13 November 2009 04:58 [Source: ICIS news]
By John Richardson
SINGAPORE (ICIS news)--China’s long-term commitment to rebalance its economy away from exports and towards stronger domestic growth requires huge infrastructure investment – including a focus on improving chemicals logistics, industry sources said on Friday.
The Yangtze River is being dredged from a depth of 7 metres to 12.5 metres along the 300 kilometres from ?xml:namespace>
“This will enable chemical-parcel tankers (carrying liquid chemicals) of 40,000 tonnes and more to use the river as far as
“However, further dredging work is taking place, which will allow 10,000 tonne chemical barges to make the journey.”
According to Chinese government data over the next three years, some $300bn (€201bn) is due to be spent on expanding the country’s rail network by 20,000 kilometres, including 13,000 kilometres of high-speed track.
A vastly improved road network – akin to the
Improvements are being sought not just in hard infrastructure, but also in regulations and in “soft infrastructure” – the skills to handle the movements of more sophisticated goods, including potentially more hazardous chemicals.
“When it comes to chemicals, there are also a lot of inconsistencies in regulations that need to be ironed out,” said McCune.
One such inconsistency is the ban on moving acrylonitrile - classified as hyper-toxic in
This adds $15/tonne to freight costs because of the need to move it by road.
Corruption remains an issue, according to another industry source, who said: “People are not worried about the cost of non-compliance, because all they need to do is pay the authorities a bribe to avoid a financial or other type of penalty.”
But McCune stressed that the State Administration of Work Safety (SAWS), the government body responsible for enforcing legislation governing the movement of chemicals, was working hard to improve both consistency of regulations and effective enforcement.
“SAWS gained some extra teeth a few years ago following two spillages of sulphuric acid.
“But it’s not clear what its level of authority is within the pantheon of government agencies.”
A big exception to lack of expertise in chemical movement is the city of
“The whole drive of the government is to develop the economy further inland, and to provide export corridors for the burgeoning chemical activity in resource-rich northwest
“The inevitable increase in hazardous liquids demand will require different infrastructure (ISO tanks, packed chemical warehouses, etc) and higher skill levels to those required for polymers…The higher knowledge content will underpin margins for liquid-based logistics players. Outsourcing to specialist 3PLs (third party logistics) providers will accelerate.”
There is a long way to go, though: Logistics account for an average 20% of finished-goods prices in
($1 = €0.67)
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