Special issue on ‘Impacts of China’s Belt and Road Initiative on maritime transport and global logistics’

Since its inception in 2013, the Belt and Road Initiative (BRI) has triggered to widely address views, debates and arguments on it among journalists, politicians, military strategists, academics and businessmen. A number of articles, papers, reports with international conferences and fora dealing with the BRI have been published over the last 7 years.

The special issue on ‘Impacts of China’s Belt and Road Initiative on global logistics’ aims to investigate the state-of-the-art understanding of the impacts of the BRI on global logistics, supply chain and maritime transportation from the perspective of academics, industry and policy-makers. Therefore, it is expected to contribute to exploring the impacts of the BRI on transport and economic corridors, maritime transportation and logistics, not to mention port supply chain, and to summarising key findings of academic papers appeared in choice international journals with key topics and methods applied. In so doing, the special issue revisits and highlights major research outcomes of the BRI.

This special issue starts with the paper entitled Research Trends in Belt and Road Initiative Studies on Logistics, Supply Chains, and Transportation Sector by Paul Tae-Woo Lee, Qi Zhang, Kamonchanok Suthiwartnarueput, Di Zhang, and Zhongzhen Yang. Lee et al. explored research trends concerning BRI studies in the field of logistics, supply chain and transportation (LST) by applying text mining method to the 190 papers taken from 71 SCI/SSCI/SCIE journals and the 198 Chinese papers from 108 CSSCI journals. The findings on the research trends in the LST field of the 190 English papers under the BRI in the period of 2013–2020 are summarised into four grand subjects, i.e. (1) maritime and intermodal transportation in association with MSR, (2) railway transportation in association with sustainability, supply chain management and cross-border issues, (3) the role of infrastructure in economic and transportation corridors, port, and railway for promoting trade and regional economy, and (4) energy supply chain development and carbon emission. The main research stream of the 198 Chinese papers is conducted for the infrastructure construction, strategy development, land transportation (railway, road), shipping transport and transshipment hub, and overseas port development along the MSR, logistics and supply chain management, industry development or industrial layout. Although the two literature groups have similar research trends, a difference between them is that the Chinese literature is more concerned with logistics and transportation infrastructure, and intermodal transportation than the English literature group, while the latter is more concerned with sea transportation sector than the former. As for the research methods adopted by the two literature groups, the 190 English papers applied quantitative method such as network model, regression and optimisation, while the 198 Chinese papers employed qualitative method more, such as case studies and policy approach. Common methods applied for both groups in order of their frequencies are network analysis, regression, optimisation, gravity model, network model and game theory under the quantitative method and case study, and interview and survey under qualitative method, respectively (see Table 9 in Lee et al. in this special issue). This first paper in the special issue has listed up all the methods adopted by the both literature groups in Supplementary Tables 5 and 6, in which it is worth noting all the methods with very lower frequency because such information could be useful to draw fresh research approach for future BRI studies.

In the second paper entitled Geopolitical Risk and Shipping firms’ Capital Structure Decisions in Belt and Road Initiative Countries by Suntichai Kotcharin and Sakkakom Maneenop, Kotcharin and Maneenop investigated the geopolitical risk (GPR) in the financial leverage choices of shipping firms in BRI countries and non-BRI countries with a panel data analysis method based on the data from 118 globally listed shipping firms. They found that the listed shipping firms lower their financial leverage as GPR increases; the impact remains substantial, even when controlling for macroeconomic factors. Furthermore, GPR is negatively associated with financial leverage decisions of the listed shipping firms from BRI countries, whereas no relationship is found in the firms from non-BRI countries. Moreover, the negative impact of GPR specific to BRI countries on the shipping firms from BRI countries is twice as large as that of global GPR. Lastly, the negative effect of GPR on capital structure decisions is more pronounced during a period of high freight rates, high GDP and no recession. One principal result is that shipping firms are more sensitive to GPR involving BRI countries. Therefore, Kotcharin and Maneenop have drawn the implications that the governments of BRI nations should consider implementing financial packages or supporting access to financial markets to these firms during high GPR to reduce its impact and that collaborative policies and the commitment of countries involved in the BRI are essential to reduce political instability. A further study is worth investigating risk and resilience involving BRI countries, which are affected by the geopolitical shocks. Lee and Yang (2018) and Wan et al. (2018) are good references dealing with such issues.

Recognising that freight block train services by China Rail Express (CRE) between China and Europe face operational problems, Laijun Zhao, Johan Stoeter, Huiyong Li, Qingmi Hu, Zhaolin Cheng and Xiaoli Wang addressed the topic of ‘European Hub Location Problem for China Railway Express’ in the context of the BRI. Multimodal collection and distribution services would then connect the hubs to the cargo origins or destinations. This would decrease transportation costs and the fixed costs of operating hubs, consequently reducing CRE’s dependence on subsidies. The paper focuses on finding the optimal location of one or several European CRE hubs and uses distance-based weighted centrality measures to determine the candidate hubs. In addition, it adds a parameter that penalises operators for not using a train’s full capacity and identifies optimal European hubs for transportation between China and Europe by CRE. The research identified 4 of the 10 candidate hubs as optimal: Berlin, Budapest, Duisburg and Lille. Among them, Berlin mainly served Central and Northern European, as well as Baltic countries. Duisburg consolidated cargo from the Low Countries, whereas Lille trans-shipped cargo from the U.K., Spain and Eastern France. Budapest collected cargos from Italy and South-Eastern Europe. And to lower the operating cost of CRE and maintain its shipping time advantage, this research developed a programming model that output an optimal multimodal hub-based network, with hubs in each of the following the four locations the above. The proposed optimal hub network centralises CRE’s fragmented operations, reduces overall cost and its dependence on subsidies, and can replace the system of infrequent point-to-point connections to providing more frequent, reliable and economical service to shippers. As a result, trade volumes along the ‘Silk Road Economic Belt’ will increase, which helps BRI invest or countries to achieve appositive return on their investment. Using distance-based weighted centrality measures to determine the candidate hubs is a novel contribution to the hub location class of problems in their research. In 2020, the Russian government has started to subsidise block trains by Trans-Siberian Railway (TSR) departing from Vostochny and Vladivostok to attract sea-rail cargoes coming from Korea and Japan. Although the subsidy for TSR has limited period and amount, competition between TSR and CRE is to be envisaged.

Since the implementation of the BRI in 2013, the investment in establishing port supply chain along the ‘New Maritime Silk Road’ proposed by Lee et al. (2018, 290–291) has been accelerated. Accordingly, it is becoming more important and necessary to determine the best port locations and to invest and design rational investment schemes. Based on the actual situation of the marine container shipping market in West Africa, the fourth paper entitled ‘Multiport Cooperative Location Model with a Safe-Corridors Setting in West Africa’ by Kang Chen, Xu Xin, Tao Zhang, and Zhongzhen Yang proposed a nonlinear programming model with equilibrium constraints to solve a ‘multiport cooperative location problem with a safe-corridors setting’ (MCLPS). In the proposed model, the shipper and the port group investor (PGI) need to expand the capacity of ports to meet the rapidly growing transportation demands, and build related safe corridors (such as protected railway lines) to deal with various security risks on the West African continent. The authors use this model with a comprehensive analysis for different security risk scenarios which can help the PGI choose the best ports to be invested, the capacity expansion goals of these ports and the design of the safe-corridors for these ports. The analysis results show that: (1) in West Africa, security risks have a non-negligible impact on the design and operation of the transportation system; (2) in all security risk scenarios, the Port of Cotonou has significant potential and investment value, giving geographical advantage for China; (3) the establishment of the safe-corridors is of great significance for improving the generalised transportation costs in West Africa the Niamey; and (4) Cotonou railway line of central West Africa presents an high investment value. Having said that, this paper contributed to drawing policy implications that China needs to find optimal amount of investment in West Africa to secure security of corridors, geographical advantage and lowering transportation costs in West Africa in the context of the BRI.

The fifth paper in this special issue deals with ‘Optimal Parameters in Concession Contracts between Container Terminal Operators and Investors’ by Yanjie Zhou and Kap Hwan Kim. It addressed the problem on how to design concession contracts between container terminal operators and an investor, which are important issues remained to be addressed in this field. The authors proposed a two-stage game model, in which the port investor proposes the parameters of the concession contract to maximise its own revenue in the first stage, and container terminal operators compete by determining terminal handling charges simultaneously and independently in the second stage to maximise their profits. In their paper, both cases with a deterministic and uncertain cargo demand were analysed. For the case with a deterministic demand, the authors modified the constraints of the profit function of container terminal operators and derived the new optimal revenue of the port invertor. For the case with uncertain demand, three types of conditions were studied, which were case with demand information uncertain to all the participants; case with a deterministic demand for terminal operators and an uncertain demand for the port investor; and case where the port investor has a larger uncertainty on demand than terminal operators. Interesting policy implications the authors drew from the findings are, among others, first, that the cargo demand uncertainty decreases the revenue of the port investor but tends to increase the profit of the terminal operators; second, that the revenue of the case with a deterministic cargo demand is the highest at the cost of the lowest profits of terminal operators; and third, that the case with a demand uncertain to all participants reduces the revenue of the port investor more than the case with an asymmetrical uncertain demand.

In summary, the key research keywords of the second to fifth papers in this special issue are addressed referring to the five clusters of keywords as shown in Table 8 in Lee et al. in this special issue. We can categorise the third paper by Zhao et al. dealing with European hub location problem for (CRE) to Cluster 2 and the fourth paper aiming to explore a safe-corridors setting in West Africa (Chen et al.) to Cluster 4, respectively. However, the second paper regarding the geopolitical risk of shipping firms in BRI countries (Kotcharin and Maneenop) and the fifth paper by Zhou and Kim in this special issue exploring port investor’s revenue model in the context of the BRI have business-oriented approach from micro-viewpoint so that the two cannot be clearly categorised into the five clusters. It means that BRI research topics will be disseminating from government, institutional investor, and industry at macro level to private sector, individual company at micro level. Therefore, it can be said that the five papers in this special issue have contributed to expanding the existing BRI literature.

Since the inception of the BRI in 2013, the BRI literature is growing in the LST field but it has still a short research history. Having said that, we cannot collect papers in Chinese and English sufficient enough to draw solid research trends in the LST field, despite a comprehensive literature review by Lee et al. in this special issue. In addition, the BRI studies in the LST field require interdisciplinary approach. Moreover, the COVID-19 and trade conflicts between China and the U.S.A. will be challenging issues in developing the BRI and consequently, they will impact on structural changes in the global logistics, supply chains and transportation field.

This special issue is indebted to the following conference organisers, i.e. Chulalongkorn University, Ocean College at Zhejiang University, and Jungseok Research Institute of International Logistics and Trade at Inha University, which organised the 4th Belt and Road Initiative Conference in association with the 9th Asian Logistics Round Table (ALRT) Conference held in Bangkok, Thailand, on 1–3 August 2019, and Chongqing University, which organised the 2nd International Conference on the Yangtze-River Research and Innovation Belt (Y-RIB) held in Chongqing, China, on 1–3 December 2019.