AS Shanghai's important port and steel area, Baoshan District has strived to ensure that it meets changing challenges. Innovations include creating a cutting-edge logistics sector, serving everything from heavy industry to cruise ships. Qu Zhi takes a voyage of discovery.

As Shanghai's northern gate on the banks of the Yangtze River, Baoshan District boasts the biggest port in the delta region, the Wusongkou International Cruise Ship Terminal.

In addition to the glamor of cruise liners, the district is also home to several other ports, including Wusong Port, Baoshan Port and Zhanghuabang Port and has an excellent transport infrastructure.

For years, Baoshan has been Shanghai's most vital port and steel center, thanks to its location and industry base created by Shanghai Baosteel Group. In 2011, Baosteel's crude steel production reached 43.3 million tonnes - the fourth-highest output in the world.

Integral to this success are services provided by the logistics sector.

In 2011, logistics enterprises within a certain scale in the district totaled more than 1,020, with operating income up to 10 million yuan (US$1.6 million).

Baoshan's logistics sector has 101 large warehouses and some 14,000 trailers, and employs 1.8 million people. In 2011, sales income totaled 11.75 billion yuan.

Last Saturday, the Sino-American Logistics Conference was held in Baoshan, with the aim of building a platform for logistics enterprise cooperation, promoting exchanges in the domestic and international logistics industry and of enhancing influence and competitiveness.

Baoshan District Party Secretary Si Fumin gave a welcome speech, outlining the goals of further development in the industry. In recent years, Baoshan has seen the transformation of a traditional logistics sector into a modern industry. A large number of old warehouses, yards and factories have been reinvented as cutting-edge facilities.

In Baoshan, the value total in the logistics sector increased from 51.6 percent in 2005 to 55.7 percent in 2011, ranking the first among suburban areas in Shanghai.

An example of this upward trend can be seen in Yanghang Town. While in the past it used to lag behind in the sector, it has now become the Shanghai Steel Logistics Business Zone. This integrates business flow, logistics, information flow and capital flow in one entity, and has been listed among the top 20 modern service industries in Shanghai.

Restructuring has also seen the establishment of the Shanghai Steel Trading Center, the Shanghai Bulk Stock Information Center, the Shanghai International Cruise Distribution Center, the Shanghai International Wine Trading Center and the Shanghai Timber Trading Center.

Among the most high-profile developments wharfside was the redevelopment of a cargo port into the Wusong International Cruise Ship Terminal. It is estimated that by 2013 the terminal will see more than 1,500 cruise ship dockings each year.

And attracting cruise ships has also created booming demand for subsidiary services in the district.

In the steel sector, Baoshan is building a modern service industry that boasts the resource allocation functions in both international and domestic markets. It is believed that this can help take the district's logistics sector to a new level.

"Baoshan is ideally positioned to retain a foothold in Shanghai while radiating through the whole of Yangtze River Delta Region providing national service, facing the world," said a government official.

Through six functions - steel information, steel trading, logistics and distribution, financial services, design and development and recycling - the district is creating a service system meeting the steel industry's needs, whether private or state-owned enterprises.

At last month's 18th Communist Party of China National Congress in Beijing, Baoshan set out its new goals - it will stick to the target of Shanghai by realizing the goal of "Four Leads and Four Centers." These are an international economic center; an international financial center; an international shipping center; and an international trade center.

It will also seek to take a lead in development, supporting independent innovation, promoting reform and opening up and building a harmonious socialist society supporting industry.

Taking advanced logistics services as its core, Baoshan intends to speed up development in the sector - in the transition to high-efficiency, high appreciation and low consumption.

This will help Shanghai become a model of a modern logistics industry, contributing to the city's core aims in international economic, financial, trade and shipping center.

Baoshan aims to see Shanghai as one of the international logistics hubs and a global supply chain management center.

Statistically, the average annual growth rate of the added value of logistics industry is around 10 percent, accounting for some 13 percent of the city's GDP.

In other initiatives, Baoshan is also establishing a bulk stock information service platform, including steel products, nonferrous metals, iron ore, coal, oil and coal chemical commodities. This platform will constitute China's main iron ore index, equipped to compete with global iron ore indexes.

It is intended that the 400-million-yuan bulk stock information center with a capacity of 5,000 people will become the world's largest commodity information platform, as well as a research platform.

Secondly, a steel trading center led by Baosteel Group will be listed by the end of the year. The center will have leading international service abilities, including online sales of steel products, material procurement, circulation of material handling, supply chain elements, and more.

The platform, owned by Shanghai Steel Trading Center, boasts a registered membership of 18,000. The annual sales volume is nearly 200 million tonnes and the transaction volume are more than 10 billion yuan.

Through upgrading the steel service industry, the center will strengthen the service levels using modern service to enhance manufacturing. Through this means, it is hoped that Baoshan District can realize coordinated development and become the leading B2B e-commerce platform for sustainable profitability.

In addition, the steel logistics distribution network can't be ignored. Shanghai Huaye International Investments Co Ltd has eight wholly owned steel-processing and distribution warehousing centers, and is moving toward a high-tech IT-led operation of its logistics through the construction of large modern steel centers.

By 2015, the company will have had 12 steel-processing and distribution centers nationwide, handling 15 million tonnes of steel annually.

With development the emerging modern service industry, including e-commerce, information services and cruise services, Baoshan's logistics industry has made significant progress.

The number of new logistic enterprises with a diversity of ownership and service models is growing rapidly. Their development well illustrates the vital role of logistics in economic restructuring.

And with support and cooperation, Baoshan intends to place more focus on creating more a eco-friendly logistics industry, in its efforts to contribute to steady and sustainable growth.