Piles of containers are stacked at Ningbo-Zhoushan Port, the world's largest port by cargo turnover [Photo/IC]

The Port of Shanghai, the world's largest port by TEU (twenty-feet equivalent unit) volume has announced it will cooperate with the Ningbo-Zhoushan Port, the world's largest port by cargo turnover, in the development, operation and management of the northern part of Small Yangshan port area, which could significantly boost the efficiency of cargo transit on the Yangtze River and lower costs. 

The port area is located in Small Yangshan Island, Shengsi county, Zhoushan, East China's Zhejiang province.

The operators of the two ports, Shanghai International Port Group (SIPG) and Zhejiang Seaport Group, reached an agreement on Tuesday to cooperate on the comprehensive development of the northern Small Yangshan area.

According to the agreement and an announcement by SIPG last October, Zhejiang Seaport Group will invest 5 billion yuan ($744.5 million) in Shanghai Shengdong International Container Terminals Co Ltd, a wholly-owned subsidiary of SIPG. Following the investment, SIPG will hold 80 percent of the JV, with Zhejiang Seaport Group retaining the remaining 20 percent.

Up to 70 percent of Shanghai port's throughput comes from the Yangtze River Delta region, and nearly half of the goods in Yangshan require additional transportation by water. 

In the operational southern side of Yangshan port, no berths are set aside for feeder vessels, which has hampered its efficiency and economic performance, said Liu Ming, a deputy general manager with a logistics company under SIPG. 

"Feeder ships for regional transportation have to wait for a berth to reach their destinations, which is a waste of time and money," said Zhou Dequan, a research director from the Shanghai International Shipping Institute.