Accelerating Digitalization of Port Commodity Trade Helps Realize Interconnection Between Industrial Chain & Supply Chain

DigitalCFO Newsroom | 19 August 2022

Experts believed that the high-standard interconnection infrastructure for the industrial chain and supply chain could be provided by accurately depicting the changes in port commodity trade.

At the 2022 Qingdao Land-Sea Linkage Seminar held on August 15, 2022, the International Shipping Hub Development Index — RCEP Regional Report (2022), the Xinhua-SPG Port Commodity Index Report (2022), and the RCEP Seaborne Trade Index Report 2022 were released. Experts believed that the high-standard interconnection infrastructure for the industrial chain and supply chain could be provided by accurately depicting the changes in port commodity trade as well as achieving the efficient linkage among port shipping, commodities, and trade.

The International Shipping Hub Development Index (ISHDI) — RCEP Regional Report (2022) compiled by China Economic Information Service was another world-class port and shipping evaluation index launched globally, with a focus on the competitiveness elements of shipping hubs based on the Xinhua — Baltic International Shipping Center Development Index. It aims to facilitate smooth cooperation and coordinated development of hub ports.

ISHDI incorporates 17 secondary indicators dividing into 5 primary dimensions, which are infrastructure capability, operation service, network connectivity, smart & green level of ports and economic vitality of the hinterland. To study the development of the ports & hubs in the RCEP region, ISHDI project team chose 29 major shipping hubs in the members of the RCEP by scale and representativeness. As per calculation, 29 sample ports are divided into four classes, Class A-D. As the leading force, Shanghai Port and Singapore Port are Class A shipping hubs playing crucial role in the world shipping industry, Shanghai and Singapore are also the world leading shipping centers. Ningbo-Zhoushan Port, Qingdao Port, Shenzhen Port, and Busan Port were rated as Class B. These ports not only have significant advantages in infrastructure capability, network connectivity, but also have their own characteristics such as good service, leading innovation, etc.

Xinhua-SPG Port Commodity Index was jointly developed and compiled by Shandong Port Group and China Economic Information Service. It was first released in Qingdao in October 2021. And the index system included the Crude Oil Price Index, Iron Ore Inventory and Entry & Exit Index, Coke Inventory and Entry & Exit Index, Steel Billet Price Index, and Hot Rolled Coils Price Index. The Iron Ore Price Index and Coke Price Index were newly released this time, forming a comprehensive monitoring system covering the iron ore and coke commodity prices, inventories, and entry & exit states in ports of Shandong Port Group. According to the planning, the categories involved in the later index system will be further enriched, and the coverage will also be extended to other ports along the coast, gathering more information on advantageous cargo types of the ports.

The RCEP Seaborne Trade Index Report 2022 took the 14 member countries except for Laos of the RCEP as the research objects and selected six major categories of cargo, including container cargo, iron ore, coal, petroleum products, LNG, and automobiles, which accounted for about two-thirds of the RCEP seaborne trade volume, as the analysis objects to reflect the annual development trend of the RCEP seaborne trade from the two dimensions — overall trade volume and seaborne trade volume. The RCEP Seaborne Trade Index was 101.1 in 2021, which had exceeded the highest level before the COVID-19 pandemic (2019). The report also pointed out that it would have a positive effect on the seaborne trade of goods in the region in the future, driving the RCEP Seaborne Trade Index to further go up, with the liberalization and facilitation of RCEP trade in goods as well as the continuous deepening of the rules for accumulation in the region of origin.

Sea transportation has been the main mode of transportation for global trade, and the ports are its hubs and bridges. Huang Youfang, Council Chairman of the 8th China Institute of Navigation and Vice Chairman of China Federation of Logistics & Purchasing, believed that as the digital information link, the release of the three upgraded indexes would enhance the status of ports as international shipping hubs, guide the hub ports to achieve smooth cooperation, and help global ports and shipping optimize resource allocation and achieve sustainable development.