Postprocesamiento

Figure 5.1 presents the relative location of the Humber and Xiamen in the world, as stated in Section 4.2.5. The Humber is on the east coast of the UK while Xiamen is on the southeast coast of China.

The Humber is situated centrally on the east coast of the UK (Figure 5.2). It is a large tidal estuary on the east coast of Northern England and drains a catchment area of some 24,472 km², around 20% of England is total land surface. It forms part of the boundary between the East Riding of Yorkshire on the north bank, and North Lincolnshire and Northeast Lincolnshire on the south bank, being 120km long and 14km wide at its broadest.

Figure 5. 1 Location of the Humber and Xiamen in the world A: Xiamen; B: the Humber Source: Google-Map

The Humber has the UK‘s largest port complex, including Hull, Grimsby, Immingham, Goole, New Holland and Killingholme. It has 40,000 ship movements per year and its ports and wharves handle 14% of the UK‘s international trade (YH Strategy 2006).

Industrial sites alongside the estuary include chemical works, oil refineries and power stations that dominate ports of the shore area.

Facing the European continent, the Humber has strategic importance as the gateway site to the North Sea. The director of ABP highlighted the Humber as the UK‘s ―centre of gravity‖ for seaborne trade. During the interviews, 16 (80%) of the Humber ports‘

interviewees commented on the Humber‘s strategic location. Here are typical quotations:

“The critical point for Humber to development logistics is its location, location and location!”

Humber Interviewee 5

“The most important benefit of this area is its location. The Humber ports are highly significantly located to link east and west. Within 4 hours of drive, there are 40million population of UK.”

Humber Interviewee 4, a Port Manager

“Strategic location of the Humber ports is capable of providing overnight shipping services of less than 12 hours to and from the continent. It is centrally east-coast located with equal distance to London, Edinburgh and Rotterdam.”

Humber Interviewee 3, a City Council Officer

“60% of all freight tonne kilometres of containers and trailers passing Felixstowe and Southampton are to and from the three Northern Way regions. The Humber ports could provide relief to the congestion in the southern ports with shorter times and at lower costs”

Humber Interviewee 11, a CEO of Consultancy

Xiamen is a port city, located in the southeast of China (see Figure 5.3), connected with YRD in the north and PRD in the south, and separated from Taiwan by the Taiwan Strait. More specifically, Xiamen is on the southeast of Fujian province, at the mouth of the Jiulong River. It is backed by the Zhangzhou and Quanzhou Plain, and faces the island of Kinmen in Taiwan. Xiamen is composed of Xiamen Island, Gulangyu, Tongan and the inland northern coastal parts of the Jiulong River, with a land area of 1,565km² and sea area of 300km². Xiamen is well known as an international port city with a rich landscape. Xiamen ports have 234 km of winding coastline (Zhang 2009).

Figure 5. 3 Locations of Xiamen (source: Google-Map)

Outside the ports are scattered islands and the port area is surrounded by hills. The ports are superior natural harbours with deep water that is ice-free all year-round. As Xiamen

Taiwan Shanghai

Meizhou Shantou

Xiamen

Shenzhen Guangzhou

Hangzhou

Fuzhou R=200KM

is important for trading with Taiwan and other international ports, Xiamen ports are important to handle trade with their favourite natural endowments. Xiamen has a mild subtropical climate. The annual average temperature is 21 degrees, with no seasonal extremes of heat or cold. The location, weather and unique historical background are conducive to Xiamen port performance.

Concerning location, some interviewees thought Xiamen had a location advantage, some interviewees thought Xiamen‘s location was not good, and other interviewees thought location was not important for port performance improvement. Specifically, twelve (60%) of Xiamen respondents considered geographical location was an advantage to develop a port. Being equidistant from Shanghai (supported by YRD) and Hongkong (supported by PRD), Xiamen is an important city in Southeast China.

Xiamen‘s proximity to Taiwan, Hongkong and Macao grants Xiamen a strategic political location. Xiamen has its unique advantages over Taiwan in terms of location, economy and politics. Xiamen‘s proximity to Taiwan is well known: the closest distance between them is less than 3km. Socio-economically, one tenth of Taiwanese nationals whose ancestors came from mainland China have Xiamen citizenships. The geographical proximity, common language and customs, and ethnic relationships between Taiwan and Xiamen play an irreplaceable role in promoting cross-strait economic and trade cooperation and cultural exchanges to attract Taiwanese investment.

Politically, Xiamen is strategically positioned to promote the peaceful reunification of Taiwan with mainland China. Among the five special economic zones (Shenzhen, Zhuhai, Shantou, Xiamen, Hainan), Xiamen is the only zone to be approved to implement certain Freeport policies. This unique policy advantage has enabled Xiamen to be a special economic zone with the highest degree of openness (Huang 2009). The location advantages bring the economic and political advantages to Xiamen.

The interviewees commonly recognised the location as a very important factor for Xiamen to develop its logistics, either due to its geographical position or its political position in relation to Taiwan, for example:

“Xiamen is strategically located close to Taiwan. When the weather is fine, you can see clearly Kinmen Island (of Taiwan) from Huandao Road (of Xiamen). Xiamen is absolutely the best place to conduct the trading between mainland China and Taiwan.”

Xiamen Interviewee 1, a 3PL manager

“Xiamen has a strong point to develop port performance with a Haixi (West to the Taiwan Straight) frontier position. It has both a political and economic meaning.”

Xiamen Interviewee 7, a Carrier Manager

“Xiamen lies to the west of Taiwan Straight, which gives the preferential consideration by the

Xiamen Interviewee 15, a professor in one maritime institute

Xiamen‘s proximity to Taiwan gives Xiamen an advantage in trading with Taiwan, not only in high volume but also small-scale trade. The small scale trade with Taiwan in 2009 amounted to 110 million USD, said one interviewee. He further explained,

“The small scale trade with Taiwan has become one of the major highlights of cross-strait trade in 2009. It has the advantage of flexible operation to facilitate fast and efficient customs clearance. The cargo would come and go between Taiwan and Xiamen small scale trading ports by Taiwan boats.

Then the logistics companies deliver cargoes to customers. This special “fast mode” provides services of small volume with frequent batches, efficient and flexible distribution. The customers can get cargo delivered within 2-3 days, which the large scale trade cannot compete with.”

The importance of Xiamen‘s location stems not only from its proximity to Taiwan, but also from its strategic location for eastern China and eastern Asia.

“For the development of port performance, the important factor is location, location, and location!

As it is in the middle between Shanghai and Shenzhen, it can attract the hinterland cargoes between Yangtze River Delta and Pearl River Delta.”

Xiamen Interviewee 12, a Director of port authority

“Geographically, Xiamen is in the centre between Japan, South Korea and Southeast Asia. All the ships in the western Pacific and central/Northern China go to the South China Sea and those for the Indian Ocean must go via Xiamen.”

Xiamen Interviewee 18, a LSP manager

Six (30%) interviewees, however, considered that Xiamen‘s location was not favourable.

Another three interviewees claimed that although the location is important, it cannot be improved, since the ports are naturally geographical resorts. To their understanding, location is beyond the control of terminal operators and port managers.

Xiamen‘s location has both advantages and disadvantages. As addressed earlier, 30% of interview interviewees assessed its location as not good, compared with other port cities that have better performance, such as Shanghai, Shenzhen, Hongkong, Guangzhou.

They thought those ports are better located, with stronger hinterlands.

The findings on Xiamen‘s location indicate that Xiamen has a location advantage over Taiwan, eastern China and eastern Asia. Its location in relation to Taiwan is geographically, politically and economically important, which enables Xiamen to have advantages to improve its port performance.

Interviewees from both regions clarified that their regions benefited from a strategic geographical location that was conducive to their port performance, although Shanghai and Shenzhen comparatively over shadowed Xiamen‘s location. This finding is consistent with the literature (Skjott-Larsen et al. 2003; Song and Yeo 2004; De Langen et al. 2007; Yeo et al. 2008; Tongzon 2009), and particularly supports Lirn et al. (2004) who found that three out of the top five transhipment port selection sub-criteria are

location-related. However, the finding also supports Lirn et al. (2004) who note that port location is a factor beyond control.

5.2 Government support

All thirty Xiamen interviewees considered that government support is important to influence port performance. As one interviewee said,

“Government support is the most important thing in China to develop port performance. It is definite that port cannot develop without government support, although developing port performance may not work if only depending on government …”

Xiamen Interviewee 20, a Manager in a shipping company

Firstly, government support to logistics is reflected in preferential policy on tax reduction or tax exemption. This point was also made by one interviewee,

“Our company is located in the bonded zone, hence enjoys the policy of tax benefit. We can save tariff and VAT (value-added tax) to reduce our cost and make us more competitive in the market.”

Xiamen Interviewee 6, a Manufacturer Logistics Manager

Eight (40%) interviewees noted that the interaction between the bonded zone and port together with the bonded port policy would promote Xiamen‘s port performance.

Preferential policies are intended to promote Xiamen as a regional transhipment port.

As one port director said,

“The resource integration and interaction between Xiangyu Bonded Zone and Dongdu Port, and a new bonded zone in Haicang Port Area will help to create a favourable environment for the development of port, improve logistics efficiency and quality, enhance the Xiamen Harbour Management and service levels, leading to improve opening up at new levels of Xiamen.”

However, in many areas, although there are policies, they are not well implemented. For example, manufacturers do not benefit from the preferential policy, as illustrated in the following comments:

“We have to waste more time and energy to prepare more documents to meet those extra requirements as we are in the bonded area. The extra burden may drive us off the bonded area…”

Xiamen Interviewee 4, a Manufacturer Vice Director

“The concept of „Zone-Port Interaction‟ (interaction between tax-free-zone and port) has been raised for years, however, the scheme has not come to action. There is a big gap between the strategy/scheme and actions.”

Information 13, a consultant Expert

There is a common gap between expectation and satisfaction. What is important is to shrink the gap and make the expectation come true. This depends on the efforts of both government and the enterprises.

Secondly, government support to logistics can be reflected in investment in physical infrastructure and port technical infrastructure, as one interviewee explained:

“Xiamen government has invested a lot in the physical infrastructures, such as highway, railway, bridge, port facilities and information system. Three new railways will be put into use by 2015 to

connect Xiamen and inland China. More highways and more bridges to connect Xiamen and outside will be available in two years. The government has contributed to the infrastructure. ”

Xiamen Interviewee 7, Maersk Line Manager

Thirdly, the Xiamen government has a logistics scheme that targets Xiamen as a logistics city; this is evidence that the Xiamen government supports port performance.

Xiamen government has won a good reputation of being open and transparent. The interviewees realised the importance of government support to port performance, as Interviewee 3 from government claimed:

“We have promoted the image that Xiamen will be developed based on the port, become prosperous based on the port and become competitive based on the port. Xiamen‟s future development and strategy will be based on this conception.”

However, sometimes the scheme may not be appropriate. Concerning the regional strategy, in ―Xiamen City and Port Development Scheme‖ in 2004, Xiamen targeted to become an international transhipment port. However, Interviewee 17, one APL Manager, commented that Xiamen is not suitable for developing an international transhipment port. He said,

“According to the common rule that an international transhipment port should handle more than 20%

of transhipment cargoes, Xiamen, which has only 0.4% of transhipment cargoes, is far from becoming an international transhipment port because of its location constraint, historical constraint and policy constraint”.

Fourthly, central government support is of key importance. Interviewee 14 explained,

“The local government‟s measures depend on central government‟s direction. As central government has positioned Xiamen as one of the 9 logistics cities in China, Xiamen government has put lots of efforts to improve port performance.”

The Central Government are clear about the importance of Xiamen to Taiwan and promoting the policy of ―three big links‖ which means three strong direct connections between mainland China and Taiwan: connections by air/ship, connections by trade and connections by post. Obviously, ―three big links‖ improve Xiamen‘s logistics by trade and transport, as indicated by one interviewee:

“„Three big links‟ has promoted the communications between Taiwan and Xiamen, not only in terms of passengers, but also in terms of cargoes. The trade has increased sharply between Taiwan and Xiamen since the first trial of „three big links‟. The direct vessel and direct flight between Taiwan and Xiamen have reduced the logistics cost and saved time dramatically.”

Xiamen Interviewee 16, a COSCO Manager

Nowadays it takes a direct vessel only two days from Xiamen to reach Taiwan. Before

‗three big links‘, vessels had to tranship via Hongkong to Taiwan, which took about 10 days. Direct shipment not only reduces shipping time but also reduces transport costs.

According to statistics from the Xiamen Logistics Association, the cost reduction from cargo and passengers is up to millions of United States dollars a year. The information flow between Taiwan and Xiamen has also been improved significantly.

Since China‘s State Council raised the concept of the ―Haixi Economic Zone‖ in May, 2009, both Taiwan and Xiamen have been proactive in the communications of logistics trade cooperation and culture exchange. Six out of the 20 interviewees (30%) spoke about the ―Haixi‖ policy. They thought this policy would encourage physical infrastructure improvement and cross-region cooperation so that trade and logistics would be greatly improved. The interviewees believed that the ―Haixi policy‖ would attract much FDI. For example, many Taiwan companies have located their factories or offices to Xiamen since Xiamen started to offer preferential policies to investors from Taiwan, Hongkong and overseas.

However, Xiamen does not offer such preferential policies as other ports such as Shenzhen and Shanghai. Even with the current preferential policy, shippers and other port users cannot really enjoy the benefit. As one interviewee explained,

“We will see if Xiamen can make good use of the policy to attract Taiwanese business and investment. Xiamen did not perform so well as Suzhou and Hangzhou that have attracted similar amount of investment from Taiwan in the past 5 years as Xiamen has done in the past 20 years, which implies that Xiamen has some room to improve. The government is supposed to do more and coordinate between different departments and improve the services...”

Xiamen Interviewee 15, a Manufacturer Manager

The regional logistics scheme is part of government policy. As explained by the interviewees, Xiamen had three scheme problems: 1. The layout of port performance is the main problem. There is no clear separation between residential, port and office areas.

This results in congestions in rush hours. 2. Overinvestment in Xiamen‘s port technical infrastructure is recognised as another scheme problem. Xiamen has seven ports whose production capacity reaches 13.8 million TEU in 2009, three times the actual shipping volume. By 2011, the capacity will amount to 18 million TEU. The over-capacity due to uncoordinated development of ports has caused a serious waste of resources and higher operations cost. As one interviewee commented, Dalian and Xiamen are known as the two big ports with most overinvestment, which result in fierce competition. 3. Fujian provincial government put forward a port development plan, ―Liang Ji Liang San‖, which means Fujian will focus on two container ports in Xiamen and Fuzhou which target 20-30m TEUs and two bulk ports in Meizhou Gulf and Luoyuan Gulf which target 200-300m metric tonnes‘ development. This scheme of over-capacity will increase the competition between different ports, which will result in worse profit and poorer efficiency. This scheme violates the trend of integration. The irrational competition is not conducive to regional ports‘ efforts to upgrade overall competitiveness, and will weaken competitiveness in the long term.

Based on the interview analysis, government support to Xiamen ports is complicated.

On the one hand, government is trying to support port development with preferential policies. On the other hand, the support is limited and hindered by the relationship between Taiwan and mainland China. Moreover, the logistics scheme drawn by the government might be problematic due to lack of experience and expertise.

According to the Humber interviewees, government support is not very positive. For example, the interviewees complained about the very slow planning process, as indicated below:

“We need a better planning approval process, better and faster, and more transparent. The whole process itself is too slow, lengthy and cumbersome.”

Humber Interviewee 16, a Port Authority Director

“The Port of Hull has eventually got consent for a container terminal, which is called Quay 2005, it was originally called Quay 2000. Till now it has not started construction yet. I am afraid it will be renamed as Quay 2010….”

Interviewee 7, a Regional Development Agency Manager

“We cannot develop new facilities because of restrictions in the planning process. We want to develop new berths in the river, but we face considerable difficulties in terms of the challenge of obtaining planning permission. In terms of constraints and challenges, No. 1 is the planning process.”

Humber Interviewee 4, a Port Manager

The UK‘s slow planning process is one factor that negatively influences port performance. The Hull container terminal project is a convincing example. Other projects in Grimsby also face the same problem. The issue of slow process also applies to other UK industries. One example is the Heathrow Terminal 5 project. The project was approved by the Secretary of State in 2001, after the longest public inquiry in British history (46 months). The planning process itself cost nearly £63m over a period of 14 years (http://www.designbuild-network.com).

In contrast with this example, it took less than one year for Beijing Terminal 3 (which has a similar scale and facilities) to be approved. The cases imply fast change in China and slow change in the UK. According to one Xiamen interviewee,

“Our China headquarters is in Shanghai. Whenever I go to Shanghai (once every three months), I am surprised at the changes there. It‟s amazing to experience the changes!”

According to the Humber interview interviewees, the UK‘s slow planning process is

According to the Humber interview interviewees, the UK‘s slow planning process is

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