With the continuous progress on the construction of Shanghai international shipping center and trade center, the rapid development of modern logistic industry and the adjustment of industrial structure in Shanghai have posed many challenges to freight transportation. In a cosmopolis like Shanghai, the growing trade volume has given rise to a huge shipping demand, which poses new requirements on road transportation. Shanghai has to reasonably plan and lay out its comprehensive road transportation hub, improve the freight transportation network, make better plans for the outgoing freight channel in port areas and the layout of terminals and stations, and strengthen the connection with the Yangtze River Delta freight transportation channel. Therefore, it is especially important to study how to further enhance the freight logistics efficiency in the city.
I. Overall freight logistics efficiency in Shanghai is in a leading position in China
The freight logistics efficiency in Shanghai is in a leading position in China. Shanghai boasts an advanced freight transportation infrastructure, and ranks top in the country in terms of the number of berths at container terminals, total road mileage, number of logistic enterprises rated above 4A, professional and large vans and vehicle technology. The working efficiency of express delivery outlets and vans in the city already ranks high nationwide. However, the high unloaded ratio of container lorry results in resource waste to some extent, the low proportion of trailer impedes high-efficiency logistic operation, and the long distance from stockyard to port areas lowers the port transportation efficiency. Based on indicator analysis, the overall freight logistics efficiency in Shanghai is in a leading position in China.
1 Indicator assessment of freight logistics efficiency
Note: there are four levels of indicator assessment - leading, good, medium, poor
II. Administrative efficiency, market efficiency and technical approaches need improvement.
(1) Administrative efficiency shall be further improved.
Government administration and industrial needs are not fully aligned. Despite the obvious improvement in Shanghai government’s working efficiency in recent years, a slew of deficiencies still exist, such as low efficiency in administrative approval, insufficient transparency in government work, arbitrary and additional charge, and poor law-based administrative supervision. Meanwhile, administrative charge remains high. The large amount of infrastructures, such as road, bridge, airport and port, mainly rely on charges to recover the investment and maintain operation, which increases the burden on enterprise’s production and operation and eventually translates into high logistic cost in the society.
Unified planning for logistic infrastructure is lacking. Under the traditional mode of segmented and multiple management, the planning and construction of different logistic infrastructures in Shanghai isn’t coordinated, resulting in their poor compatibility and systematic functions. The investment is also small in hub facilities connecting different transportation modes and the transportation systems in different regions, and there are a lot of restrictions on the right of way for freight transportation. To ensure high-efficiency and smooth traffic in the city, Shanghai imposes rigorous restrictions on the number and license plate of lorries entering the city. Enterprises that cannot obtain the qualified license plate usually load freight in passenger cars in order to get it into the city.
(2) Multiple weaknesses exist in market efficiency
The operating and organizational mode is simple. According to a survey by Shanghai Logistics Association, there are thousands of logistic companies registered in Shanghai, but only a small part of them are real comprehensive logistic enterprises. Most of them are mainly engaged in domestic express delivery and freight distribution and transportation, while the rest is simply engaged in freight agency, transportation and warehouse operation. Many enterprises with the “logistics” title aren’t real logistic enterprises. Modern logistic organization and operation modes such as professional transportation, drop and pull transport and multimodal transportation take up only a small proportion in the road freight transportation in Shanghai, preventing the further improvement of freight transportation efficiency.
Effective market regulation is absent. At present, many family stores and private enterprises are not under the regulation of standard authorities. Featuring a low vehicle operation cost and strong survival capability, they exist in the market through the affiliation to large logistic companies, but the latter cannot supervise the former or manage the vehicles affiliated to them. Meanwhile, the overuse of lorries beyond their service life leads to the fact that some vehicles with high pollution, high fuel consumption and great safety risks are still running on the road, preventing market enhancement in general.
Transportation capacity is in serious surplus. As local logistic enterprises are “many, small, unregulated and disorderly”, and freight logistic enterprises lack an environment of benign competition in Shanghai, vehicles from nearby provinces and cities have swarmed into the city. This leads to such unhealthy phenomenon as low-price competition, overload, speculation and lost order, which, combined with the lack of solid and effective market supervision, makes it urgent to improve the development environment of this industry.
(3) Technical approaches have no leading edges in the country
The technical and working standards for logistics are not unified. The incompatibility of equipment standard between different transportation modes impairs the development of Shanghai’s comprehensive transportation, lowers logistic efficiency and squeezes the room for cost control. The misaligned standards for logistic apparatuses seriously impede the mechanization and automation in freight transportation, storage and handling.
Progress on logistic standardization is slow. The logistic standardization in China, including Shanghai, is in the starting period, and the progress is very slow. After national standards such as the Bar Code for Commodity and Bar Code in Dispatch Unit were formulated, relevant departments originally hoped to rely on them to standardize the use of logistic bar code, but their actual utility rate is too low. Technical norms and standards for vehicles are relatively backward. Currently vehicles in Shanghai generally follow the Euro IV standard, whereas developed countries have basically all applied the Euro V or higher standard, which features much lower carbon emission and fuel consumption.
III. Major tasks to improve the freight logistics efficiency
To improve the road freight logistics efficiency in Shanghai, the following basic points shall be observed, namely it shall serve the social and economic integration of the Yangtze River Delta, serve the construction of Shanghai international shipping center, and serve the development of Shanghai’s logistic industry. In this process, “three innovations” shall be carried out and “five major tasks” shall be accomplished in order to comprehensively improve the road freight logistics efficiency in Shanghai, and provide logistic services featured by superior quality, high efficiency, low energy consumption and environmental friendliness. In the end, main logistic indicators shall reach the leading level in China and approach the advanced level in developed countries, thus making Shanghai a demonstration city in China for logistics.
(1) Innovation in management concept
To improve the freight logistics efficiency, we shall actively adopt the modern logistic management concept, change the traditional mode from warehouse to freight station and then to the stockyard, innovate the logistic operation notion, and energetically develop new transportation modes. We shall break down the barriers between regions, cut the time in passing road junctions, and raise the government’s service efficiency. Efforts shall also be made to encourage the construction of public stockyard, promote the renting of logistic facilities on a larger scale, and largely raise the proportion of shared delivery in the city to realize more efficient resource utilization.
(2) Innovation in standardization
Formulating the standard is good for establishing reasonable market norms and creating a fair competition environment. Standardization mainly lies in the following aspects. The first is formulating unified technical standards. For instance, there must be unified technical norms for the size of tray, the size of storage rack in warehouses and the size of container, and corresponding standards shall also be set for the size of truck, latch, socket and service life. The second is standardizing market service. Illegal operations such as unlicensed car, affiliated vehicle, fake plate and uninsured vehicle shall be rigorously investigated and dealt with, overloading and fatigue driving shall be strictly prohibited, and standards for the safe operation of lorries shall be formulated. The third is raising the emission reduction standard. The Euro III standard shall be upgraded to Euro IV or V standard for lorries, especially those entering the city proper, vehicle fleet shall be upgraded at a higher frequency to reduce environmental pollution, and vehicle scale-up shall be accelerated.
(3) Innovation in information technology
Technologies such as EDI, bar code, GPS and radio frequency shall be applied more extensively in all links of freight logistics, and information about terminals and stations, transportation equipment, road facilities and operation management shall be effectively shared. OBU technology shall be promoted and advanced logistic technologies shall be developed and applied for public service platforms. Procedures at various junctions shall be streamlined through information technology, such as launching the terminal/station entry/exit e-card system to reduce the queuing time.
Five major tasks:
(1) Advance intensive distribution in the city.
(2) Reinforce the promotion of the drop and pull transport.
(3) Rationally optimize the construction of road freight terminals and stations.
(4) Improve the construction of public information platform.
(5) Accelerate the R&D and application of new technologies.
IV. Measures and suggestions
(1) Set up logistic exchange platform; coordinate government administration
The logistic joint meeting system shall be further improved to specify the duties of leading functional departments. It is suggested to establish a sound joint meeting system under the organization of Shanghai municipal Party Committee and municipal leaders and under the leadership of a specific department. This system will regularly organize relevant departments to discuss issues regarding logistic management in the city, work out promotion plans, and specify the duties of each department. The Shanghai municipal Party Committee will assess each department’s performance of their duties.
(2) Give play to the coordinating role of industrial association; promote enterprise-government communication and exchange
Industrial management and service shall be intensified through industrial association. The government shall specify the functions, roles and duties of logistic association to push it to more quickly adopt the international practices and effectively exert its role. Industrial association shall intensify self-discipline in the industry, keep firmly in mind its mission to serve the government, the industry and the enterprises, and serve as a bridge and bond between the government and enterprises, teaching organizations and research institutes. It shall also play an active role in promoting the standards, talent education and training, technology, information service, personnel certification and news service for the logistic industry.
(3) Integrate existing facilities and resources; reinforce unified planning for logistic development
Active attempts shall be made to intensify the cooperation of various transportation modes and the integration of transportation and storage in order to expand the scope of business. Macro coordination and functional integration shall be emphasized in the planning for new facilities, and rational spatial layout and functional improvement shall be enhanced for logistic infrastructure.
(4) Sort out the hierarchical relation among separate rules; improve the laws and regulations in the logistic industry
The focus of improving logistic laws and regulations remains to sort out the hierarchy, connection and progression among separate rules, so as to identify a clearly layered and solidly structured framework of logistic laws and regulations. This will provide a logical system for sustained legislative and judicial interpretation, and consequently standardize logistic activities and make logistic operation more efficient.
(5) Strengthen standardization and effective regulation; improve the operating efficiency of vehicle equipment
Steps shall be taken to strengthen market regulation and control supply and demand with the access mechanism, and an effective elimination mechanism can also ensure steady and sound market development. The industry and commerce department can re-assess the operating qualification of existing logistic enterprises by regularly renewing the operating permit. Government departments are advised to subsidize vehicle elimination, so as to expedite the development of new vehicles suitable for the professional, automated and green modern logistics.
(6) Foster large logistic groups; increase market concentration
In terms of market structure, measures shall be taken to further expand corporate scale through M&A, alliance and corporate conglomeration, so as to form a group of pillar enterprises in the logistic industry as soon as possible and increase the market concentration. According to the development trend of modern logistics, great efforts shall be made to foster market-based and professional third-party logistic enterprises, and strive to closely combine modern logistics with the flow of business, information, talent and capital, in order to forge a comprehensive service system centered on third-party logistic services.
(7) Study and formulate industrial standards consistent with international practices
Logistic standardization means the formation of a national standard system that’s consistent with international practices and the implementation of it in the industry. To be more specific, it means the formulation of technical standards for facilities, mechanical devices and special tools in the big logistic system, of working norms for packing, storage, loading and unloading, transportation and other operations, and of the criteria for logistic information that’s a prominent feature of modern logistics.
(8) Accelerate network-based and intelligent application of information
Measures shall be taken to set up, as soon as possible, the auxiliary public network for logistics (including comprehensive transportation network), well-developed storage and distribution network, advanced public information platform, vehicle GPS, and systems for freight administration, logistics tax management, customs declaration and clearance, and pre-exit inspection and quarantine. Public value-added network service platform connected with the internet shall also be established, which consists of the logistics trade information center, EDI center, e-business security certification center and financial settlement center, so as to guarantee the normal and efficient operation of modern logistic enterprises.