The logistics industry in Zhanjiang is expecting a major boost in transactions as the coastal city in western Guangdong vigorously increases its port throughput capacity.

The city received approval by the State Council last October to open two new port areas that will add 29 berths along 44,400 meters of coastline to the city.

The port area on Donghai Island is designed to serve two large projects under construction there - the Baosteel facility and a joint refining and petrochemical venture by Sinopec and Kuwait National Petroleum Co.

The dock supporting the steelmaker, which will begin operations in September, was put into use on April 20 with the berth of an Australian freighter carrying 170,000 metric tons of iron ore.

The other port area, Baoman, started a six-month trial operation of the first phase of the container terminal on the same day.

The deepwater Zhanjiang Port offers the shortest ocean transportation route from the Chinese mainland to Southeast Asia, Africa, Europe and Oceania and is the main gateway to the sea for products from Southwest China.

The latest moves to increase port throughput will help Zhanjiang attract port-based industries such as the logistics industry, said Huang Yuhua, general manager of COSCO Logistics (Zhanjiang).

A joint venture between COSCO, a major Chinese shipping and logistics services supplier, and Zhanjiang Port Group, COSCO Zhanjiang transports about half of the imported and exported cargoes to and from the port.

Besides helping clients clear their cargoes with the customs, the company also arranges the transit of imports to buyers across the country by river, truck, train or air.

It mainly carries Australian and Brazilian iron ore to steel plants in Zhanjiang and the neighboring Guangxi Zhuang autonomous region and Guizhou and Hunan provinces.

It earned 600 million yuan ($96.72 million) in profits last year, 80 percent of which came from import and export business, and expects a growth of 5 percent this year mainly because of the Baosteel project, Huang said.

"We are optimistic about a steady growth in the future as upgraded infrastructure and further opening-up will attract more manufacturers to Zhanjiang," he said.

"Besides opening new port areas, we hope the port channels can be expanded to berth vessels of 400,000 tons from the current capacity of 300,000 tons. The greater capacity can help better save on shipping costs.

"Zhanjiang should make good use of its advantage as a deepwater port to develop long-distance, heavy-load shipping," Huang said.

Strategic hub

To develop Zhanjiang into a strategic hub in China's Belt and Road Initiative, port construction, especially the expansion of port channels, should be a priority, said Zhanjiang Mayor Wang Zhongbing.

"It is necessary to expand the channels because vessel tonnage is increasing all over the world," he said.

Wang appealed for the central government to invest in channel expansion by asking for the project to be included in the country's 13th Five-Year Plan.

In addition to the new port areas, Zhanjiang is also building a bonded logistics center, the first of its type in western Guangdong. It is scheduled to open in September, according to Zhanjiang customs.

The logistics center will better enable domestic companies to expand their foreign trade and international trans-shipment through trade facilitation measures such as tax incentives and efficient services.

But the city's trade facilitation measures are not limited in the bonded area.

To raise the efficiency of customs clearances in Zhanjiang Port, the city government will set up service centers in both of the new port areas to integrate a number of functions such as port administration, customs, quarantine, border police, taxation and foreign exchange management.

Despite all the encouraging measures to further open up Zhanjiang Port, Huang of COSCO Logistics (Zhanjiang) said his company is in no hurry to expand its business because the port's economic hinterland also covers less-developed areas in Southwest China.

"We may need to wait for an economic leap in less-developed areas to give full play to the upgraded Zhanjiang Port. But we will be ready to embrace business opportunities when they come," Huang said.