China frees up coastal piggyback system for foreign trade containers

China has freed up the coastal piggyback system for shipping of foreign trade containers between domestic ports, enabling foreign logistics giants like A.P. Moller-Maersk and Orient Overseas Container Line to plan first voyages by May end, according to analysts, who recently said the move highlights China's willingness to further its 'opening up' policy.

The administrative committee of Shanghai's Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone told a recent news conference that China will introduce a container freight forward rate contract trading platform.

Despite a complex international situation and given the impact of the COVID-19 pandemic, the Yangshan Special Comprehensive Bonded Zone in Shanghai has encouraged enterprises to resume production, and the business in the bonded zone has operated smoothly in the first quarter, the committee said.

"The new service (for shipping of foreign trade containers between ports within China) is expected to help cut the logistics costs for both exporters and importers, improve the utilisation rates of container ships, and relieve the tightness of shipping capacity to a certain extent," said Zhou Zhicheng, a researcher at the Beijing-based China Federation of Logistics and Purchasing.

Jens Eskelund, China chief representative of Danish shipping and logistics giant A.P. Moller-Maersk, said the permission for foreign carriers to carry out international relay is very welcome news and represents a tangible step for foreign carriers in China toward achieving market access on reciprocal terms, an official Chinese media outlet reported.

"International relay will allow us to improve services, giving our customers more flexibility and options for their shipments. We are preparing the first shipment in Yangshan terminal in Shanghai, together with the Lin-gang Special Area Administration and other relevant stakeholders," Eskelund said.

Hong Kong-based Asia Shipping Certification Services Co Ltd has been officially approved to carry out statutory ship inspection work in the Lin-gang Special Area as the first inspection agency that is not incorporated in the Chinese mainland.

In March and April, the daily average container throughput in Yangshan terminal reached 66,000 and 59,000 twenty-foot equivalent units or TEUs, each accounting for 90 per cent and 85 per cent respectively of the average level seen in the first quarter.

As of May 8, 193 companies operating in the Yangshan Special Comprehensive Bonded Zone, or 85 per cent of the total, had resumed operations. About half of total employees who work in the bonded zone arrived at their workplaces physically.

"The coastal piggyback system will help boost logistics capacity, improve efficiency and provide more business opportunities for global companies to further expand their market presence in China," said Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation.

"The move is more advanced than the coastal transportation policies being practiced in some countries. Major economies such as the United States and Japan have not opened up coastal transportation for global shipping firms yet," Bai said.

China's total imports and exports of goods expanded by 1.9 per cent year on year to a record 32.16 trillion yuan ($4.77 trillion) last year, despite a worldwide slump in shipments due to the pandemic.

Source: FIBRE2FASHION.com