The Port of Tianjin (Tianjin Gang, ), formerly known as the Port of Tanggu, is the largest port in Northern China and the main maritime gateway to Beijing. The name "Tianjin Xingang"(), which strictly speaking refers only to the main seaport area, is sometimes used to refer to the whole port. The Port is located on the western shore of the Bohai Bay, centered on the estuary of the Haihe River, 170 km south east of Beijing and 60 km east of Tianjin city. It is the largest man-made port in mainland China, and one of the largest in the world. It covers 121 square kilometers of land surface, with over 31.9 km of quay shoreline and 151 production berths at the end of 2010.
Business Structure and Planning
Ownership Structure
The Port of Tianjin is a state-owned enterprise (SOE), run as an independent corporation, with separate finances and a commercial orientation. The port owner is the Tianjin Municipality People's Government (天津市人民政), through the Tianjin SASAC (Tianjin State Assets Supervision and Administration Committee—天津国有资产监督管理委员会), which is the full owner of the Tianjin Port (Group) Company (TPG). TPG's board is appointed by the Tianjin government. TPG is the effective holding company and main Port Operator, and it owns or has a stake on the majority of the Port's various operating outfits.
Since the 2009 merger, TPG's main operating subsidiary is Tianjin Port Development Co. Ltd (TPD), which in turn is the majority shareholder of Tianjin Port Holdings Co. Ltd (TPC). TPG has been injecting operational assets to TPC for several years, and since 2009 to TPD (most recently the Shihua Crude Oil Terminal). This has created somewhat of a functional division. The listed TPD, directly or through TPC, controls all terminals and direct cargo-handling operations. TPG still directly controls most of the utility, support and ancillary units related to the Port, and retains control of strategic planning. TPG is also directly or indirectly a party in 53 joint ventures
Financing and Capital Structure
TPG is a fairly large size SOE: it has been a member of the China 500 Enterprises since 2004, one of only two port operators in the list. At the end of 2011, Tianjin Port Group's assets reached CN¥ 88.8 billion (up 12% from 2010), and fixed assets were worth CN¥ 13.5 billion (up 2.1%). Yearly operating income was CN¥ 21.5 billion (up 6.7%), and total added value reached CN¥ 7.2 billion (up 14.3%) Like most SOEs, it has been attempting to diversify its sources of financing, relying more on securities and new types of debentures.
Equity: The two main operator holding companies are listed. Tianjin Port Holdings Company Limited (天津港股份有限公司) was listed as an A share () on the Shanghai Stock Exchange in 1996. Tianjin Port Development Holdings Limited (天津港发展有限公司) was incorporated in the Cayman Islands and listed as a red chip stock () on the Hong Kong Stock Exchange in 2005.
TPD (which as a Hong Kong listed company issues audited reports) in 2011 had an operating profit of out of HK$16.548 billion of revenue. As of 30 June 2012, TPD had assets of HK$34.174 billion and HK$20.713 billion of total equity. Despite healthy indicators, both TPC and TPD stock has performed weakly for the last few years, probably reflecting the market's concerns about the potentially over-expanded port industry in China.
Bonds and borrowing: As of August 2012, TPG had a credit rating of AAA according to Dagong Global Credit Rating. TPG regularly issues short-term bonds for working capital replenishment, commonly in annual emissions of (bills worth in both 2011 and 2012).
Despite elevated capital investment, the Port is not heavily leveraged. On 30 June 2012, TPD had HK$9.454 billion of consolidated borrowings for a debt/equity ratio of 0.16 and gearing ratio of 45.6%, while its liquidity is somewhat low at a current ratio of 0.9 and quick ratio of 0.84. Cash flow from operations in 2011 was HK$2.604 billion, cash at reporting date was HK$4.575 billion.
Tianjin Port Finance Company operates as the in-house financial service provider for the Group. Besides basic services as discounting of commercial notes, bill settlement and payments clearing, the TJPFC redirect funds between units of the Group in the form of loans, which circumvents the legal prohibition of direct financial transfers between members of a conglomerate.
Business Model and Strategic Planning
Business Model: During the heyday of China's export-led growth, the core task of the port (like the rest of the Chinese logistic system) was simply to provide outlets for the export sector, and inlets for their raw materials. With demand for shipping growing exponentially, the task for the Port was to keep up, increasing capability as fast as possible by expanding channels, building more berths, enhancing cargo handling capability and improving its ability to process more complex cargoes, faster.
The slowdown of global trade following the 2008 crisis, and the very magnitude of the port industry expansion, have called the sustainability of this model into question. The clear and present danger of a major glut in capacity has created in China one of the fiercest competitive environment for ports in the world: margins have deteriorated throughout the industry, and capacity has kept on growing.
The reaction by Port has been to attempt to position itself as the dominant regional hub, and accept the need to diversify the Port's productive activities into "four industries": cargo handling, international logistics, port real estate and integrated services.
Strategic Planning: Tianjin Port great advantage lies in its role as the gateway to the Beijing-Tianjin megalopolis, and more widely as the beachhead for North China. The Port is also a key player in the (immensely ambitious) planning for the Tianjin Binhai New Area and the Bohai Rim area as a whole. The stated goal of the Twelfth Five Year Plan ("12-5") is to leverage that advantage into making the Port of Tianjin into the"Northern International Shipping and Logistic Center" (北方国际航运中心和国际物流中心)This language of "international logistics center" is used by at least nine Chinese ports, as part marketing slogan, part statement of purpose about their move into advanced service provision. Shanghai refers to itself with an unqualified "International Shipping and Logistics Center", Qingdao and Dalian use "Northeast Asia International Logistics Center", referring to their desired positioning as the core transshipment centers for the region. Tianjin's usage focuses on its claims its role as headwater for a sub-region. which would serve as the hub of its hinterland in the Three Norths (三北, meaning China's Northwest, the North China Plain and Northeast), playing the lynchpin role that the Port of Rotterdam plays for the Rhine economic area.
Middle Term Plans: In expectation of a bad year for the shipping industry, TPG issued modest (compared to the recent past) growth targets for 2012: 470 million tonnes of total cargo and 12 M TEU. Long term targets remain bullish, with the 12-5 goal of reaching 560 million tonnes, 18 million TEU, 95 international container lines, 40 national cargo lines, and 100 cruises a year by 2015, an operating revenue of CN¥ 30 billion, fixed assets of CN¥ 74 billion and total assets of CN¥ 110 billion.
Long Term Plans: The long-term plans for the development of Tianjin Port are monumental in scale, consistent with the ambitious pace of change of the last decade. According to the "2010-2030 Comprehensive Plan for the Port of Tianjin", approved in late 2010, by 2020 Tianjin Port would extend from north (Hangu) to south (Dagang) for a distance of almost 90 km, with five independent shipping channels extending to the east all the way to the 23 m isobath line. By 2030, the planned land area of the Port will be 245 square km, with 200 km of quays and a staggering 390 deep-water production berths. If these plans are realized, almost the whole of the Tianjin Municipality coast will form a single, continuous port and logistic center built almost exclusively on reclaimed land, in all likelihood the largest artificial port on earth.
Port operations
The subsidiaries and partial-ownership partners of TPG are involved in all facets of port operation, including stevedoring, shipping agency, cargo handling, storage and transportation, infrastructure management, communications and information services, financial services, power supply, real estate development, health care, personnel training, education, port security, transportation, fire protection, port facilities management, environmental management, etc.
The core activity of the Port is, naturally, cargo handling and processing. As a comprehensive port, it handles all sort of cargoes, including dry and liquid bulk, general cargo, containers, vehicles, and passengers. Tianjin Port operates 365 days a year, 24 hours a day (on three shifts at 00:00–08:00, 08:00–16:00 and 16:00–24:00).
Port production
Docking terminals and wharves: As of 2011, the Port had 217 berths (including service berths); 90 berths were capable of accommodating ships over 10,000 DWT. Of these, 72 could dock ships over 50,000 DWT; 30 over 100,000 DWT, 23 over 150,000 DWT, 5 over 200,000 DWT, and 2 over 300,000 DWT.
The Port's docking terminals are operated by autonomous companies that are mostly either fully owned by, or are joint ventures with, TPC or TPD. While the 2004 Port Law allowed full foreign ownership of port facilities, TPG is still the majority shareholder of all but a few of the Port's main terminals, excepting single-company (customs type II) terminals. Additional stevedoring personnel is provided by a number of labor services companies affiliated to various operators.
Secondary wharves tend to the service, supply and maintenance ships that a complex port needs to function. These facilities range from temporary sand unloading wharves, needed for construction, to large bunkering wharves, workboat stations and the bases of the various law enforcement agencies.
Scheduling and Dispatching: The Tianjin Port Group's Operations Department (天津港集团业务部) is in charge of coordinating the productive operation of the Port, and must be informed of all ship movements and major operations. The production schedule (ship movement plan) is arranged by the TPG Dispatch Control Center (天津港集团生产调度指中心), in coordination with the wharf operators, the MSA, and the pilot center. The Dispatch Center organizes ship movements, tracks pilotage operations, and supervises terminal operations via real-time CCTV monitoring. The Dagukou port area has a separate dispatching center (天津临港经济区船舶调度指挥中心).
Foreign flag ships must engage a shipping agency, and the agency has responsibility of communicating with the Operations Department directly, giving notice of the vessel name and registration, nature of the ship, ship specifications, captain, goods type and quantity, and special needs (such as traffic diversion, tugs) 72 and 24 hours prior to arrival. Departures and in-harbor ship movements must be notified before 1130 on the day prior to movement (the planning day runs from 1800 to 1800). Emergency and short-notice movements require special permission.
Harbor Craft: The main provider of harbor craft is the Tianjin Port Tug & Lighter Company. The TTLC operates the harbor tugs, fireboats, pilot boats and other ancillary craft such as the crew boat Xinbinhai, or the sightseeing boat Xinhaimen (used for inspection and visiting VIPs). The company operates 26 harbor tugs (between 2,600 HP and 6,000 HP of power), 5 pilot ships, 7 other ancillary crafts, 2 floating cranes (120 t and 200 t capacity); and around three dozen lighters, the largest around 1,340 t displacement. The Dagusha channel is served by a subsidiary company of TTLC, the Tianjin Lingang Tug Company (天津临港拖轮有限公司), operating four tugboats.