In the just past year of 2006, relying on their strong funds, advanced logistics concepts, management technologies and human resource advantages, international logistics giants accelerated their deployment in China. In 2006 there were 3 shocking incidents in domestic logistics field: first was Netherlands multi-national logistics company TNT merged HOAU in the form of purchase. Second was that FedEx purchased the express company jointly ventured by it and DTW at the price of 400 million USD. The last was that UPS made an agreement to separate with Sinotrans at the price of 100 million USD, which is considered as the start of foreign-owned moves by insiders.

2006 Development of Loading, Unloading and Handling and Other Transportation Industry (Unit: 10 thousand USD)

In 2006 foreign companies sped up to expand in China. According to the commitment made by China when it entered the WTO, at the end of 2005 China fully opened up its logistics industry. In 2006 foreign companies accelerated the expansion of shareholding, joint venture, sole investment and merge. Chinese logistics field is becoming the hot-spot of foreign companies. The international cargo and express industry was the first one foreign companies entered. On the basis that in 2005 the reform of individually owning was gradually realized, in 2006 foreign companies sped up their deployment in China. On January 24th, 2006, FexEx announced it had signed an agreement with Tianjin DTW to purchase the 50% stake of DTW-FedEx, the jointly ventured company by both parts, at the price of 400 million USD cash. It also purchased the express network of DTW in 89 big and middle cities in Chinese Mainland. It marked the beginning of the merge of logistics enterprises in 2006.

By the end of 2006, the service network of America FedEx had covered more than 220 cities in China. It plans to cover 100 more cities in the future 4~5 years. UPS has got 6 airlines direct to Beijing and Shanghai and established agencies in more than 20 cities including Shenzhen, Qingdao and Xiamen. TNT has covered more than 200 cities in China, with more than 2,000 outlets, making China its largest market outside Europe. DHL has covered 318 cities in China and established 50 branches.

In 2006, as the market environment and facilities became mature, foreign companies entered the logistics real estate market. Prologis reached park development agreements with Beijing, Tianjin, Shanghai, Shenzhen, Nanjing, Wuxi, Dalian, Chongqing, Qingdao, Chengdu, Changsha and Jiaxing in succession. A batch of projects has been approved. A logistics stocking and distribution network covering the whole nation has been formed. Prologis’ success attracts more international logistics real estate agencies to enter China. In 2006 Australia Macquarie operated 6 large-scale logistics centers in China. In 2006 foreign investment in Chinese logistics real estate field reached up to 1 billion USD. Logistics stocking facilities of up to 1 million square meters were developed and built up. Meanwhile, foreign companies invested much in the fields like logistics of steel enterprises, automotive logistics, energy logistics and port logistics. In 2006 Japan Mitsui preliminarily completed the nationwide steel processing and distribution network in cooperation with Baosteel, Anben Iron and Steel Group and Wuhan Iron and Steel Corp.