Tuesday, August 24, 2010

Breaking the Gridlock

I work at a reverse-logistics company. I'm learning a lot about the trucking industry and moving freight. It's a whole different world than anything I'd ever been exposed to before. I'm really liking it.

I sent out an email to my boss and colleagues the other day about this following story. We all got a kick out of it.

From Bloomberg:

Aug. 24 (Bloomberg) -- Chinese demand for coal to produce electricity for the world’s fastest-growing major economy is creating traffic jams lasting as long as nine days on roads connecting mines in the nation’s hinterland to its eastern ports.

Thousands of trucks were stuck along the Beijing-Tibet Expressway for as many as nine days, China Business News reported today. The blockage, which began to ease yesterday, was created by a surge in trucks carrying coal from the province of Inner Mongolia, the newspaper reported. Road maintenance since Aug. 19 has been a major cause of the congestion, the Global Times newspaper said today.

Inner Mongolia passed Shanxi province last year to become China’s biggest coal supplier after the government closed mines on safety concerns following a series of deadly accidents in Shanxi. A dearth of railway capacity connecting Inner Mongolia to port cities such as Caofeidian, Qinhuangdao and Tianjin, where coal is shipped to power plants in southern China, has forced suppliers to rely on trucks.

“The situation may ease in three or four years, when rail capacity from Inner Mongolia to Caofeidian gets upgraded and the new rail line to Liaoning province starts,” David Fang, a director at the China Coal Transport and Distribution Association, said by telephone today.

Read On

A traffic jam that is 62 miles long and has already spanned nine days. Only in China.

This story of the "expressway" outside of Beijing being plugged up is coupled nicely with this one I found on Beijing's city traffic from China Daily:

Image from Bluetechblog.com

BEIJING - Average driving speeds in the Chinese capital will likely drop below 15 km per hour in five years if the number of vehicles continues increasing while no further measures are taken, said a Beijing transport official here on Monday.

Guo Jifu, head of the Beijing Transportation Research Center, made the remark at a symposium to discuss the city's traffic problems.

He said the number of vehicles on the road increased by 1,900 per day on average in the first half year. If the growth rate continued, the total number of vehicles would hit 7 million by 2015.

He warned that the city's road networks could only accommodate 6.7 million vehicles, given the current ban keeping private cars off the road one work-day a week in the urban areas remained.

Read On
As a caveat, I heard a report this morning on NPR from Louisa Lim saying that car sales (as well as real estate) are way down over the past few months. So some of the projections on this article from China Daily may not come to fruition. But there is no denying that China's car industry has been BOOMING and will continue to grow at incredible rates into the future. And the trucking industry, highlighted by that traffic jam up above in the first article, shows just how many semi-trucks are moving freight on China's roads.

Last year, China committed a ton of its stimulus money to infrastructure. It's obvious that China is in desperate need for better roads, rails, and other means of transportation that will allow its economy to continue on the pace it's been, and will continue, growing.

Money spent on infrastructure in China is money well-spent. There have already been massive improvements - I could see them with my own eyes in the 3.5 years I spent in Xi'an from '06 to '09 - but there still need to be a lot more money invested.

As the foundation of China's transportation, and, thus, economic backbone, gets stronger, China's growth will continue to be pace ahead of the rest of the world's well into the future.

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