth�rate.�I�think�the�timing�is�still�very�good�even�though�the�growth�rate�of�today�is�lowering,�the�growth�rate�is�as�big�as�the�one�in�10�years�ago�in�absolute�jobs.�And�if�you�look�at�the�mainland�China,�there�is�so�much�development�going�on�compared�to�Europe.�

New opportunities in Intra-Asia

�Cargolux�China�will�start�with�

three�747�Freighters�and�expand�to�five�in�the�coming�years.������The�main�commercial�routes�for�the�company�are�on�predominantly�transpacific�and�intra-Asia.�It's�not�flying�to�Europe.�The�intra-Asia�network�to/from�Zhengzhou�hub�will�be�linked�to�the�existing�our�group's�network�to�Europe,�United�States�and�other�destinations.�We�are�looking�up�the�best�ways�how�we�can�link�them,�from�left�to�right,�from�east�to�west,�or�maybe�to�South�America.�We�can�explain�about�the�much�more�details�in�June.�

Our�plan�is�to�link�China�to�all�

the�other�regions�and�countries.�For�example,�Japan.�We�already�have�flights�between�China�and�Japan.�Today�we�connect�Luxemburg,�Zhengzhou,�Komatsu,�Anchorage�and�Chicago.�The�returning�flight�goes�non-stop�because�we�have�no�traffic�right�yet.�If�we�get�the�traffic�right�from�United�States�to�Japan�to�China,�it�will�be�perfect.�Once�we�set�up�a�local�company,�we�will�hopefully�get�these�traffic�rights,�so�we�can�fly�out�of�China,�Korea,�Japan�or�Dacca,�to�all�those�locations.�

The�Zhengzhou�hub�will�link�to�many�Asian�countries.�We�are�also�able�to�link�it�to�other�Asian�freighter�hubs�which�connect�intra-Asian�regions�by�pure�freighters.�It�should�be�very�interesting�for�those�who�need�freighters�in�the�region�also.�We�are�so�much�confident�that�it�is�the�right�market�to�invest.

�To be the truly global carrier

�We�have�expanded�the�strategy�

from�being�No.1�in�Europe�to�becoming�one�of�the�few�truly�global�carriers.�Today�we�are�looking�into�other�routes�which�may�be�best�for�worldwide�services.�Wherever�the�customers,�which�are�exclusively�forwarders,�want�us�to�fly,�we�try�to�find�solutions�and�the�traffic�rights.�Governments�are�becoming�more�and�more�flexible.�Meanwhile�the�number�of�pure�freighter�companies�is�becoming�less�and�less,�so�the�forwarders�have�interests�in�the�'infrastructure'.�We�are�looking�at�it�systematically�whether�there�are�the�still�opportunities�to�grow.

We�think�it�needs�strong�partners�and�strong�geographical�advantages�to�be�truly�a�global�carrier.�Without�partners�and�bigger�home�country,�it�is�very�hard�to�survive.�So,�now�we�are�very�happy�to�have�a�strong�government�in�Luxemburg,�which�is�supporting�us,�and�related�shareholders�and�then�Chinese�economies�support�us�to�develop�this�dual�hub�project.

Network-wise,�the�main�development�will�be�done�

between�Europe�and�China.�Today�we�transport�around�100,000�tons�between�the�two,�but�we�will�grow�it�up�to�around�253,000�tons�annually.�It's�a�low�cost�but�a�mass�market.�Our�idea�is�to�increase�the�flights�to�around�four�flights�a�day�between�China�and�Europe,�which�connect�predominantly�Luxemburg.�

�Returning on Indian route

�As�a�part�of�our�strategy�to�be�a�

truly�global�carrier,�we�thought�we�need�freighter�service�to�India.�It's�very�challenging,�but�it's�very�important�when�thinking�of�the�whole�network.�On�Indian�route,�we�resumed�the�freighter�operation�in�line�with�a�Joint�Venture�agreement�with�Oman�Air.�The�company�is�small�but�a�partner�with�big�ambition�and�very�complimentary�partner.�Still�challenging�enough�but�we�both�had�interest�to�develop�in�India,�so�jointly�we�started�to�develop�the�market.�

Some�eight�years�ago,�we�have�withdrawn�the�operations�on�Indian�route.�The�problem�was�a�lot�of�flow�goes�to�the�U.S.,�meanwhile�less�from�India�to�Europe.�That�was�also�the�real�problem�that�the�rate�to�the�U.S.�from�India�was�low.�Ten�years�ago�India�was�IT�development�country,�without�any�logistic�draw,�a�lot�of�forwarders�neglected�India�and�said,�"IT�programming�has�no�physical�flows."�Everybody�went�only�to�China,�forwarders,�they�all�decided�to�left�India�10-15�years�ago.�

But�only�in�last�five�years,�physical�flows�notably�developed�more�and�more.�There�are�a�lot�of�people�in�India�but�relatively�little�production�goods�for�export�and�import.�China�growth�has�come�down�and�people�look�for�a�new�

market.�India�invests�more�into�exports�in�the�intra-Asian�market.�And�the�flows�are�very�increased�and�strong�now.�

�Charter solution matches coming demands

�We�will�invest�more�into�our�

commercial�charter�business�and�relief�goods�transport�activities.�In�the�future�air�freight�market,�we�would�see�many�kinds�of�demands�and�have�more�peaks�a�lot�as�you've�seen�already.�E-commerce�shipping�demand�is�growing�more�than�ever.�Charter�business�has�enormous�growth�possibility.�It�can�be�production�cargo,�it�can�be�humanitarian�relief�one,�or�it�can�be�special�e-commerce�peak�on�November�11th.�Everybody�has�to�buy�something.�So�making�our�business�more�flexibility�will�be�one�of�the�big�focuses.

Up�to�five�aircrafts�could�be�utilized�for�charter�business.�Currently�they�are�used�on�regular�flights�and�the�number�is�really�depends�on�the�season�so�I�would�say�five�in�the�plan�at�this�point.�Thinking�it�realistically�it�could�be�possible�to�operate�more�charter�flights�during�only�certain�period�of�the�year.�We�put�them�in�regular�network�for�the�rest�of�the�year.�We�will�increase�flight�flexibility�on�every�route�in�line�with�cargo�flows.

We�intend�to�grow�numbers�of�fleets�from�26�to�35�in�next�four�years.�Next�step�is�to�acquire�the�14th�747-8�Freighter.�And�we�then�pick�the�routes�for�the�two�different�versions�of�freighters;�747-8s�are�for�bigger�and�long-haul�routes�and�the�747-400s�are�for�smaller�or�single�routes.�We�will�support�747�as�long�as�they�are�there�and�the�fuel�price�stays�where�it�is�today�or�in�that�range.�

Dirk Reich President�&�CEO�of�Cargolux�Airlines�

Transform from No.1 in Luxemburg to 'truly global Carrier'

Cargolux Airlines (CLX) is now extremely accelerating to expand the group's business scope. The 14th Boeing 747-8 Freighter will join the fleet in the near term. The new Chinese cargo airline 'Cargolux China', based in Zhengzhou, Henan Province in China, will be launched as one of the Airline groups in coming years. The establishment of new airline is realized by the cooperation

with Henan Civil Aviation Development and Investment Co. (HNCA) which is 35% stakeholder of Cargolux Airlines and with other local entities. Dirk Reich, President & Chief Executive Officer, Cargolux Airlines, in an exclusive interview with Daily-CARGO, explained about the strategic plan to develop Asian market utilizing the new Chinese cargo airline and with the partnership with Oman Air on the Indian route, and also about the future strategic plan in his mind. He stated that the company is aiming to be 'the truly global carrier.'

He stated as follows: (Interviewer: Akino Mochizuki )

Starting�his�carrier�in�Cargolux�Airlines�as�President�&�Chief�Executive�Officer�since�March�2014.�He�has�been�a�Member�of�the�Management�Board�and�Executive�Vice�President�at�Kuehne�&�Nagel�International�AG�before�that.�Prior�to�joining�Kuehne�&�Nagel�as�Senior�Vice�President�Corporate�Development,�Reich�held�various�positions�with�Lufthansa�

AG�and�VIAG�AG.�He�graduated�from�'Wissenschaftliche�Hochschule�für�Unternehmensführung'�Koblenz�(WHU),�Germany.

SpecialInterview

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Narita International Airport

6� Daily�-�CARGO�MAY�2016 Special�Issue��Daily�CARGO�English�Edition�2015� 2

NAA�formulated�its�new�mid-term�management�plan�dubbed�"Innovative�Narita�2018�-�Aiming�to�be�the�airport�of�the�world’s�highest�standards�-"�in�the�late�March�this�year.

Under�the�plan,�NAA�aims�to�maximize�the�competitive�edge�of�Narita�Airport�against�the�major�airports�in�Asia�that�are�advancing�wide-scale�airport�functional�expansion�projects,�as�well�as�to�engage�in�thorough�preparations�toward�the�safe�and�smooth�hosting�of�the�Tokyo�Olympic�and�Paralympic�Games�in�2020.�

As�its�targets,�NAA�aims�to�transform�Narita�Airport�into�"the�airport�of�the�world’s�highest�standards�to�drive�customer�acknowledgement"�and�pursue�to�"maintain�and�further�improve�Narita�Airport’s�position�as�the�top�level�international�hub�airport�in�Asia."

With�regard�to�the�reinforcement�of�its�airport�functions,�NAA�plans�to�expand�hourly�capacity�to�72�aircraft�movements�during�peak�periods�by�the�end�of�fiscal�2018�(currently�totals�68�flights)�through�reconfiguring�high-speed�exit�taxiways.�As�for�the�further�reinforcement�of�its�

�In�the�cargo�fields,�NAA�intends�to�boost�the�value�of�Narita�Airport�as�an�air�cargo�logistics�base�toward�the�expansion�of�its�cargo�network.�In�order�to�enhance�the�quality�of�cargo�handling�at�the�airport,�it�plans�to�improve�the�functions�of�its�constant�temperature�warehousing�facilities.�It�intends�to�support�the�modification/development�of�primary�infrastructures�when�tenant�companies�in�the�cargo�area�build�constant�temperature�warehouses.

Furthermore,�NAA�will�contribute�to�the�programs�that�aim�to�promote�the�export�of�agricultural,�forestry�and�fishery�products�through�its�involvement�in�the�"Narita�Wholesale�Market�Exports�Logistics�Center�Promotion�Council"�that�is�made�up�of�the�local�government�of�Narita�City,�the�producers/manufacturers,�distribution�companies�and�other�entities�in�the�region,�and�the�"Council�for�the�Export�of�

Agricultural�Products�form�the�Area�around�Narita�International�Airport"�that�is�made�up�of�the�nine�municipalities�surrounding�Narita�Airport.�In�addition,�NAA�will�hold�such�activities�as�Forklift�and�Pallet�Building�Competitions�in�order�to�boost�the�quality�of�cargo�handling�at�Narita�Airport.

Toward the 2020 Tokyo Olympic and Paralympic Games

The�target�number�of�destinations�served�by�the�end�of�fiscal�2018�is�130�foreign�cities�or�more�and�20�domestic�cities�or�more�(107�foreign�cities�and�17�domestic�cities�under�the�2016�summer�schedule).�Meanwhile,�Narita�Airport�aims�to�serve�43�million�passengers�(35.5�million�in�international�flights�and�7.5�million�in�domestic�flights)�in�fiscal�2018�(37.9�million�passengers�estimated�in�fiscal�2015,�

comprising�31�million�passengers�in�international�flights�and�6.9�million�passengers�in�domestic�flights),�and�handle�2.1�million�tons�of�air�cargo�(2�million�tons�estimated�in�fiscal�2015).

Now�with�the�2020�Tokyo�Olympic�and�Paralympic�Games�waiting�after�the�above�mid-term�plan,�Narita�Airport�will�play�a�key�role�as�Japan's�largest�international�airport.�

Formulating policies for boosting cargo handling quality

The�number�of�aircraft�movements�at�Narita�Airport�in�fiscal�2015�totaled�235,190 flights,�up�3.1%�from�the�previous�year�and�representing�the�highest�volume�since�the�airport�opened�in�1978.�International�aircraft�movements�at�the�airport�grew�3.4%�to��183,635 flights,�comprising�157,713 passenger�flights,�up�4.3%�and�23,800�cargo�flights,�down�1.9%�(on�par�with�the�previous�year).�The�number�of�passengers�surged�7.5%�to�37,941,435�people,�while�the�cargo�volume�shrank�4.6%�to�1,981,390�tons.�The�increase�in�inbound�passengers�and�the�reinforcement�of�the�LCC�network�propped�up�the�airport's�business�results�last�fiscal�year.�Terminal�3�that�was�opened�in�April�2015�has�also�been�boosting�a�steady�increase�in�terms�of�passengers�served.

Cargo�volume�at�Narita�Airport�suffered�from�decline�compared�to�the�previous�fiscal�year,�but�that�was�brought�about�by�the�negative�repercussions�from�the�urgent�

demand�following�the�stevedoring�delays�at�the�ports�in�the�U.S.�West�Coast�in�the�previous�year.�Total�cargo�volume�at�the�airport�suffered�from�a�small�drop,�but�transit�cargo�volume�a�slightly�increased.�One�of�the�strengths�of�Narita�Airport�is�its�function�as�a�nodal�point�between�Asia�and�North�America,�and�it�has�been�capitalizing�on�such�strength.

Meanwhile,�the�airport's�summer�schedule�(computed�based�on�the�two�weeks�from�April�3�to�April�16)�shows�4,514�total�aircraft�movements�(departures/arrivals),�124�destination�cities�served�by�flights�(in�128�routes),��to/from�the�airport�(comprising�107�foreign�cities�and�17�domestic�cities),�and�90�airline�companies��served�flying�in/out�of�the�airport.�NAA�projects�more�flights�in�the�future,�with�the�number�of�destination�cities�as�of�mid-October�expected�to�renew�the�all-time�highs�at�127�cities�overall,�comprising�110�foreign�cities�and�17�domestic�cities.

All-time high numbers of airline companies served etc.

Reinforcing nodal point functions, opening new routesBoosting value as logistics base

functions,�NAA�will�pursue�consultations�with�relevant�stakeholders�toward�the�realization�of�objectives�based�on�the�technical�options�such�as�"extension�of�the�existing�runway",�"construction�of�an�additional�runway"�and�"relaxation�of�night-time�flight�operation�restrictions,"�that�were�declared�at�the�Subcommittee�on�Tokyo�Metropolitan�Airports�Functional�Enhancement�for�Technical�Review�of�the�Japan�Ministry�of�Land,�Infrastructure,�Transport�and�Tourism�(MLIT).

In�the�reinforcement�of�its�aviation�network,�NAA�plans�to�exert�utmost�effort�into�the�further�enhancement�of�routes�in�Asia�where�there�has�been�remarkable�growth,�especially�in�the�inland�of�China�

and�Southeast�Asian�cities�currently�not�directly�served,�as�well�as�further�reinforce�its�function�as�a�nodal�point�that�links�Asia�and�North�America�by�enhancing�the�connecting�function�of�the�airport.�NAA�will�also�strive�to�open�new�routes�serving�destinations�in�Europe,�Africa,�Latin�America�and�other�regions.

For�instance,�NAA�will�urge�the�Japanese�government�to�further�promote�the�"Open�Skies"�agreement,�including�the�expansion�of�the�"Open�Skies"�policy�with�China,�and�advance�studies�on�a�strategic�fee�and�charge�system,�deepening�the�incentive�schemes,�in�order�to�keep�and�boost�its�aviation�network.

Formulating mid-term plan, expanding hourly aircraft movement capacity

6� Daily�-�CARGO�MAY�2016NARITA� Daily�-�CARGO�MAY�2016NARITA� Daily�-�CARGO�MAY�2016NARITA Narita International Airport

During the 2016 summer schedule, Narita International Airport (NRT), Japan's largest international airport, offers record-high numbers of total and international aircraft movements, destination served, and airline

companies served since it opened, indicating the further expansion of its network. Narita International Airport Corp. (NAA) has formulated its new mid-term management plan dubbed "Innovative Narita 2018 - Aiming to be the airport of the world’s highest standards -", with fiscal 2016 as its first year. Under the new plan, NAA intends to expand hourly aircraft movement capacity during peak periods, as well as boost the value of Narita Airport, Japan's largest air cargo trade port, as an air cargo logistics base toward the reinforcement of its cargo network.

Outline of Narita International Airport in 2015 (Jan.-Dec.)Opening date May 20, 1978

RunwaysA=4,000mB=2,500m

Aircraft Movements

232,182 (101.1%)International 180,984 (101.5%)

PAX Flight 154,532 (101.1%)Cargo Flights 24,146 (103.2%)Others 2,306 (109.2%)

Domestic 51,198 (99.8%)PAX Flights 49,658 (100.6%)Cargo Flights 975 (110.9%)Others 565 (53.7%)

Cargo<unit=ton>

2,035,968(99.6%)Loaded 960,847(102.4%)

Export 614,163(103.1%)Transit 346,684(101.1%)

Unloaded 1,075121(97.3%)Import 726,557(95.2%)Transit 348,564(102.1%)

Terminal Passengers

37,328,213 (104.9%)International 30,607,470 (103.2%)

Japanese 13,079,910(92.2%)Non-Japanese 12,499,430(123.3%)Transit 5,028,130(94.4%)

Domestic 6,720,743(113.1%)* ( ) shows the growth rate compared to 2014 (Jan.-Dec.)

Cargo Area

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Common Import Warehouse (IACT A Building, Narita International Airport)

8� Daily�-�CARGO�MAY�2016 Daily�-�CARGO�MAY�2016� 9

Handling services

 International Air Cargo Terminal Co., Ltd. (IACT) represents Japan as the independent airport warehouse operator as well as the ground handling service provider. In addition to the main business of import warehouse operation at Narita International Airport (NRT) and Haneda Airport (HND) for nearly 50 years, the company has

entered into new business of export warehouse operation, airport ramp handling, and passenger handling since 2010. The facility specialized for temperature-controlled container was established in 2012 while the main deck loader for ULD with maximum weight of 35t was introduced by IACT for the first time in Japan in 2013. The new warehouse system called New JTO (developed by IBS software) started in operation from March 2014. With the history for nearly a half century, IACT has contributed to the development of air cargo industry in Japan and will be moving on, responding to the trend of air cargo industry around the world.

IACT�has�proceeded�with�diversification�of�business�in�the�shift�of�business�environment.

In�September�2010,�the�company�acquired�Skyport�Service�Corporation�(SPS),�a�company�providing�warehouse�operation�and�ground�handling�at�Chubu�Centrair�International�Airport�(NGO),�by�purchasing�majority�stakes�previously�owned�by�Mitsubishi�Corporation.�By�this�acquisition,�

IACT�started�operation�at�NGO�and�entered�into�ramp�handling�business.

Business�domain�of�IACT�is�not�limited�inside�of�airports.�"IACT�Narita�Logistics�Center,"�which�is�located�within�a�few�minutes�from�NRT�by�car,�started�8�years�ago.�The�

Logistics center in vicinity of NRT

IACT�makes�efforts�to�gain�recognition�in�abroad.

For�example,�the�company�became�a�member�of�IGHC�(IATA�Ground�handling�Council)�and�also�takes�part�in�World�Cargo�Symposium�(WCS)�which�is�held�every�spring�around�in�the�world.�It�expands�the�area�of�business�outside�of�Japan�by�visiting�the�headquarters�of�customer�airlines.

�Also�in�January�2015,�IACT�joined�the�International�Forklift�and�Pallet�Building�Competition�hosted�by�Hong�Kong�Air�

Cargo�Terminals�Limited�(HACTL)�at�Hong�Kong�International�Airport�and�won�the�best�prize�in�“Overall”�&�"Pallet-Building"�sector.

World champion of grand handling

■ IACT USER AIRLINES (As of Apr., 2016)

AIRLINE IMPORT EXPORT GROUND HANDLING PASSENGER BY TRK

AF Air France ●

AZ Alitalia-Compagnia Aerea S.p.A ●

BA British Airways ● ●

CX Cathay Paci� c Cargo ● ●

DL Delta Air Lines ●

DM Asian Air ● ● ●

ET Ethiopian Airlines ● ●

FX Federal Express ● ●

GA Garuda Indonesla ● ●

HB Air Asia Atlantic ●

HY Uzbekistan Airways ●

HZ Aurora Airlines ● ● ●

IJ Spring Japan ● ●

KL KLM Royal Dutch Airlines ●

LD AHK Air Hong Kong Limited ●

LH Lufthansa Cargo AG ● ●

LX Swiss International Air Lines ● ●

LV Mega Maldives Air Lines ●

NX Air Macau ● ●

OS Austrian Airlines ● ●

OZ Asiana Airlines ●

PO Polar Air Cargo ● ● ●

QR Qatar Airways ● ●

SB Air Caledonie International ●

SK Scandinavian Airlines System ●

TK Turkish Airlines Inc. ● ● ●

TN Air Tahiti Nui ● ●

TW T’way Air ● ● ●

UL Srilankan Airlines Ltd. ● ● ● ●

Y8 Yanqtze River Express ● ●

ZE Eastar Jet ● ● ●

■ SPS USER AIRLINES (As of Apr., 2016)

AIRLINE IMPORT EXPORT GROUND HANDLING PASSENGER BY TRK

CX Cathay Paci� c Cargo ● ●

C8 Cargolux Italia S.p.A ● ● ●

GK Jetstar Japan ● ●

IT Tigerair Taiwan ● ● ● ●

JQ Jetstar Airways ● ●

KZ Nippon Cargo Airlines ● ● ●

LD AHK Air Hong Kong Limited ● ● ●

PO Polar Air Cargo ● ● ● ●

RU AirBridgeCargo Airines LLC ● ● ● ●

Y8 Yanqtze River Express ● ● ●

5J Cebu Paci� c Air ● ●

5X United Percel Service Company ● ●

7C Jeju Air ● ●

IACT�has�started�ground-handling�for�Spring�Airlines�Japan�and�Aurora�Airlines�on�July�and�August,�2014�respectively,�and�added�up�the�number�of�customer�carriers�to�28�that�IACT�conducts�the�service�operations�for.�Of�the�two�new�carriers,�Spring�Airlines�Japan,�a�low�cost�carrier�(LCC)�becoming�popular�in�Japan,�signed�an�agreement�with�IACT�to�receive�a�wide�range�of�services�including;�crew�transport,�loading/unloading�cargo,�taxiing�support,�lavatory�service,�water�service,�luggage�handling,�air�passenger�services�(accompanied�luggage,�check-in�counter,�information/guide�services,�air-ticket�booking/issuing).�IACT�shows�its�ability�to�the�fullest�as�a�comprehensive�ground-handling�service�provider.�

Skyport�Service�Corporation�(SPS,�led�by�president�Masanori�Ootake),�a�subsidiary�wholly�owned�by�

IACT�and�situated�at�the�No.�3�International�Cargo�Warehouse�within�the�Centrair�premise,�provides�services�including;�cargo�handling�in�the�warehouse,�ramp-handling�such�as�loading/unloading�cargo�and�accompanied�baggage�on�passenger/cargo�flights,�check-in�counter�service�for�air�travelers,�flight�maintenance�and�flight�support�services.

SPS�has�been�providing�ramp�handling�services�for�15�flights/week�of�Polar�Air�Cargo�(PAC)�and�five�flights/week�of�Air�Hong�Kong�(AEK)�on�a�

regular�basis�as�well�as�warehouse�cargo-handling�services�for�nine�airlines�,�including�cargo�transferred�(drayaged)�by�truck�from�other�airports.�It�also�handles�cargo�charter�flight�service�as�needed.

�As�to�operations�of�warehouses,�SPS�is�shoring�up�its�cold�storage�service.�It�conventionally�utilizes�20-ft�containers�

capable�of�setting�temperature�at�5�degrees-C�(Celsius)�and�storage�

spaces�maintaining�at�15-25�degrees-C�as�temperature-controlled�storage.�On�top�of�these,�SPS�has�prepared�trucks�capable�of�setting�temperature�at�5�degrees-C�to�meet�the�increasing�handling�volume�for�live�flowers�and�fresh/perishable�foods.�

Total ground-handling services at Centrair

Skyport Service Corporation (SPS)Closeup

site�area�of�facility�is�12,000�sqm.�The�total�floor�area�in�the�2-story�building�is�10,700�sqm,�half�of�which�is�air�conditioned�for�the�storage�of�temperature�sensitive�cargo.�The�same�building�is�used�for�warehouse�as�well�as�office�rooms.

Comprehensive handling services at Narita and CentrairInternational Air Cargo Terminal

8� Daily�-�CARGO�MAY�2016IACT� Daily�-�CARGO�MAY�2016IACT� Daily�-�CARGO�MAY�2016IACTIACT ▶▶▶FOCUS ON

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10� Daily�-�CARGO�MAY�2016

The�manufactured�goods�and�other�shipments�of�Aichi�Prefecture,�where�Centrair�is�situated,�totaled�Y42,001.8�billion�in�2013,�representing�a�4.9%�year-on-year�jump.�Its�market�share�in�Japan�was�14.4%,�a�0.5-point�increase�from�2012.�The�prefecture�has�been�in�first�place�for�37�years�since�1977.�In�the�Chubu�region,�the�automobile�related�industry,�including�Toyota�Motor�Corporation,�has�been�integrated.

Furthermore,�in�recent�years,�the�aircraft�industry�has�also�been�growing,�including�

Driven by the automotive and aviation industries C

hubu Centrair International Airport (Centrair) is located in the central part of Japan. It's the busiest manufacturing area in Japan, where global automotive and aircraft industries are

concentrated. Manufacturers of parts for Boeing 787 aircrafts also do business around the airport, so Centrair functions as the takeoff/landing base of Large Cargo Freighters (LCFs=Dreamlifters) that haul parts and components of 787-type aircrafts. Centrair is not limited to the export of machines, however, as it is also promoting various initiatives that ought to turn it into the base airport for hauling flowers and ornamental plants that were produced in Japan against the backdrop of Aichi Prefecture, where Centrair is located, being the leader in the country in terms of flower production output value.

The�Japan�Plant�Export�Council�(JPEC,�which�is�headquartered�in�Toyoake,�Aichi�Prefecture),�which�is�committed�to�boosting�the�export�volume�of�flowers�and�ornamental�plants�produced�in�Japan,�was�established�in�May�2012�with�Toyoake�Kaki�Co.�(headquartered�in�Toyoake,�Aichi�Prefecture),�a�wholesaler�of�flowers�and�ornamental�plants,�and�other�entities�at�the�core.�It�brings�foreign�buyers�into�the�country�and�holds�various�activities�for�them,�including�excursions�and�tours.�

Toyoake�Kaki�switched�to�the�local�Centrair,�from�other�airports,�as�its�airport�of�choice�for�flower�exports�in�2014.

JPEC�aims�to�optimize�and�boost�the�efficiency�of�the�domestic�transport�of�flowers�and�ornamental�plants�in�the�country�by�concentrating�and�consolidating�in�Centrair�the�flowers�and�ornamental�plants�to�be�exported�from�Japan,�and�then�export�various�flowers�and�ornamental�plants�from�Centrair�at�the�fastest�speed�possible.�

Centrair - for the fastest export of Japanese flowers

Suppliers�of�Boeing�787�components,�including�Mitsubishi�Heavy�Industries,�Kawasaki�Heavy�Industries,�and�Fuji�Heavy�Industries,�have�gathered�in�the�Chubu�region.�Fuselage�structure�components�for�the�787�model�are�unloaded�at�one�of�Centrair's�wharfs�by�sea�from�factories,�and�they�are�mounted�on�a�dedicated�cargo�plane,�the�Dream�Lifter,�which�transports�the�787’s�fuselage�structures.�The�cargo�are�transferred�with�a�short�lead�time�to�each�of�Boeing's�finished�product�factories�that�are�located�in�North�America.

The�production�system�of�this�aircraft�will�be�increased�in�phases.�Currently,�10�aircrafts�are�being�produced�monthly,�with�

plans�to�produce�12�units�per�month�in2016�and�14�units�in�2019.�To�handle�this,�

the�"Dreamlifter�Operations�Center"�(DOC),�the�component�storage�of�this�aircraft�model,�went�into�full-fledged�operation�on�the�Centrair�premises,�in�March�2014.

Further,�the�Central�Japan�International�Airport�Co.�(CJIAC)�and�Boeing�entered�into�an�agreement�in�October�2015�calling�for�the�establishment�of�the�Dreamlifter�Operations�Center�2�(DOC2)�in�a�bid�to�reinforce�the�handling�of�components�for�the�787-model�aircraft.�The�new�facility,�which�will�have�a�building�area�of�approximately�2,000-sqm,�is�scheduled�to�be�completed�in�summer�of�2016.

Corresponding to large-sized special cargo transport

Centrair�is�also�used�for�the�emergency�transport�of�extremely�heavy�cargoes�other�than�Dreamlifters�because�the�airport�island�is�equipped�with�a�full-fledged�cargo�berth�for�coastal�vessels.�Cargoes�which�cannot�be�carried�by�land,�including�

artificial�satellites,�factory�equipment,�turbine�generators�and�marine�screw�propellers,�can�be�exported�and�imported�via�Centrair�by�sea-and-air�transport�using�the�same�berth�as�a�coastal�vessel.

Adapting to the transport of heavy cargoes, too

In�addition,�the�Chubu�region�is�the�center�of�the�development�and�production�of�Japan's�first�jet�airliner�"MRJ"�(Mitsubishi�Regional�Jet).�The�first�aircraft�delivery�is�scheduled�for�the�second�quarter�of�2017.

Mitsubishi�Heavy�Industries�opened�a�

logistics�center�to�control�the�manufacturing�of�components�in�Aichi�prefecture,�and�established�a�real-time�network�to�connect�domestic�manufacturing�bases�and�outside�suppliers,�towards�the�mass�production�of�its�MRJs.

Centrair�has�been�promoting�"Fly�Centrair�Cargo",�which�is�an�initiative�with�local�industries�that�aims�to�utilize�the�airport�for�hauling�cargoes,�since�the�opening�of�the�airport.�The�"NGO�Promotion�Plan"�is�a�measure�that�targets�shippers,�and�58�routes�for�16�companies�were�offered�in�the�fiscal�2015.

These�policies�will�continue�to�be�

pushed,�including�the�preferential�use�of�Centrair�flights,�further�use�of�freighters,�and�switching�routes�from�other�airports,�in�fiscal�2016�(April,�2016�to�March,�2017).

"Fly�Centrair�Cargo"�had�308�partner�companies,�including�238�shippers,�37�forwarder�companies�and�33�trucking�operators�as�of�April�this�year.

Centrair�has�a�single�runway�that�measures�3,500�meters�in�length�and�60�meters�in�breadth.�It�is�an�offshore�airport�so�24-hour�operation�is�possible.�Since�it�is�located�in�the�center�of�Honshu,�it�offers�excellent�surface�accessibility�to�the�Tokyo�metropolitan�area�to�the�east�and�the�Kansai�region�to�the�west.�Thus,�the�location�is�perfect�for�transporting�cargoes�to�various�destinations�in�Japan.

The�international�cargo�handling�volume�of�Centrair�in�fiscal�2015�(from�April�2015�to�March�2016)�was�161,152�tons,�an�8%�decrease�from�the�previous�year�because�of�a�reaction�of�last�year's�emergency�transportation�for�North�America..�

Of�that�volume,�loading�volume�totaled�83,800�

tons,�representing�a�10%�fallrise�from�the�previous�year,�and�unloading�volume�stood�at�77,352�tons,�a�6%�decrease.�Based�on�the�flying�schedule�of�international�flights�(as�of�April�2016�),�there�were�351�passenger�flights�to/from�40�cities�on�a�weekly�basis.

There�were�28�weekly�regular�cargo�flights�consisting�of�five�Air�Hong�Kong�(AHK)�flights�(Hong�Kong�service),�two�Asiana�Airlines�(AFR)�flights�(Seoul/Incheon�service),�15�Polar�Air�Cargo�Worldwide�(PAC)�flights�(Cincinnati,�Shanghai,�Seoul/Incheon-Taipei/Taoyuan�services),�and�six�All�Nippon�Airways�(ANA)�flights�(Okinawa�service).�DHL�Express,�which�has�invested�in�the�PAC,�uses�Centrair�as�a�base�for�cargo�transports�to�North�America.�

In�addition,�the�first�produced�787�aircraft�(the�ZA001�model)�was�donated�by�the�Boeing�Company�to�Centrair�in�July�2015.�The�aircraft�was�actively�used�as�a�787�test�aircraft.�The�Chubu�region�accounts�for�35%�of�the�production�of�the�787's�fuselage�structures;�thus,�Centrair,�deeply�familiar�with�the�787�model�and�being�the�

base�of�the�Dream�Lifter,�was�chosen�to�be�an�aircraft�recipient.�The�aircraft�will�be�exhibited�in�Centrair.

Further,�the�CJIAC�will�build�a�commercial�complex�that�will�be�used�for�showcasing�indoors�the�787�test�aircraft�(the�ZA001�model).�It�is�slated�to�open�in�the�second�half�of�fiscal�2017.

Japan's first jet airliner "MRJ"

Shippers switching to Centrair

Regular cargo flights, too

Commercial complex for 787 aircraft display

Chubu region - factory in the center of JapanCentrair transforming into export base for � owers

the�production�of�components�for�Boeing's�787�aircraft.�Five�prefectures�in�the�Chubu�region�produce�about�50%�of�Japan's�aircraft�component�production�value,�and�more�than�70%�of�its�fuselage�components.

In�December�2011,�"Asia's�number�one�aerospace�industry�cluster�formation�zone",�which�has�been�promoted�by�the�Chubu�region,�was�selected�as�the�International�Strategic�Comprehensive�Special�Zone.

10� Daily�-�CARGO�MAY�2016CENTRAIR� Daily�-�CARGO�MAY�2016CENTRAIR� Daily�-�CARGO�MAY�2016CENTRAIR Chubu Centrair International Airport

Chubu Centrair International Airport

▶▶▶FOCUS ON

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12� Daily�-�CARGO�MAY�2016 Daily�-�CARGO�MAY�2016� 13

Shanghai�International�Port�(Group)�=�SIPG,�which�manages�and�operates�Shanghai�port,�has�presented�the�measure�to�acquire�shares�of�Jinjiang�Shipping�whose�staple�services�are�in�Shanghai-Japan�route�in�spring�2015.�This�was�the�deal�guided�by�Shanghai�Municipal�State-owned�Assets�Supervision�and�Administration�Commission�to�acquire�79.1954%�of�the�shares�to�become�the�largest�shareholder.

Meanwhile,�HASCO,�wholly�owned�by�SIPG,�also�manages�Shanghai-Japan�routes.�"While�Jinjiang�Shipping�is�based�on�solo�operations,�HASCO�has�a�tie-up�with�SITC�Container�Lines.�What�will�become�of�the�two�companies'�relationship?"��Parties�concerned�were�paying�attention.�In�the�summer�2015,�Huang�Xin,�chairman�and�general�manager�of�Jinjiang�Shipping,�revealed�of�the�merger�with�HASCO.�HASCO's�service�network�is�to�be�added�with�Jinjiang�as�a�mother�body.�"After�this�merger,�we�will�continue�to�provide�China/Japan-Southeast�Asia�services�keeping�high�

quality�of�the�Jinjiang�brand,"�Huang�said.�"Maintaining�both�of�the�Jinjiang�and�HASCO�services�as�much�as�possible,�we�will�think�out�measures�in�order�not�to�affect�our�shippers.�Even�though�it�will�take�some�time�because�the�two�companies�have�differences�in�rates'�setting�and�policies�on�service�to�some�extent,�we�will�offer�good�service�with�which�our�customers�can�get�satisfaction."

Huang,�originally�serving�as�the�vice�president�of�SIPG,�assumed�the�seat�of�chairman�and�general�manager�of�Jinjiang�in�summer�2014.�Therefore,�not�a�few�officials�concerned�surmises,�"A�string�of�SIPG's�events�from�the�buyout�of�Jinjiang�to�the�merger�with�HASCO�might�be�a�predetermined�course."�After�the�merger,�SIPG�will�become�a�major�operator�serving�between�Japan�and�China�with�handling�capacity�of�700,000�TEUs�(loaded).

Hereafter,�it�is�the�relationship�between�SITC�Container�Lines�and�Jinjiang�Shipping�that�will�draw�attention.�SITC�and�HASCO�commenced�a�tie-up�operation�in�May�2014�on�the�Taicang/Shanghai-Japan�

In�early�August�2015,�a�news�shocked�China.�A�string�of�news�headlines�of�local�media�reported�like;�"COSCO�and�China�Shipping�mulling�over�a�merger?"�

At�the�end�of�2015,�two�groups�announced�about�their�merger�formally.�And�‘China�COSCO�Shipping�Corporation�

Limited’�was�established�in�2016�as�joint�company�of�two�corporations.�Container�ship�business�is�concentrated�in�COSCO�side.�Southeast�Asia�container�route�of�COSCO�and�China�Shipping�was�integrated�on�May�15,�2016.�Route�of�Africa�and�South�America�eastern�coast�is�integrated�on�June�15.�Domestic�route�is�on�June�27,�North�American�route�is�on�June�27,�North�American�route�is�on�July�18,�and�Europe�route�(Atlantic�service�is�included.)�is�on�July�25.�Finishing�Middle�East,�South�America�west�coast,�Australia/New�Zealand,�Japan/Korea/Taiwan�routes�and�etc.�on�August�1,�the�integration�of�two�corporations�is�completed.

Two�executives�selected�for�

the�new�company,�specifically�Xu�Lirong,�the�former��chairman�of�China�Shipping,�(originally�from�COSCO),�is�named�chairman�and�party�secretary�of�the�new�company,�while�Wan�Min,�executive�vice�president�of�COSCO�and�former�president�of�COSCO�Container�Lines,�acts�as�president�and�deputy�party�secretary�of�the�new�company.

The�two�conglomerates�had�already�established�a�joint�venture�company,�‘China�Ore�Shipping’�in�Singapore,�a�dedicated�shipping�operator�to�transport�iron�ore�for�Vale,�a�Brazilian�resources�major.�They�also�concluded�an�agreement�in�February�2014�to�make�a�comprehensive�and�strategic�partnership,�which�indicates�a�close�relationship.

In�China,�large-scale�mergers�have�been�taking�place�in�recent�years�for�the�purposes�of�reinforcement�of�business�infrastructure�and�reconstruction�of�the�state-owned�companies.�Rumors�of�merger�have�been�spread�out�including;�China�North�Locomotive�and�Rolling�Stock�and�China�South�Locomotive�and�Rolling�Stock,�China�Power�Investment�and�China�National�Nuclear�Power�Technology,�and�state-owned�shipbuilders�as�well.�In�the�field�of�maritime�shipping�sector,�the�two�state-owned�logistics�companies�of�Sinotrans�Group,�a�major�logistics�

How will relationship between Jinjiang and SITC be?

COSCO and China Shipping implementing merger

route.�The�merger�of�Jinjiang�and�HASCO�caused�a�stir�in�the�industry,�as�an�official�concerned�blurted�out,�"How�would�SITC�do�with�it?"�As�Xue�Mingyuan,�president�of�SITC�Container�Lines,�emphasizes,�"The�partnership�with�HASCO�was�a�success".�It�is�a�focal�point�whether�such�a�relationship�will�continue.

Huang�of�Jinjiang�opined,�"In�general,�a�tie-up�leads�to�cost-cutting.�But�it�may�also�result�in�deterioration�of�the�service�quality�we�are�attaching�importance�to.�It�is�highly�likely�for�us�to�make�a�partnership�with�SITC�if�it�generates�benefits�in�terms�of�stabilization�of�market�and�service�quality."�On�the�other�hand,�Yang�Xianxiang,�CEO�of�SITC�said,�"There�is�a�possibility�of�tying�up�with�Jinjiang�if�Jinjiang�and�HASCO�merged."

In�spring�2014,�on�the�Shanghai�routes,�three�state-owned�companies�of�Shanghai�Pan-Asia�Shipping�of�the�COSCO�group,�Shanghai�Puhai�Shipping�of�the�China�Shipping�group,�and�Sinotrans�Container�Lines�exchanged�their�slots�to�a�large�extent,�while�Centrans�International�Marine�Shipping�(CCL),�Goto�Shipping�International�and�T.S.�Lines�expanded�their�collaborative�alliance.�They�were�joined�by�the�alliance�of�SITC/HASCO,�and�Jinjiang�that�kept�operating�on�its�own,�to�form�the�four�major�groups�on�the�Shanghai-Japan�routes.�If�the�amalgamation�this�time�of�Jinjiang�and�HASCO�and�the�tie-up�of�SITC�and�Jinjiang�are�realized,�they�will�be�newly�consolidated�into�the�three�major�groups.

company,�and�Changjiang�Shipping,�the�biggest�domestic�coastal�shipping�company,�were�merged�in�2009,�creating�the�third�largest�shipping�company�in�China�after�COSCO�and�China�Shipping.

And�in�2016,�the�merger�between�Sinotrans�and�China�Merchants�group�was�implemented.

According�to�officials�involved�in�the�industry�noted�in�unison�that�the�purpose�for�that�would�be�"to�rebuild�their�unfavorably�performing�containership�sector�by�integrating�them."�According�to�the�statistics�by�Alphaliner,�a�French�research�company,the�fleet�and�its�capacity�as�of�May�2016�of�COSCO�Container�Lines�(COSCON)�are�287�ships/1,546,040�TEUs,�the�largest�in�the�4th�of�world�following�Maersk,�MSC�and�CMA-CGM.�

And�CMA-CGM,�Evergreen,�OOCL�and�COSCON�formed�new�alliance,�‘Ocean�Alliance’.�Service�that�COSCO�provides�are�changed�thorough�new�alliance�in�the�spring�of�2017.

On�the�Japan-China�routes,�Shanghai�Pan-Asia�Shipping�and�Shanghai�Puhai�Shipping�have�built�up�cooperative�ties�together�with�Sinotrans�Container�Lines.�There�are�mounting�expectations�in�the�industry,�as�a�source�affiliated�with�a�Chinese�shipping�company�says,�"If�COSCO�and�China�Shipping,�and�Jinjiang�Shipping�and�HASCO�are�respectively�to�be�merged,�service�adjustment�will�be�conducted�and�the�supply�and�demand�conditions�may�be�improved�on�the�over-capacity�Japan-China�routes."�Will�it�offer�a�ray�of�hope�to�the�routes�suffering�from�the�downtrend�rates�caused�by�supply�glut?

Logistics in CHINA Logistics in CHINA

Waigaoqiao Container Terminal at Shanghai port

Exchanging slots among 3 companies

Merger

COSCO Group(Shanghai PANASIA Shipping)

China Shipping Group(Shanghai Puhai Shipping)

Sinotrans Container Lines

Exchanging slots among 3 companies

GOTO ShippingInternational TS Lines

CCL

Joint operation in Qingdao route

Shanghai JinJiang Shipping (Group)

SITCContainer Lines HASCO

SIPG

Any relationshipin future?

Cooperative relationship

Merger Investment

■Cargo flow between Japan and China[TEU-based] (compiled by Shipping Conference And General Administration)

■Partnerships on the Japan-China routes

350,000

300,000

250,000

200,000

150,000

100,000

50,000

-25.0

-20.0

-15.0

-10.0

- 5.0

5.0

0.0

20.0

15.0

10.0

25.0(%)(TEU)

0

China→Japan Japan→China Growth rate

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(Year)

[Tonnage-based] (compiled by Japan Maritime Center)

40,000,000

35,000,000

30,000,000

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

-6.0

14.0

8.0

10.0

12.0

6.0

4.0

2.0

0.0

-2.0

-4.0

(%)(Ton)

02009 20142010 2011 2012 2013 (Year)

China→Japan Japan→China Growth rate

Dalian port

Japan-China trade in adversityWave of mergers, is the environment of supply

and demand improved?W

ill they really be merged? - The surprising movement of M&A between Chinese shipping companies emerged this summer. The COSCO group, a major state-owned ocean shipping operator, and China Shipping Group have entered into a negotiation on a merger, which has drawn a keen attention

in the industry. Also the merger of Shanghai Jinjiang Shipping (Group) and Shanghai Hai Hua shipping (HASCO) has made an impact on the market. "The merger movement will probably be the flash point of reorganization for the Japan-China route, which is the largest trade originating from Japan", said an industry official. As for the route, partnerships between shipping companies were accelerated last spring, resulting in reorganization of groups. Behind it there is a slow market. In a nutshell, as the official added, "a supply glut" is prevailing. Because the entry barrier is so low as to launch a service even with only one container ship, there are so many shipping companies which provide services now, leading to harsh competition and oversupply for demand. In consequence, the level of freight rates has long been in the downtrend. As it has become difficult to generate a profit under such conditions, the partnerships last year were made to reduce operational costs and maintain and improve the quality of services. From here on, it draws attention how the partnerships between shipping companies will change since the mergers. Currently the growth of Chinese economy begins to decline, as the official said, "Cargo flows are gradually reaching its ceiling". How will companies involved in the Japan-China trade cope with the adversity? The following is a report on the movement of the companies and the future of the trade. (Kosuke Nakamura, Masayuki Hasumi)

� Daily�-�CARGO�MAY�2016

Ocean Shipping

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Wuhan

Shenzhen

Kunming Xi’an

Harbin

ChangchunShenyang

YingkouDalian

Manzhouli

Erlianhaote

BeijingTianjin

Lianyungang Zhengzhou Xi'an

ShanghaiSuzhou Wuhan

YiwuChangsha

ChongqingChengdu

ShenzhenGuangzhou

Kunming

Lanzhou

Urumchi

Alashankou

Khorgos Almaty

Ekaterinburg

Moscow

Brest

WarsawHamburg

Duisburg

Rotterdam

Madrid

CityTrainOBORBorder of China

Harbin

ChangchunShenyang

YingkouDalian

Manzhouli

Erlianhaote

BeijingTianjin

Lianyungang Zhengzhou Xi'an

ShanghaiSuzhou Wuhan

YiwuChangsha

ChongqingChengdu

ShenzhenGuangzhou

Kunming

Lanzhou

Urumchi

Alashankou

Khorgos Almaty

Ekaterinburg

Moscow

Brest

WarsawHamburg

Duisburg

Rotterdam

Madrid

CityRailroadOne Belt,One RoadBorder of China

14� Daily�-�CARGO�MAY�2016 Daily�-�CARGO�MAY�2016� 15

In�October�2011,�a�service�on�the�route�between�Leipzig,�Germany,�and�Shenyang,�Liaoning,�was�launched�for�BMW�from�Germany.�Subsequently,�a�service�between�Chengdu,�Sichuan,�and�Lodz,�Poland�was�inaugurated�in�April�2013,�which�was�followed�in�July�2013�by�the�route�between�Zhengzhou,�Henan,�and�Hamburg,�Germany.�These�preceding�routes'�freight�rates�have�been�calculated�to�be�"$1�per�km�per�FEU",�which�means�that�each�solution�reaches�$10,000�for�a�total�of�10,000�km�or�longer.

"As�the�rates�range�from�half�to�one�fifth�of�the�levels�of�air�transport,�and�are�2-3�times�as�high�as�those�of�ocean�shipping,�its�lead�time�is�less�than�half�of�ocean�transport.�Railroad�shipping�can�respond�to�the�needs,�for�example,�when�you�cannot�afford�to�pay�for�air�transport,�but�want�to�ship�cargo�faster�than�by�ocean�shipping,"�said�a�top�official�for�the�Chinese�arm�of�a�western�mega�forwarder.

Shipping�by�rail�is�an�intermediate�service�between�ocean�and�air�shipping.�It�originally�started�to�be�utilized�as�the�third�mode�after�ocean�and�air,�with�the�purposes�of�constituting�part�of�supply�chain�management�and�hedging�various�risks.

On�the�other�hand,�however,�rail�shipping�is�neither�inexpensive�as�ocean�shipping,�

which�is�accustomed�to�logistics�scheme,�nor�so�reliable�as�air�shipping�in�emergent�circumstances.�So�it�has�been�labeled�as�a�"unsatisfactory"�method.

"What�is�important�is�a�rate,�after�all,"�said�outright�an�official�stationed�in�China�for�a�European-affiliated�shipper,�commenting�on�the�usability�of�railroad.�But�the�official�added�that�the�shipper�has�already�utilized�the�China-Europe�railroads.�Why?�The�reason�is�that�it�simply�matched�the�cost.

Putting�together�the�levels�of�rates�for�the�China-Europe�services�(basically�door-to-door)�heard�from�European,�Chinese�and�Japanese�forwarders,�the�per-FEU�rate�ranges�for�shipping�from�China�to�Europe�as�of�the�beginning�of�September�2015�were�$4,000-7,000�for�ex-Chongqing,�$5,000-8,000�or�higher�for�ex-Chengdu,�$4,000-8,000�for�ex-Zhengzhou,�$4,000-5,000�for�ex-Wuhan,�and�$6,000-7,000�or�higher�for�ex-�Suzhou.�The�rates�for�the�converse�route�from�Europe�to�China�seemed�to�be�$2,000-4,000�in�many�cases.

Moreover,�an�official�of�a�Chinese-affiliated�forwarder�grumbled,�"The�first�service�from�Harbin�was�substantially�charge-free".�I�asked�in�surprise,�"Was�that�for�nothing?"�The�official�replied�with�a�bitter�laugh,�"Yes.�It�was�for�the�whole�41FEU".

Many�local�governments�in�China�are�eager�to�establish�China-Europe�railway�routes.

Amid�a�downtrend�of�growth,�each�government's�first�priority�is�still�to�improve�the�rate�of�economic�growth.�The�top�officials�of�the�governments�are�occupied�by�the�personnel�parachuted�from�Central�Committee�of�the�Communist�Party�of�China�as�a�staff�reassignment.�If�Chinese�bureaucrats�are�in�pursuit�of�getting�ahead�in�their�careers,�it�is�necessary�for�them�to�make�an�achievement�in�the�appointed�posts�of�the�local�governments�during�the�courses.�

Against�the�background�of�the�slowdown�in�the�real�estate�industry,�each�local�government�is�poised�to�seek�the�light�in�the�trade�dependent�on�railroads.�"It�is�'One�Belt,�One�Road'�that�is�an�opportunity�for�the�next�development",�positively�stated�Li�Yifei,�Party�Secretary�of�Yiwu,�Zhejiang�at�a�press�conference�including�our�magazine�held�in�November�2014,�just�after�opening�of�the�railway�to�Madrid,�Spain.�A�specific�strategy�offered�by�the�

local�governments�is�a�subsidy.�As�shippers�had�continuously�complained�to�the�governments�that�the�$10,000�freight�charge�was�too�expensive,�they�have�decided�to�offer�much�contribution�for�railroad�transport�from�their�coffers.

According�to�the�Sichuan's�provincial�government,�Chengdu�Municipal�Bureau�of�Commerce�had�given�out�a�total�of�$3,500�per�FEU�for�two�years�since�the�opening�of�the�railway.�A�local�paper�there�has�reported�that�Wuhan's�municipal�government�has�decided�to�subsidize�to�equalize�the�shipping�cost�of�railway�with�that�of�ocean,�and�to�guarantee�the�issued�amount�for�five�years,�and�Suzhou'�municipal�government�seems�to�have�set�$2,000�per�FEU�as�a�subsidy.

According�to�a�local�paper,�Chongqing�and�Zhengzhou�governments�also�have�compensated�for�railroad�shipping�in�order�to�lower�its�cost�to�the�same�level�as�ocean�shipping.�A�source�affiliated�with�a�forwarder�was�quoted�as�saying�that�Zhengzhou�government�covers�freight�costs�from�Shanghai,�Tianjin,�Guangzhou�

41 FEUs all for free

"Red Money" is a driving force

and�other�locations�to�the�Zhengzhou's�railway�terminal,�adding,�"The�government�has�been�actively�conducting�sales�activity�in�Shanghai�since�the�beginning�of�the�railway�operation".

This�"Red�Money"�seems�to�be�distributed�to�block�train�operators,�which�are�run�by�another�company�in�each�city,�or�shippers.�

The�governments�also�are�making�an�effort�to�hold�down�the�operational�costs.�"The�average�rate�among�six�countries�(via�which�the�China-Europe�railroads�run�through�to�Germany)�was�$1�per�km�per�

FEU.�We�have�negotiated�with�Russian�Railways�to�decrease�it�in�a�step-by-step�manner�to�$0.8,�then�$0.7,�and�$0.55�at�present",�Huang�Qifan,�the�mayor�of�Chongqing�was�quoted�as�saying�at�a�forum�held�in�the�summer�of�2015.�If�costs�can�be�reduced,�less�funds�for�investment�are�needed.

When�I�asked�another�railway�forwarder�official�about�the�above-mentioned�"free-of-charge"�first�service,�the�official�replied�without�hesitation,�"It�probably�was�a�subsidy�that�made�it�true".

Logistics in CHINA Logistics in CHINA

■Comparison between the modes of transport from China to Europe. (From Wuhan to Hamburg)

《Time》(Door to door)

$4000 ~ 5000 or more

$2000 ~ 4000 or more 4 ~ 5 days

About 20 days

A little less than 40 days ~ 54 days$14000 ~ 15000 or more

《Cost》(Per FEU)

■Transporting Route by train between Europe and China

Zoom-in One Belt, One Road- is�an�economic�and�diplomatic�policy�of�China�government�to�

build�up�Silk�Road�Economic�Belt�on�the�land�routes�together�with�21st�Century�Maritime�Silk�Road�on�the�marine�routes.�The�Xi�Jinping�administration�has�prepared�Asian�Infrastructure�Investment�Bank�(AIIB)�as�a�funding�source�for�the�policy�to�advance�by�taking�its�prestige.�The�Central�Asia-Russia-Europe�via�CLB�and�the�Indian�Ocean-Africa-Middle�East-Europe�are�respectively�at�the�hearts�of�the�land�and�the�marine�routes.�The�land�routes�from�China�to�Southeast�Asia�and�South�Asia�are�also�aimed�at�the�policy.

CLB�is�a�transcontinental�railroad�built�in�line�with�the�Silk�Road�in�ancient�times.�Its�trunk�line�is�the�route�from�the�railway�container�terminal�within�Lianyungang�port�in�Jiangsu�to�Rotterdam.�The�first�train�was�operated�in�December�1992.

The�China-Europe�railway�routes�broadly�divided�into�the�southbound�one�which�runs�from�Alashankou�Station�in�the�Xinjiang�Uygur�Autonomous�Region�

through�to�Kazakhstan,�and�the�northbound�one�which�extends�from�Erenhot�in�the�same�region�through�to�the�Siberian�Land�Bridge�(SLB)�by�way�of�Mongol.�On�the�European�side,�both�of�the�routes�pass�through�Russia,�Belarus,�Poland�and�Germany.

The�use�of�CLB�has�been�accelerated�since�2000's�on�the�routes�from�China's�seacoast�districts�to�Central�Asia.�Still,�the�cooperation�with�stopover�countries,�as�in�customs�clearance�and�transshipment�as�a�result�of�the�differences�of�rail�width,�

was�necessary�for�the�whopping�total�of�10,000�km�route�to�Europe�to�be�connected,�and�the�use�had�long�

stagnated�in�the�first�place�due�to�the�problem�of�transportation�demand.�After�the�route�between�Chongqing�and�Duisburg,�Germany,�was�open�to�traffic�in�2011,�CLB�gained�momentum�in�use.�Since�the�Xi�Jinping�administration�announced�the�"One�Belt,�One�Road"�policy,�the�local�governments�had�launched�new�routes�one�after�another,�which�led�to�the�embodiment�of�the�grandiose�project�20�years�after�the�first�train.�

"One Belt, One Road" and "CLB"

EkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburgEkaterinburg

China-Europe Transcontinental RailroadsThe In-depth Report on

"New Routes for 21st Century"

1 0,000 USD per FEU - has been generally said to be the level of freight charge on the Eurasian Land Bridge. But it's not in reality.

In January 2011, the China-Europe railroads' first liner service on the Chongqing- Duisburg (Germany) route was inaugurated with HP as a main customer, which was a realization in the 19th year since the first service between Lianyungang, Jiangsu, in the easternmost point of China Land Bridge, and Rotterdam, Holland, in the westernmost point, was operated. (Masayuki Hasumi)

� Daily�-�CARGO�MAY�2016

Railroad

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