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Creative Commons licence CC BY-NC (Attribution-NonCommercial) Logforum. 2020. 16(2), article 1, 193-207; DOI: https://doi.org/10.17270/J.LOG.2020.403

THE NEW SILK ROAD: OPPORTUNITIES FOR GLOBAL SUPPLY CHAINS AND CHALLENGES FOR FURTHER DEVELOPMENT

Norbert Wagener1, Bernard Aritua2, Tong Zhu2

1Poznan School of Logistics, Poznań, Poland
2
The World Bank Group, China

Abstract:

Background: Efforts to revive the New Silk Route from Europe to Asia have been on-going since the late 1970s. However, the launch of the Belt and Road Initiative (BRI) of the PR China in 2013 has given new impetus to Europe-Asia connectivity. Between 2014 and 2018 the number of block trains between China and Europe (including Russia) increased from 298 to 4,982 per year. Will this trend continue? Which bottlenecks and challenges appear? What are opportunities for respective countries, policy makers, shippers and logistics operators? The paper contributes to the scientific question of further and sustainable segmentation of intermodal transport markets in the context of global supply chains.

Methods: Based on a literature review and interviews with logistics operators and shippers the authors analyze the present design and operational parameters of the intermodal land bridge traffic system, major challenges and bottlenecks and propose measure how to enable further growth and to improve the sustainability of this traffic.

Results: Main issues of the further development of the New Silk Road Europe China are technological innovations, digitalization of supply chains, optimizing of intermodal transport and gateway concepts, corridor management and new trading patterns with e-commerce.

Conclusions: Although this intermodal land bridge connection will likely continue to be a niche market, it offers considerable transit time and cost savings for specific types of freight where air freight is too expensive and maritime logistics is too slow. At higher freight costs compared with the sea freight and lower fares than air cargo this is especially interesting for high value cargo and the Northern provinces of China; also for opportunities in Central Asia, and the Caucasus. The new transport route promotes not only investments into production sites for export at locations in the Northern provinces but also opens  new opportunities for European exports of industrial goods and FMCG for the growing middle class in China. The total logistics costs from the viewpoint of a shipper can be more competitive via land bridge than via sea. Both production and distribution networks of large companies (e.g. BASF, HP, BMW) and small and medium sized companies (here especially through e-commerce) can benefit from a further integration of markets and globalization of supply chains.

Keywords: New Silk Road, Belt and Road Initiative, Global Supply Chains, Intermodal Transport, Digitalization, Corridor Management
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For citation:

MLA Wagener, Norbert, et al. "The new silk road: opportunities for global supply chains and challenges for further development ." Logforum 16.2 (2020): 1. DOI: https://doi.org/10.17270/J.LOG.2020.403
APA Norbert Wagener, Bernard Aritua, Tong Zhu (2020). The new silk road: opportunities for global supply chains and challenges for further development . Logforum 16 (2), 1. DOI: https://doi.org/10.17270/J.LOG.2020.403
ISO 690 WAGENER, Norbert, ARITUA, Bernard, ZHU, Tong. The new silk road: opportunities for global supply chains and challenges for further development . Logforum, 2020, 16.2: 1. DOI: https://doi.org/10.17270/J.LOG.2020.403