China’s State Council has just released the final and detailed three-year plan with the core task to shift more cargo transportation to rail and water from trucks, which is expected to contribute to Beijing’s all-out drive for atmospheric quality improvement over 2018-2020.
The document entitled “Three-year
(2018-2020) Work Plan on Transportation Structure Adjustment” was signed off by
the Stated Council on September 17 but was only available online on October 9,
spells out the request for the first time that
all iron ore and coke transportations at the coastal ports including Tangshan
and Huanghua should be handled via rail or water in principle by the
commencement of the winter heating for the 2020 winter. The residential housing
heating service normally starts on November 15.
The plan requests that coal deliveries to the major ports in the Bohai Bay area, with Huanghua and Tangshan ports in North China’s Hebei province, East China’s Shandong province, and the Yangtze River Delta must be shifted to rail or water by the end of 2018, which is in line with the guidelines issued by the Ministry of Ecology and Environment in late September but with a wider scope by enveloping the Yangtze River Delta area.
Other than these, the
State Council also requests clean-energy trucks to be over 50% of the
newly-added logistics service fleet nationwide by 2020 with the ratio at an
even higher 80% for crucial areas, according to the plan.
For this initiative, the key areas
are 13 including Beijing, Tianjin, Henan, Hebei, Shandong, Shanxi, Shaanxi,
Liaoning, Inner Mongolia in North China and Shanghai, Jiangsu, Zhejiang and
Anhui in the Yangtze River Delta area, which cover all the core coal and steel
production bases in China.
With all the efforts, China
targets to achieve the results such as increasing the handling volume of all the goods including
industrial and consumers goods via rail by 1.1 billion tonnes/year and 500
million t/y via water by 2020, or up 30% and 7.5% respectively from 2017,
and reducing the bulk commodity transportation via trucks at the coastal ports
by 440 million t/y by 2020.
The plan, though to enhance efficiency
and to save costs on top of air quality improvement ultimately by reducing the
diesel fuelled-trucks on the road, may experience chaos and complaints from the
involved parties in the early stage of the implementation, market sources commented.
“We have been negotiating with the
local railway bureaus, but so far we have not agreed on the service charges
yet,” an iron ore procurement official from a Shandong-based steel mill said.
Besides, “we have to match our
schedule with the availability of cargo trains, and cost will definitely be
higher than trucks especially for short-distance deliveries,” he added. The
mill is located around 100 km from the Rizhao port in Shandong, which is more
convenient and cost-effective for trucking.
An official from a steel producer in
Tangshan, Hebei province, shared similar challenges.
“We have our rail line linking our
plant to ports, but we seldom engage it, maybe 10% of our total raw material
transportation, as moving materials via rail will cost 50% more than our trucks
fuelled by liquefied natural gas trucks,” he explained, adding, though, that
when rail transportation become the compulsory and only mode of transportation,
these matters will be smoothed out.
Beijing is making efforts to
support the transfer, among which are simplifying the procedure to review and
approve mills’ own railway construction, proposing float pricing mechanism for
short-distance deliveries and increasing the frequency of cargo train services,
Mysteel understands.
Written by Olivia Zhang, zhangwd@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com