Qingdao Port: Seeking Chances in Challenges

By SUN LI

The container wharf at Qingdao Port.

As China’s second largest in terms of international trade, Qingdao Port has achieved growth against a backdrop of shrinking global markets. By the end of June, it had already handled over 157.57 million tons of freight and 5.09 million standard containers, an increase of five percent and two percent respectively over the previous year.

Self-improvement

The last quarter of 2008 saw a recession in the marine industry – the Baltic Freight Index slipped to 660 points in December 2008, compared to a high of 12,000 in June 2008. Qingdao Port also saw a decline in freighters, leading to overstocking and port congestion.

The port leadership, in response to the severe situation, soon unveiled 277 emergency preplans. It strengthened control over all the wharfs, storage yards, warehouses, human resources and instruments within the port. This was aimed at maximizing the resource efficiency. While at the same time, it carried out a precision management plan to increase profits and reduce costs.

The Qingdao Port has been encouraging staff members to improve their skills. In the first half of this year alone, over 100 records in the port have been broken. This included breaking, for the tenth time, the world record for the speed of unloading ores.

An Environmentally-Friendly Port

“In this crisis, our enterprise has to grasp opportunities for development,” said Chang Dechuan, chairman of the board of the Qingdao Port. “We aim to build an energy-saving and environmentally-friendly company, establishing a sound base for future development.”

Over RMB 350 million has been invested in a series of environmental projects, including a sewage treatment plant and coal processing center with dustproof facilities. Furthermore, billions in the funding built modern wharfs for ore and coal storage, all fully equipped with dustproof systems.

During the 26th IAPH World Ports Conference held in Italy last May, the Qingdao Port was widely recognized by its foreign counterparts for its processing capacity for sewage, sump oil and exhaust gas.

United During Hard Times

The current crisis has had some adverse effects upon the transport of ore and production of iron works since the last quarter of 2008. “Our group has worked with shippers and cargo owners to respond to this crisis,” said Chang.

As ores piled up in the storage yards, and freighters found themselves unable to offload their cargoes, the port invested an additional RMB10 million to enlarge storage facilities. The brand new 250,000 sq m storage yards help cargo owners reduce berthing fees, by at least US $200,000 per day. The port also helped them find yards outside the harbor.

Meanwhile, Qingdao Port has been seeking to cooperate with renowned shipping companies and cargo owners to jointly reduce risks and increase safety. Thus far, seven of the world’s top 500 companies have landed in the port.

Although short of cash, many foreign companies have strong confidence in Qingdao Port and have made big investments in its development. On June 29, the Qingdao Qianwan Container Terminal Co., Ltd. was established jointly by five parties from three countries. They plan to invest RMB 1.4 billion to build and manage 10 large-scale container berths along a 3,408-m coastline.