Shippers monitor China truck strike for potential container impact

A truck travels in China.

There is no official information on the trucker dispute, but sources on the ground in China confirmed that drivers had suspended work in various provinces, such as Anhui, Jiangxi, Chongqing, Shaanxi, and Zhijiang. (Above: A truck travels in China.) Photo credit: Shutterstock.com.

Shippers in China are closely watching truck strikes, mostly confined to the inland provinces, to see whether they have any knock on impact on the transportation of containers from factories to the coastal ports.

There is no official information on the trucker dispute, but sources on the ground in China confirmed that drivers had suspended work in various provinces, such as Anhui, Jiangxi, Chongqing, Shaanxi, and Zhijiang.

Because of the sensitivities associated with industrial disputes in China, on-the-record comments were hard to find, but the China head of a global logistics provider told JOC.com that a number of local less-than-truckload drivers in Anhui and Jiangxi provinces called for a boycott of a trucking platform provider over mismanagement of their capacity.

However, he said it was having no impact on container trucking. “Worst case this may impact single LCL [less-than-containerload] shipments from very remote areas,” he said.

A manufacturer with operations in China said the strikes appeared to be taking place in Zhejiang Province, but also reported difficulties in finding information. “There is very little news about the strikes but it is not widespread and our activity hasn’t been affected,” he said.

There was an industrial dispute affecting a container port in mid-May, when the China Merchants-controlled Shantou Port between Hong Kong and Xiamen reported in an official memo that drivers from a local hauler association had suspended work in a protest regading several issues, one of which was in response to what they perceived as the poor efficiency of the port.

In May dispute, a pledge to reduce turn times 

In response, the port pledged to improve handling efficiency and service quality, adhere to foreign service commitments, and reach a goal of two-hour truck turn times.

“With China Merchant Holdings acquiring Shantou Port Terminal [China Merchants acquired the majority share in 2017], the container business has been developing rapidly, and the container business of Shantou Port will have greater development potential in the future,” the Shantou Port memo stated. “The development of Shantou Port needs the strong support of drivers and other stakeholders.”

It is not clear whether the truck strike at the port has been resolved, but a stern warning was delivered to any drivers continuing with the work stoppage.

“For those who choose to continue to strike, stop or intimidate other drivers, the public security organs will resolutely crack down on and strictly deal with them under the current situation of ‘eliminating the dark and eliminating evil’ throughout the country,” the port said, believed to be a reference to the ongoing nationwide anti-corruption crackdown.

China has a highly fragmented, competitive, and chaotic trucking industry, with its low cost accompanied by poor service levels, but small, one-truck private operators are beginning to be squeezed out by large trucking groups.

The largest of these trucking groups is Manbang Group, a truck hailing business that in April received $1.9 billion in funding from investors that include Softbank Group of Japan and Alphabet’s CapitalG. According to The Wall Street Journal, the investment would put Manbang’s valuation at more than $6 billion.

Manbang was formerly known as the Full Truck Alliance Group and provides a platform used by 5.2 million of China’s 7 million truck drivers and 1.2 million of the country’s estimated 1.5 million logistics firms.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.

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