TPT July 2011

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84 July 2011 ›
Global Marketplace
Transport
The mighty Chinese export engine is
heavily reliant on a weak link:
a ramshackle and suddenly restive
trucking industry
China’s export trade of $1.5tn a year is made possible by highly
efficient factories, low-cost labour, and a fleet of container ships
able to transport goods around the globe. For another fortunate
circumstance, moving those goods from the factory floor to one of
China’s enormous seaports is often a matter of a drive of under two
hours. Now, however, much manufacturing is being moved inland,
and Beijing is finding that its plan to take advantage of lower labour
costs in poorer regions may have put too much pressure on a
segment of what David Barboza of the International Herald Tribune
calls “the Made in China chain.”
Reporting from Shanghai, where he is based, Mr Barboza observed
that moving goods to port in China typically means engaging the
services of one of thousands of small, low-cost trucking companies,
many of them family-owned. But, he said, as vital as trucking is to
China’s export machine, the government “seems to be ignoring the
drawbacks of what analysts say is an increasingly disorganized,
inefficient, and even costly way to transport factory goods,” to
seaports. (“China’s Exports Perch on Uncertain Truck System,” 28
April)
The consequences of this neglect became apparent in late April,
when some 2,000 truckers abruptly staged a strike to protest what
they considered unfair fees for road and seaport access and – the
immediate cause of their anger – the rising cost of fuel. Drivers
inured to the rigours of life on the road in the cab of an 18-wheeler
had had one too many hardships laid on them.
“We’re paying a lot more money for fuel than we did three years
ago, but what we get paid for freight has stayed the same,” Mr
Barboza was told by a truck owner stationed at a dusty trucking
depot near one of Shanghai’s busiest ports. The man inquired,
“How am I supposed to survive?” According to the Herald Tribune
account, some protestors hurled rocks, tried to overturn police
cars, and smashed windshields on trucks whose drivers stayed
clear of the action. After three days, employing threats and
arrests, the Shanghai municipal police force finally succeeded
in ending the highly unusual three-day public demonstration of
discontent. The protestors did obtain a pledge of lower fees for
the use of roads and seaport. But Mr Barboza had recognised a
pronounced disconnect between China’s heavy investment in
infrastructure and expressways to make its transportation network
more efficient, and its apparent indifference toward the owner-
operators who ply the roads from plant to port.
› A curiosity of the situation is that transporting goods by truck in
China is fairly expensive. As noted by Mr Barboza, not only are
many of the country’s modern roadways toll roads: analysts say that
regulations as to their use have burdened trucking companies with
heavy taxes and insurance and other fees.
According to the American Trucking Association, moving goods by
truck in the US costs about $1.75 per mile. That includes driver
salaries, truck leases, insurance, tolls, and many other related costs.
By comparison, Mr Barboza wrote, “Trucking costs in China’s two
biggest export regions – the Yangtze River Delta near Shanghai and
the Pearl River Delta around Hong Kong – are $2.50 to $3 a mile.
That is despite low pay to Chinese drivers, who might earn only 25
cents an hour, versus about $17 an hour in the US.”
› It seems that China’s transportation authorities might do well to
heed the warning implicit in the words of Mark Millar, of M Power
Associates in Hong Kong. The China logistics expert told the Herald
Tribune that he sees Chinese trucking as “a seriously fragmented
and brutally competitive industry”.
Other news of trucking . . .
› The US Transportation Department on 8 April announced a
proposal for a new three-year cross-border trucking programme
that would permit Mexican drivers to make deliveries within the US.
If actuated, the proposal would presumably lead to the elimination of
tariffs against a number of American exports, imposed by Mexico in
2009 on grounds of a US failure to comply with trucking provisions
of the 1994 North American Free Trade Agreement.
As noted by David Hendricks in the Houston (Texas) Chronicle,
American opposition to the cross-border trucking has turned on
safety concerns about Mexican trucks; additionally, American
truckers’ unions have resisted competition from south of the border.
The US Transportation Department will pay as much as $2.5mn to
equip Mexican trucks with electronic data recorders for monitoring
compliance with safety regulations, according to a department fact
sheet quoted by Bloomberg News.
Technology
Australian development of a paper-thin
“strong steel” from graphite presages a
new era in design engineering
Scientists at the University of Technology, Sydney (UTS) have
published remarkable results from experiments with a graphite-
Chinese lorry drivers are facing rising costs