Effects of the ‘Belt and Road’ initiative on the wine import logistics of China

ABSTRACT

China’s Belt and Road (BR) initiative is expected to facilitate international trade between the countries involved. In this study, we review the special requirements of wine logistics and the market growth potential of wine consumption in China. A model minimizing generalized logistical costs is developed and applied to wine imports in China, so that the best candidate cities in which to locate transport gateways and distribution centers can be identified. Our analysis suggests that the most preferred gateways are Shanghai, Tianjin, Guangzhou, and Hong Kong, which all have similar delivery costs. In comparison, Beijing and Chongqing have much higher delivery costs, mainly because they do not have good access to marine transport and/or efficient domestic distribution networks. For long-distance intercontinental transport of large volumes of wine, marine shipping remains the only viable delivery mode. However, wine distribution within China extensively uses air, road, and water transport. Therefore, cities with excellent multi-modal transport services are better positioned to become wine logistics gateways. Our study also highlights the importance of value-added services and good government support, which are important factors that influence distribution costs and quality.

KEYWORDS:

• Wine logistics
• Mainland China
• Belt and Road
• maritime transport routes

Acknowledgments

This article is a revised and expanded version of a paper entitled ‘Effects of the “One Belt One Road” initiative on the wine import logistics of China’ presented at The Silk Road Economic Belt and the 21st Century Maritime Silk Road for Transportation and Global Supply Chain Conference, RMIT University, Melbourne, Australia; 1–2 December 2016.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. These corridors are the New Eurasia Land Bridge Economic Corridor, China–Mongolia–Russia Economic Corridor, China–Central Asia–West Asia Economic Corridor, China–Indochina Peninsula Economic Corridor, China–Pakistan Economic Corridor, and Bangladesh–China–India–Myanmar Economic Corridor.

2. See reports available at http://www.chinadaily.com.cn/business/2017-06/01/content_29569170.htm and https://eng.yidaiyilu.gov.cn/home/rolling/29940.htm.

3. See, for example, report at http://hkmb.hktdc.com/en/1X04CN9U/multimedia/Uncorking-Opportunities-along-the-Belt-and-Road.

4. Rail is more frequently used for beer, which is less prone to such damage.

5. Large volumes of wine are shipped to Hong Kong by air or sea, and then delivered by truck across the border to Shenzhen. Therefore, the customs clearance time in Hong Kong is also included in our study.

6. Airlines in China and some aircraft manufacturers (e.g. Airbus) use 85 kg to estimate weight per passenger (including luggage) in flight planning.

7. See, for example, this report available at the Ministry of Transport in China website: http://www.moc.gov.cn/jiaotongyaowen/201601/t20160112_1974539.html.

8. Air transport distances are compiled from http://www.gcmap.com/; marine transport distances between ports are compiled from http://www.sea-distances.org/; we do not have detailed road distances between cities, so that the great circle distances are compiled from https://www.distancecalculator.net/, which are also used to validate the air travel distances if such data are unavailable from the first website.