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Shanghai and Yangshan Bonded Terminals

At the mouth of the Yangtze, where the river meets the East China Sea, lies the giant city of Shanghai. Shanghai’s geographical location, its historical importance as a coastal port and its role as China’s industrial, commercial and financial centre have been well documented. For decades, it has been the powerhouse of the Chinese economy. In shipping terms, it is one of the world’s most important ports, as well as a centre for pricing, trading and other shipping-related services.

Shanghai’s ascent to the status of the world’s largest cargo port is only an indication of what it is capable of achieving in future. In 2007 it recorded a throughput of 560m tons, retaining its position as the world’s leading cargo port for the third consecutive year. In the same year, it shifted 26.15m teu, and in the process overtook Hong Kong to claim second place in the global container rankings. In 2008 it is expected to replace Singapore as the world’s largest container port.

Fuelled by China’s spectacular rise as a trading giant over the past two decades, Shanghai has consistently dominated its major rivals in terms of volume growth. For example, in 2007 its container throughput increased by 20.4 per cent year-on-year, while Hong Kong’s throughput of 23.99m teu represented an increase of just 1.9 per cent and Singapore’s 27.9m teu was up 12.7 per cent on the previous year.

However, while Shanghai has benefited hugely from a large and dynamic economy, it has had to struggle to overcome a number of natural disadvantages. Prominent among these was a notorious sandbar situated at the mouth of the Yangtze. The sandbank was nicknamed ‘Lan Men Sha’, literally ‘the door-blocking shoal’. With a natural water depth of just 6 metres, it was only at high tide that 20,000 dwt loaded ocean-going vessels could pass this point.

Dredging work has been ongoing since the late 1990s to tackle this and troublespots. Another problem concerns the location of Shanghai itself. Despite its name, which in Chinese means ‘above the sea’, Shanghai has always been a river port. New quays have had to be built to accommodate ever larger vessels.

In 1992, construction work started on a container terminal at Waigaoqiao, to the northeast of the city centre on the Yangtze estuary. Waigaoqiao remains Shanghai port’s main container harbour and it was simply not large enough to cope with soaring container demand. Moreover, even with a newly dredged draught of 12.5 metres, Shanghai was still unable to accommodate loaded container vessels of 4,800-8,000 teu in all weather conditions. As the vessels used in international shipping grew ever larger, its port planned a second major move – this time to Yangshan, a pair of islands situated between the East China Sea and the Yellow Sea.

Actually located in Zhejiang province, in the northeast of Hangzhou Bay and 27.5km from the Luchaogang area of Shanghai’s southeastern Nanhui district, Yangshan is the closest spot to the city with a natural water depth approaching 20 metres. This massive US$12bn project, to be completed by 2020, will contain 50 berths and will have an annual capacity of 25m teu, more than Hong Kong’s entire 2007 throughput.

The first two phases have been completed, comprising a total of nine berths and an annual designed capacity of 4.3m teu. Phase three, which will add seven new berths, is designed to bring Yangshan’s container throughput capacity to 15m teu. A crude oil and liquefied natural gas terminal are also to be built on the islands, while an LNG terminal is expected to commence operations in 2009.

In June 2005, the State Council granted Yangshan bonded terminal status. The first facility of their kind in China, Yangshan Bonded Terminals enjoy all the preferential treatment accorded to export-oriented processing zones and bonded zones, and they now aim to facilitate international transhipments, supply and procurement, and export-oriented processing. Yangshan is by no means a perfect solution to Shanghai’s old problems. For example, the lack of a rail line on the East China Sea Bridge could be a bottleneck in the making.

Another major concern is the number of days in the year that the bridge can remain open. Dense fog in the spring and autumn months reduces visibility considerably, while typhoons in July and August are another threat to the bridge’s normal functioning.

More information on Shanghai port and the importance of the city in the development of the entire Yangtze can be found in Chapter 10 of Yangtze Transport: Accessing China's Interior.
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