Transport service to be rebalanced

Analysts expect demand for high-quality warehouse space will soar, helping resolve the lopsided distribution of Shanghai's logistics industry.

As demand grows, more companies will see Shanghai as a primary site to warehouse their goods.

Zhang Yanxia, a former professor at Shanghai University, said an improved logistics sector is key to making the city an international financial center.

"Singapore's current wealth is built on its role as a global logistics center. It is widely believed that to become such a hub, a city must be a center for capital flows and a financial center," Zhang wrote on his blog.

The secret of Singapore's economic miracle is its status as a logistics center, Zhang noted. The nation has a population of less than 5 million, but it hosts more than 1,000 international banks that collectively employ hundreds of thousands of staff.

Meanwhile, local companies in the Shanghai FTZ area have much catching up to do to prepare for the influx of foreign firms.

"The formal launch of the Shanghai FTZ will attract many global companies to set up their regional or China head offices in the city," said Han Jun, Party secretary of COSCO Logistics (Shanghai) Heavy Haulage Co Ltd.

He said that policies related to logistics would also be improved as the local industry hasn't been run according to international standards, resulting in some disorganization.

Logistics companies located elsewhere in the Yangtze River Delta region are also hoping for a piece of the action.

"If we find faster ways to export or import goods due to the launch of the FTZ, then we will try to move our storage area there so we can offer our foreign business partners a more direct service," said Jiang Kexing, manager of Zhejiang Hongxu International Freight Forwarder Co Ltd, which is based in the city of Yiwu in Zhejiang province.

Jiang said competition is increasing quickly as many new players are rushing into the logistics market, but the pressure should ease as costs fall and demand grows due to the FTZ's more open policies.