Enhanced shipping capability contributes to China's auto exports

China's auto exports hit 4.91 million units in 2023, according to statistics released by the China Association of Automobile Manufacturers.

From surpassing 1 million units in 2012 to exceeding 2 million in 2021 and 3 million in 2022, China's auto exports rocketed past 4 million units in just the first 11 months of 2023. This rapid growth reflects the increasing globalization of the Chinese auto industry. It is also inextricably linked to China's improved logistics capabilities.

A batch of vehicles is about to be exported at the Taicang International Container Terminal in east China's Jiangsu province, Jan. 14, 2023. (People's Daily Online/Ji Haixin)

Ocean shipping, China-Europe freight train service, and road transportation are the common methods of exporting automobiles, with ocean shipping being the most popular. The Taicang port in east China's Jiangsu province is exactly a good example.

Located on the southern bank of the Yangtze River, 60 kilometers away from the estuary, the Taicang port was bustling. Semi-trailers from all directions lined up at the entrance of the port, loaded with various brands of vehicles.

Next to the berth of a vessel of China COSCO Shipping Corporation Limited at the Taicang International Container Terminal, a 40-meter-high gantry crane was loading containers onto the vessel's cargo hold. This vessel was about to set sail for Europe a day later.

Hao Yong, the on-site supervisor for vehicle shipping at the terminal, said that about 7,000 to 8,000 vehicles were shipped monthly from the terminal last year, with the peak reaching nearly 30,000 units in December.

The roll-on/roll-off (RoRo) auto terminal Haitong Taicang Terminal features higher efficiency. The currently operational storage yard at the terminal, which houses 20,000 standard parking spaces, is still not enough to meet the rapidly growing business volume.

"The yard will be full again just a few days after a batch of cars is shipped, " said Wang Haibo, the manager on duty of the control center of the logistics company that runs the terminal.

According to him, the terminal is still under construction, with an investment of over 2 billion yuan ($281.16 million). Once fully operational, it will have an annual throughput capacity of 1.3 million vehicles, Wang added.

The "tight parking space" at the storage yard reflects the bustling activity at the port. According to statistics from the customs of Nanjing, capital of Jiangsu province, 397,300 vehicles were exported from the Taicang port in the first 11 months of 2023, up 157 percent year on year.

The surge in auto exports has also led to rising demand for RoRo vessels. Improving efficiency through digital and intelligent upgrading, shipbuilders are working in full capacity to meet this demand. In the first half of 2023, China Merchants Jinling Shipyard delivered 21 RoRo vessels, and the company's order book is full with deliveries scheduled all the way until 2027.

New energy vehicles hold a prominent position in China's auto exports. In 2023, China exported 1.203 million units of new energy vehicles, marking a remarkable 77.6 percent year-on-year growth.

A vessel carrying China-manufactured vehicles leaves the Yantai port in east China's Shandong province, Jan. 10, 2024. (People's Daily Online/Tang Ke)

It is learned that new energy vehicles must maintain a battery charge level between 20 percent and 50 percent during long-haul transportation. Therefore, there must be charging facilities on board. Additionally, specialized fire prevention systems, fire detection equipment, and fire-resistant materials are required to mitigate risks such as battery leakage, short circuits, and fires.

At a terminal of the Taicang port, a vessel of COSCO Shipping Specialized Carriers Co., Ltd. departed for South America, carrying 2,797 new energy vehicles. Inside the cargo hold, each vehicle was monitored by an infrared temperature imaging device. Once the temperature exceeded a certain threshold, the sprinkler system would be activated to ensure the safety of transportation.

An executive from COSCO Shipping Specialized Carriers Co., Ltd. said that, in response to the requirements for transporting new energy vehicles, the company has collaborated with designing institutes and shipyards to enhance the structural strength of cargo holds.

"Currently, we have over 30 multi-purpose vessels capable of transporting new energy vehicles," the executive noted.

Meanwhile, the shipping industry is expediting its transition towards a green and low-carbon approach. It is reported that COSCO Shipping Specialized Carriers Co., Ltd. has ordered 24 large dual-fuel liquefied natural gas (LNG) vehicle carriers. China Merchants Jinling Shipyard, on the other hand, has equipped its RoRo vessels with LNG tanks and hybrid battery technology to reduce the emission of toxic gases.

According to estimates, compared to traditional fuel-powered container ships, these dual-fuel ultra-large container ships can lower carbon emissions by 20 percent, nitrogen oxide emissions by 85 percent, and sulfur emissions by 99 percent, significantly reducing environmental pollution.

In order to cultivate competitive advantages in automobile exports, various regions and business associations in China have facilitated cooperation between automobile and shipping companies and guided them in signing medium to long-term agreements.

In the first half of 2022, SAIC Anji Logistics Co., Ltd., a wholly-owned subsidiary of Chinese carmaker SAIC Motor specializing in automotive logistics business, ordered two dual-fuel vehicle carriers with a capacity of 7,600 vehicles and three ships with a capacity of 7,800 vehicles from Jiangnan Shipyard. It also established a joint venture automotive supply chain company with COSCO Shipping Specialized Carriers Co., Ltd. and other partners.

In 2023, Chinese automobile manufacturer Chery, in collaboration with Wuhu Shipyard, built a production base for vehicle carriers in Weihai, east China's Shandong province. The base will focus on the production of carriers with a capacity of 6,000 vehicles, 80,000-ton Panamax bulk carriers, among other leading products.

Car makers becoming ship owners is a reflection of the continuous growth and internationalization of the Chinese automotive industry. Similarly, ship companies that embrace customized orders will also find new avenues to enhance their strength and expertise in the high-end market.