Economy

Ningbo to beef up logistics sector

By Chen Limin (China Daily)
Updated: 2010-08-10 11:16

NINGBO, Zhejiang - Mainland's second-largest port city of Ningbo plans to increase the competitiveness of its logistics industry by making it a more information-based port.

Ningbo plans to build an information platform linking 5,000 logistic companies in the city in the next three years.

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"It's like an Alibaba platform which connects all of the logistic companies in Ningbo and enables them to release information and trade on it," said Li Bao, deputy director of Ningbo Hi-Tech Industrial Development Zone.

Ningbo development zone on Monday signed a memorandum of understanding with IBM's China unit, which is going to set up a development lab in Ningbo, the fourth after ones in Beijing, Shanghai, and Xi'an.

"Only 5 percent of Ningbo's logistics companies have their own information systems while the rest are running their businesses very inefficiently," said Wang Jinghang, president of Ningbo Logistics Association.

According to industry figures, logistics costs account for 30 percent of the total costs of goods made in China, while internationally that figure is about 10 percent.

Lowering the cost of logistics and making better use of resources is "extremely important" for Ningbo, said Matt Wang, the director of IBM China Development Laboratories.

He added that the lab would focus on software development, testing, consulting and training to provide services for the city's logistics enterprises.

Overall throughput in Ningbo port reached 384 million tons last year, with a year-on-year increase of 6 percent, ranking it second among coastal ports in China.

The city's plan for the logistic industry is part of its plan to build a "smarter city" including manufacturing, financial services, the leisure industry, and logistics.

Many cities in China have been working to upgrade information processing and this has provided international IT companies with more opportunities for expansion in the country.

US-based IBM, for example, has established cooperation with various cities including Guangzhou, Kunshan and Shenyang over the past two years.