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Belt and Road – Understanding China’s logistics vision

China's Belt and Road Initiative is realised through the Eurasian Landbridge and the Maritime Routes.
Belt and Road Initiative

Connecting 4,000,000,000 People

From the first wave of globalisation and its position as a global manufacturing hub, the Chinese government has moved to acquire infrastructure assets abroad to support the development of roads, railways and ports in other countries.

It was no surprise when President Xi Jinping announced in 2013 that the country is going to attempt one of its most ambitious infrastructure projects to date. The Belt and Road Initiative, which is worth an estimated $1 trillion, is set to impact 65 countries and boost ties between more than 4 billion people.

The new Silk Road

Chinese and global development banks and several private investors have ploughed vast sums of funding into a series of railway ‘belts’ and maritime ‘roads’. The plan builds on existing trans-Siberian land routes and revives the ancient Silk Road, connecting Europe, the Middle East and China. There are also plans to upgrade existing maritime trade routes, from South East Asia to East Africa, into Southern Europe and link all of it together using an intermodal hub-and-spoke model.

Rail links from European transport hubs, including London, to Chinese cities including Wuhan, are in operation and offer a direct service along the New Silk Road land bridge. New opportunities are also coming into play for locations like South Korea, Japan, Myanmar, Kenya and Greece. The future will likely bring smaller shipments, more often, as more regular deliveries are going to be possible along the maritime Silk Road at a greatly reduced cost.

Meshing these infrastructure plans together across such a large area will naturally take time. Studies indicate that achieving China’s vision of world-class freight and logistics routes through this number of countries, depends on their ability to meet the standards needed to provide seamless connections across borders, ports and connecting hubs.

Optimizing the Supply Chain

However, the foundations are already in place to build upon. Logistics companies offer direct rail services to and from China, via the Eurasian land bridge. Rail transport is an alternative when other freights are too expensive or taking too long to arrive at their destination.

With shorter distances to cover, the rail connection delivers an efficient service and is particularly useful for time-sensitive cargo. Rhenus offers fixed departure schedules and transit times are therefore reliable, so companies using this route can increase their planning reliability and optimize their supply chain. It brings benefits for sending and receiving goods, and as well brings advantages for those countries who are part of the infrastructure – bringing them closer together and driving economic growth.

With the promise of investment from China, this network now looks set to develop further, no doubt providing an even more efficient and reliable service. The Belt and Road Initiative is an ambitious project, but in many ways, it encompasses many of the key trends in modern logistics – intermodal transport, closer collaboration, faster services and the ability to wrap it all together to benefit the end customer.

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