June 2022 Newsletter

Dear members of the HVTT community,

My apologies for being this late with this June monthly letter, but on the other hand by being delayed I get the chance to include a very good piece of news: China is relaxing its Covid-related entry rules to 7+3 days of quarantine. This is an important step toward being able to live with the Corona virus and sends an important signal that China wants to be an integral part of the global society.

Transport is at the core of a functioning economy – both domestic and international – and another piece of good news is that the Chinese harbours are now operating at near to normal levels. One reason for high inflation pressure around the world has been supply chain disturbances caused by transport bottlenecks.

Continuing on the theme of good news it seems that the gradual easing of pandemic controls in China is having an immediate effect on its economy and for the first time in one year the Purchasing Managers’ Index (PMI) is above 50, which indicates economic expansion. Hopefully this will have a trickledown effect on the global economy with less bottlenecks and more stable supply chains.

A phenomenon that I have observed over the past 2.5 years of global pandemic controls is a perception that society has come to a stand-still. Our attention has been very much focused on the negative side-effects of the pandemic and recently the Russian-Ukrainian war. In the case of China strict entry restrictions aimed at limiting the risk of the virus spreading from abroad, has had as an effect that very few foreigners have been able to visit China. Consequently, the first-hand knowledge about Chinese developments in these 2.5 years is this very limited and fragmented. Company HQ have not been able to visit China, which delays strategic decision making.

This in very unfortunate because in the area of transport and logistics China has kept developing and innovating at unbroken speed. Great progress has been made in electrification, autonomous driving and intelligent connected services. Such progress also includes relevant standards and regulations.

What is of particular interest to the HVTT community is the development of High Capacity Transport and also in this field positive developments take place. It is fair to say that the two HVTT16 activities last year: the online symposium in September and the combined December exhibition and seminar in Qingdao have provided an important push for a number of initiatives that will lead to a more efficient and sustainable transport eco-system in China.

As I write this newsletter, I just came out of a meeting with an important player in the Chinese transport industry and he stated that as the technical content of transport equipment increases, so does its investment cost. Therefore, the cost of depreciation also goes up, which will give further impetus to transport companies to optimize the revenue generating time of the equipment. In short: increase the uptime by better transport flows and shorten the loading and unloading times. The latter will lead to better designed interface between vehicles and terminals and more extensive use of loading pallets.

Despite a rather negative focus about China in western media reporting and in spite of the recent travel restrictions the reality on the ground is that China as a whole and the transport space in particular is undergoing paradigm shifts. It is therefore very rewarding that we, the HVTT community, are able to offer our global knowledge and experience to those driving change in China. Even the smallest improvement in China will have global implications.

Finally, as customary, a short discussion about the weather. In the past we in Beijing used to talk about this or that blue – referring to blue skies in conjunction with some big international meeting, where polluting industries would be closed before and during an international event.  This created terms like “Olympic blue”, “G20 blue” etc.

In the past ten years the Chinese government has taken momentous steps in improving the air quality. The results have been very visible, but this spring, during the months of the most restrictive pandemic restriction, where whole industries had to close down, this time due to the pandemic, the skies were unusually blue, with unlimited visibility and with fluffy white clouds. Some people started calling this the “Covid blue” and just like in the aftermath of previous periods of (temporary) blue skies people will want this to be a permanent state. This time around another new experience was added: as restaurants were closed in Beijing people took to the streets and were having pick-nicks along rivers and green areas under blue skies and balmy spring nights. A new way of social interaction was created, which hopefully will become a new normal.

Mats Harborn

Vice President Asia