WHY SHFTZ / Free Trade Logistics Park

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WHY SHFTZ / Free Trade Logistics Park

Waigaoqiao Free Trade Logistics Park, located next to the port, covers 1.03 square kilometers and is the first site in China to integrate the function of functions of a bonded area and a port. That allows companies to benefit from policies in both.waigaoqiao logistics park
 
The benefits of the Shanghai Free Trade Zone (FTZ) for the logistics industry have the potential to affect all businesses that rely on moving goods to or from China. In terms of numbers, prior to their incorporation as the Shanghai FTZ, the city's four designated bonded areas were home to over 11,000 trade and logistics-related enterprises, based on CBRE figures. While the FTZ is often touted as a centerpiece in the transformation of Shanghai into a regional financial center, its promotion of the city as a logistic hub is equally if not more significant.
 
With its amalgamation of four bonded zones—the Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone—the FTZ has been shaking the traditional concentration of logistics operations in the city's Hongkou District, where more than 3,500 companies in related industries contribute roughly 28 percent of the district's GDP.
 
According to CBRE, high-quality warehousing space in the FTZ totaled 780,000 m2 in October 2013, and this figure is expected to increase by 210,000 m2 by 2015 with the completion of several high-profile projects. As of 2013 Q3, there remained a strong discrepancy in vacancy rates between logistic properties in Puxi (1.4 percent) and Pudong (22.4 percent), Shanghai's old and new urban districts, respectively.
 
The FTZ's original Framework Plan introduced the following policies in direct connection with the logistics industry:free trade logistics park
 
In terms of ship transportation, Shanghai retains a wide margin in its title as the world’s busiest port in terms of cargo volume (seven of the ten busiest are located in China). In 2013, container throughput at Yangshan Port rose 3.3 percent to a record 33.6 million TEUs, having previously surpassed Waigaoqiao Port in late 2012. As an indication of the potential for further growth in the industry, only 5.5 of cargo was classified as international transshipment, compared with over half of shipments in Hong Kong. With the simplified Customs procedures adopted in the FTZ, this imbalance is likely to correct itself over the coming years.
 
One of four bonded zones comprising the FTZ, Yangshan Free Trade Port Area offers state-of-the art facilities and exemptions on import tariffs as long as goods remain within the zone. The port features 16 modernized berths with a total quay length of 5.6 kilometers and is joined to the mainland by the 32.5 km Donghai Bridge. Expansion of the port to a total area of 14.16 km2 is to be completed by December 31, 2015, adding seven additional 50,000 to 70,000-ton berths. All companies registered before this date engaged in domestic carriage, warehousing, or loading and unloading services can obtain an immediate refund of the levied taxes.


waigaoqiao free trade logistics park
While Waigaoqiao Port remains a crucial part of the broader logistics framework of Shanghai and China, there is indication that the area has reached its saturation point, with warehouse rents significantly higher than Yangshan and little room for future construction. However, the savings on logistics costs offered by Waigaoqiao's centralized location and its one-stop shop for international freight forwarders to arrange and organize shipments will ensure that it remains a competitive alternative to Yangshan well into the future.

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