Now having the right to buy their own crude oil , it will be interesting to see what the impact will be on fuel oil storage in Singapore . In the meantime , the teapot refiners and domestic demand have fed record crude oil imports , along with China ’ s focus on building up strategic reserves . In February 2016 , China imported a record 8 million barrels of oil per day , eclipsing the US as the world ’ s largest importer of crude oil . As at late April 2016 , a record 83 VLCCs ( 12 percent of the world ’ s fleet ) were headed to China , estimated to be delivering over 166 million barrels . In the past couple of months Reuters reported that a surge in oil buying by China ’ s newest crude importers has created delays of up to a month for vessels to offload cargoes at Qingdao port , the hub for much of the supply into the teapots . China ’ s independent refiners , freed of government constraints after securing Being savvy consumers , the Chinese have been taking advantage of depressed global oil prices and buying aggressively . To date , China has filled 23 million cbm of strategic storage , which is concentrated on its East Coast . The country is now constructing an additional 21 million cbm at other strategic sites across the country . On top of this , a further 37 million cbm is planned for completion by 2020 . So with the potential to ship greater volumes of refined oil products and petrochemicals both within China and for export , tank container and road tankers logistics companies could be in a for a busy time .

Intermodal development

This should be good news for tank container operations in the country . Yet to replace the preponderance of road tanker haulage for moving refined products major changes are needed to the regulatory and business environment to develop China ’ s intermodal transport networks . A report by the World Bank found that the binding constraints behind the low incidence of intermodal services in China are most likely to be found on the supply , rather than demand , side of the equation . At the root of the challenge is the regulatory and institutional environment which regulates freight tariffs and provides little or no flexibility for China Railway Corporation ( CRC ) to tailor services to customer needs .

To replace the dominance of road tanker haulage for moving refined products major changes are needed to develop China ’ s intermodal transport networks

China ’ s containerised supply chains today make little use of rail . According to another study of figures for 2010 , only 1.3 percent of China ’ s maritime port container throughput was moved to / from ports via rail . By comparison , 85 percent of all containers handled entered or left ports mounted on truck chassis on the highways , while the remaining 14 percent used the waterways . A significant way forward would be to let CRC manage those parts of the rail logistics network in has a business rationale , like , infrastructure , network management , linehaul service , wholesale marketing and sales . But it need not control the end-to-end intermodal chain in order to be a successful participant in the intermodal system . Open areas such as retail marketing , operation of intermodal terminals , and delivery of local drayage services to the market could generate significant supply side improvements , the Bank reckons .

Currently the demand is already there , but is unable to be fulfilled due to supply-side constraints . The low incidence of containerised rail transport is at odds with the freight modal mix of countries with similar economic geography features , such as the US . And as the development of high speed rail has in effect freed up capacity for freight rail at key portions of the network , CRC is increasingly in a position to undertake supply management measures . Three key factors are likely to be critical . First is the extent to which the proposed terminal network will provide adequate coverage and sufficient capacity , including connections to international gateways like maritime ports . Second , these terminals need to be developed in conjunction with complementary logistics services , such as warehouses , container depots , and terminals for other modes . Finally , CRC would need to customise intermodal service delivery to match divergent customer needs based on factors like willingness to pay , commodity type , volumes tendered , and supply chain routing .

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