Shenzhen Port Update

September 12, 2007

Andrew M. Pan

North American Representative Office of Shenzhen, China (NAROS)

2

Outline

• Overview

• Terminals: YICT, SCT & CCT

• Domestic and Global Network

• Transportation System

• Technology, Efficiency and Security

• Warehousing and Logistics Parks

• Future Development Plan

• Government Incentives

3

Overview

4

ShenzhenShenzhen

5

6

7

8

9

Serving South China

• Gateway to Pearl River Delta (PRD), China’s major

economic powerhouse and one of the world largest

manufacturing bases.

• Serving South China, a region of 2.16 million km²

area, 500 million population, US$ 1 trillion GDP, and

US$ 640.7 billion total import & export, accounting

for 23%, 38%, 34.4% and 36.4% of China

respectively.

10

Shenzhen Port:

Throughput in Past 10 Years

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

(TEU)

(Source: Shenzhen Statistics 2006)

11

World’s Busiest Container Ports

(Source: UNCTAD)

12

China’s Top 10 Container Ports

(Source: Ministry of Communications, China)

13

Terminals: YICT, SCT & CCT

14

Yantian International

Container Terminals (YICT)

15

286120166Yard Gantry

Crane

713041Quay Crane

161616Water Depth of

Waterways (m)

14-161614-16Water Depth

Alongside (m)

7,0473,2973,750Total Quayside

Length (m)

1569Deep-water

Container Berth

344136208Total Area

(hectare)

TotalExpansion ProjectPhases I, II, IIIItem

Yantian International

Container Terminals (YICT)

(8.87 million TEU in 2006)

16

Shekou Container

Terminals (SCT)

17

Shekou Container

Terminals (SCT)

821270Yard Gantry

Crane

28424Quay Crane

15.815.815.8Water Depth of

Waterways (m)

12.5-161612.5-16Water Depth

Alongside (m)

2,5503752,175Total Quayside

Length (m)

716Deep-water

Container Berth

1072186Total Area

(hectare)

TotalExpansion ProjectPhases I, II, IIIItem

(3.87 million TEU in 2006)

18

Chiwan Container

Terminals (CCT)

108Yard Gantry

Crane

35Quay Crane

13.5-16Water Depth of

Waterways (m)

14.5-16Water Depth

Alongside (m)

3,100Total Quayside

Length (m)

9Deep-water

Container Berth

125Total Area

(hectare)

TotalItem

(5.26 million TEU in 2006)

19

Domestic

and

Global

Network

20

The Liner Companies Berthing

at Shenzhen Port

21

58

3

3

17

18

5

12

CCT

913South America

TotalSCTYICTDestination

77

1

1

7

27

38

44

0

1

23

9

10

168 (11)*

4

5

47

49 (5)*

54 (6)*

Africa

Total

Australia

Asia/Middle East

Europe

North America

Frequent Sailings to Global

Destinations

(* The sailings of the same course line of the same liner company berthing at two or more terminals)

22

• Domestic Network

16 domestic course

lines

25 South China

shuttle service lines

21 Hong Kong

shuttle service lines

23Transportation System

24

Land Transport

• The sophisticated highway system to help integrate

the port with highways to satisfy transport demands

between the port and the hinterland of the PRD.

• Roads already constructed and still under

construction around the terminals totaling a length of

95 miles by 2010.

• Another US$ 4 billion to be invested into highway

system in 10 years.

25

Shenzhen Highway System

26

100,00062010Guangshen Riverside Expressway

100,0006In serviceYanpai Expressway

100,0006In service107 Highway

100,0006In serviceMeiguan Expressway

100,0006In serviceGuangshen Expressway

50,0004In serviceWutongshan Tunnel

25,0004In serviceHuiyan Expressway

100,0006Early 2008Second Access to Yantian

50

6

Two-directional Lanes

775,000Total

100,000In serviceYanba Expressway

Traffic Capacity

Per Day (PCU)*

Current StatusLand Transport

Infrastructure

(*PCU-passenger car unit. One container truck is equivalent to about 3 PCU)

Land Transport Traffic Capacity by 2010

27

Inter-Modal Transport

• Inter-modal transport with Pingyan Railway and PingnanRailway, the dedicated rail facilities connecting Shenzhen Port.

• Both railways joining Beijing-Guangzhou Railway and Beijing-Kowloon Railway via Guangzhou-Shenzhen Railway, extending port services to other places in the PRD and the inland areas of China, even the east and central Europe.

In service

In service

Current Status

2.931.3Pingnan Railway

512.5Pingyan Railway

Traffic Capacity

(mil. ton)

Length

(mile)

Railway

Infrastructure

28

Shuttle Service

29

Technology, Efficiency and Security

30

Technology

• Next generation “Terminal Operation Management

System”.

• Easyport (www.easyport.com.cn) – a Port Community

System.

• Radio Data System (RDS) – a Port Communication

Skynet.

• Port Community Card (PCC) – automatic gatehouse

operation system.

• E-seal, RFID and Weighbridge.

• Stable, safe and secure IT system.

31

Efficiency

• The cutting-edge technologies increase the operation

efficiency.

• Simplified and expedited declaration process.

– Vessel pre-inspection allows immediate handling upon

arrival.

– Pre-declaration for import laden and empty containers.

– International trans-shipment cargo can be released upon

arrival.

– X-ray machine for cargo inspection takes only 3 minutes to

inspect one container.

32

Efficiency

• Experienced port operators have achieved average quay

crane rate of 3535 moves per hour.

33

Security

• Facility Security – ISPS Compliance

• Container Security– Non-Intrusive Inspections

(NII): X-ray machine, Life detector, Carbon dioxide detector, Metal detector, and CCTV

• Supply Chain Security– E-Seal

– Radio Frequency Identity (RFID)

– Global Positioning System (GPS)

34Warehousing and Logistics Parks

35

Warehousing Facilities

• Customs supervisory

warehouses

– About 9 million square ft on

site or near terminals

(existing)

• Bonded warehouses

– About 2 million square ft on

site (existing)

• Free trade zone warehouses

– About 6 million square ft in

Futian Free Trade Zone

(existing)

36

Logistics Parks in Shenzhen

• Bonded logistics park

– Occupying 0.96 square km of

land, Yantian Bonded Logistics

Park will build an estimate of 15

million square ft warehouses by

2010

• Logistics parks

– 6 parks (including Yantian

Bonded Logistics Park), 2 hubs

in planning or under

construction

37

Airport Logistics

Park

Airport Logistics Airport Logistics

ParkPark

Qianhai Logistics

Park

QianhaiQianhai Logistics Logistics

ParkPark

Pinghu Logistics

Park

PinghuPinghu Logistics Logistics

ParkPark

Longhua Logistics

Park

LonghuaLonghua Logistics Logistics

ParkPark

Sungang-Qingshuihe

Logistics Park

SungangSungang--QingshuiheQingshuihe

Logistics ParkLogistics Park

Yantian Bonded

Logistics Park

YantianYantian Bonded Bonded

Logistics ParkLogistics Park

Longgang

Distribution Hub

LonggangLonggang

Distribution HubDistribution Hub

Bao’an

Distribution Hub

BaoBao’’anan

Distribution HubDistribution Hub

Logistics Parks in Shenzhen

38Future Development Plan

39

10.6

13.6

16.7

18.6

20.4

22.4

24.9

0000

5555

10101010

15151515

20202020

25252525

2003200320032003 2004200420042004 2005200520052005 2006200620062006 2007E2007E2007E2007E 2008E2008E2008E2008E 2009E2009E2009E2009E

Shenzhen PortShenzhen PortShenzhen PortShenzhen Port

E = Morgan Stanley Research estimates

(Source: China Port Association, Morgan Stanley Research)

Forecast for Shenzhen Port

Unit: Mil. TEU

40

Expansion Projects

• YICT Phase IV Project

– 6 berths

– 1.7 million TEU per year

capacity

• YICT Phase V Project

– 9 berths

– 6.64 million TEU per year

capacity

• SCT and CCT expansion

projects

– 9 bulk berths

– 1 cruise berth…

41

New Project:

Da Chan Bay Terminals

42

Da Chan Bay Terminal One

7Deep-water

Container Berth

2,430Total Quayside

Length (m)

15.5-18Water Depth

Alongside (m)

112Total Area

(hectare)

108Yard Gantry

Crane

26Quay Crane

15.5-18Water Depth of

Waterways (m)

TotalItem

– Terminal One is under construction

and to be put in service in early 2008.

– Another 3 terminals with 8 container

berths will be built by 2013.

43

Government Incentives

44

Incentives for Shenzhen Port

and Logistics Development

• Up to US$ 500K relocation subsidy and office rental discount to shipping companies setting up regional headquarters or operation center in Shenzhen.

• Up to US$ 650K bonus to liner companies adding a new international, domestic or shuttle course line with certain criteria met.

• Up to US$ 400K relocation subsidy and other financial support to international logistics companies and freight forwarders setting up regional headquarters in Shenzhen.

• Bonuses to shipping companies or agents transferring laden containers to Shenzhen Port for export.

• Subsidies to inter-modal transport operators.

Thank You!

For more information, please contact North American Representative Office of Shenzhen,

China (NAROS).

Add: 350 South Figueroa Street, Suite 288

Los Angeles, CA 90071, USA

Tel: 213-628-9888 Fax: 213-628-8383

E-mail: andrewpan@shenzhenoffice.org

Web: www.shenzhenoffice.org