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Freight forwarding in Shanghai has become a cut-throat business and competition is fierce.

 The level of competition has driven freight forwarders to come up with innovative ways to improve their business, giving value-added services for the fees they charge.

 Gone are the days when a freight forwarder merely arranged for a shipper's goods to be transported from factory to port and collected a fat fee.

 Today's freight forwarders provide clients with a range of services including transportation, warehousing, consolidation of goods, insurance.

  They are even willing to arrange personal travel arrangements.

 To make their services more attractive, some forwarders have invested in hi-tech computer systems for better communications while others have installed track-and-trace systems to emulate services provided by express service companies like DHL, Federal Express, United Parcel Service and TNT.

 In the mainland, and particularly Shanghai, the ocean freight scene is dominated by giants like China Ocean Shipping Co (Cosco), China National Foreign Trade Transport Corp (Sinotrans), Panavico and Shanghai Jin Hai-Jet Air International Forwarding Co (JHJ).

  It is difficult to say exactly how much ocean freight exports each organisation handles as figures from the various authorities do not tally with those of the organisations.

  However, industry sources said Cosco handled 85,000 20-feet equivalent units (teu) per year, Sinotrans 75,000, Panavico 60,000 and JHJ 37,000.

 Shanghai was expected to report a 15 per cent rise in ocean freight exports this year, they said.

 JHJ deputy general manager Gu Pingpu said JHJ handled an average 2,000 teu in 1995, 3,200 last year and was expected to record 4,500 this year.

 Attempts to obtain comments from Cosco, Sinotrans and Panavico were not successful.

 In the air freight sector, JHJ claims to be the market leader as it handled an average of 4,000 tonnes a month this year.

 The freight forwarding sector is heavily fragmented due to the licensing system in Shanghai.

 Freight forwarders like Sinotrans, Cosco and Panavico which obtain 'A' licences - which allows them to provide air, land and sea forwarding services - from the Ministry of Foreign Trade and Economic Co-operation have the advantage as they can provide clients with a range of services. In all, 189 Shanghai freight forwarders had 'A' licences, the sources said.

 They said other freight forwarders who had restricted licences to carry out only air, land or sea business numbered about 3,000.

 In China, freight forwarders needed a separate licence to handle freight forwarding in different provinces.

 The sources said the competition had led to the closure or merger of smaller firms which could not compete.



Competition shakes up freight forwarders