The New Silk Road is a project involving superlatives: China has been concluding strategic partnerships with ports, airports and railway networks in Asia, Europe and Africa, using the official title of ‘One Belt, One Road’ since 2013 to continue improving China’s position in global trade. The economic effects can already be felt since foreign trade between China and Europe is increasing continuously. The Asian country was Germany’s most important trading partner in 2020 for the fifth time in a row, according to figures from Germany’s Federal Office of Statistics. Germany is the most important European partner for China. Overall, trade between the two countries involved goods worth EUR 212.1 billion – particularly in the mechanical engineering, vehicle parts, electrical engineering and chemical sectors.
Overland traffic and maritime routes are the historical corridors in the common economic area of Asia and Europe. Because of the huge distances involved, however, airfreight is normally the number-one choice for importing companies. But which option is best suited for transporting goods between Asia and Europe?
Shipments by air are attractive because of their speed. Maritime routes benefit from low transport costs. However, both options have their disadvantages: airfreight can sometimes be very expensive; sea freight is particularly unsuitable for time-critical goods and is often subject to delays and fluctuations for delivery times. The Covid-19 crisis is also playing a major role: time-critical imports from China like protective masks, vaccines and medical equipment are in huge demand and have to be delivered as quickly as possible without delays.
Alongside this, capacity for sea and airfreight has fallen significantly and transport costs are rising in line with this. As a result, the road corridor between Europe and China is becoming increasingly important. It is true that the Covid-19 crisis has had an effect here, too, as only a limited number of trucks have been allowed to cross the border between China and Kazakhstan at times. Despite this, trucks offer a universally efficient solution with benefits in terms of transit times, freight costs and their availability for the cross-border shipment of goods.
So-called cross-border trucking is cheaper than airfreight and faster than sea freight, with transit times of less than 20 days. Trucks can transport any kinds of goods, even hazardous items and large-volume freight, which are unsuitable for shipment by air. When compared to rail traffic, the overland alternative for shipping freight, delivery times are also significantly shorter. Customers benefit from great flexibility and do not depend on airports, railway stations and seaports as pick-up and final delivery runs to and from terminals are eliminated. The departure times can also be freely selected and container availability does not play a role either.
As a result, more and more customers are viewing cross-border shipments by truck as a quick and cost-efficient solution and are including them in their annual tender procedures. One of the routes along the New Silk Road takes trucks from China to Germany via Kazakhstan, Russia, Belarus and Poland. Germany is used as an important logistics hub for Europe in order to transport goods on to other countries, e.g. to France, as a natural extension of the trading route.
Customs clearance is a significant topic when it comes to cross-border shipments of freight. The TIR Convention, which has been in full implementation in China since 2019, is extremely important: the abbreviation stands for ‘Transports Internationaux Routiers’, i.e. international shipments of goods by road – precisely those shipments that are not subject to the EU’s shipping guidelines. A truck with TIR plates is not subject to customs clearance at each border, but just in the country of origin and the destination country. This can reduce the delivery time significantly. The associated customs document is a so-called ‘carnet TIR’, which minimises the administration required for customs inspections and therefore makes it easier to handle transit traffic
The goods have to be transported in a sealed vehicle under the TIR Convention. A distinction is made between two ways of loading the vehicles: if a shipment fills all the space on board the truck, we talk about a full load or full truck load (FTL). Customers use the most direct and most cost-efficient way of transporting the goods from the loading point to the final destination or place of use – and all of this regardless of the type of product, the weight, the special requirements or the distance involved. In contrast, less than truckloads (LTLs) describe partial loads or shipments, which only fill part of a container because of their low volume. Customers’ goods are consolidated, i.e. they share the carriage with other recipients and benefit from a cheaper solution. The shipments are separated again at the destination and delivered to their final place of use. This model maximises the load factor and the efficiency of cross-border freight shipments, and reduces the environmental burden across the supply chain.
Particular demands are placed on cross-border trucking and customers should find out about them in advance. For example, dangerous goods classes 1, 6.2 and 7, i.e. explosive materials, contagious or radioactive substances, are not suitable for road transport. Certain goods are also forbidden under the TIR Convention: alcohol and products derived from it (classified under HS Code 22.07.10 and 22.08) or tobacco and products derived from it (classified under HS Code 24.02.10, 24.02.20, 24.03.11 and 24.03.19) cannot be transported between China and Europe using cross-border trucking. If customers want to use an FTL service, a certain loading capacity is necessary, e.g. when using mega tilt trucks or wing open trucks, where the sides of the vehicle can be opened like wings. Depending on the type of load, trucks with air suspension are used to prevent the risk of damage if the goods are fairly valuable or sensitive.
The key word here is ‘risk’: if customers have opted to ship goods using cross-border trucking, it is essential to select a reliable service partner. Alongside fixed, all-inclusive prices, it is especially important that the shipments are protected against all kinds of risks. GPS and CCTV monitoring can be booked as a value-added service. They provide the greatest possible transparency about the location and status of the shipment, particularly for valuable, fragile and highly volatile goods, and generally for all kinds of items.
The service provider guarantees that the container can be tracked with these features and can account for every case of access and movement. A smart lock feature also helps avert any theft of the goods. It prevents access from outside and eliminates the risk of corruption along the supply chain. The driver can then guarantee that the container has not been opened – not even when the freight has been reloaded at the border between China and Kazakhstan, when it is moved from a Chinese to a European truck.
Any competent service provider also has the necessary expertise related to customs clearance. It handles the management of this process to ensure that the deliveries take place smoothly and on time. This includes services like completing all the formalities for imports, exports and transit traffic (including registration), preparing the customs documentation and the certificates of origin as well as the inspection and clearance for the freight. Expert knowledge should also be available for shipping hazardous goods: proper documentation and compliance with exact procedures and protocols are not only necessary to avert damage to the shipment. They also prevent any threat to human life and the environment. A conscientious transport service provider trains its employees accordingly about handling and processing dangerous goods with various classifications as well as the guidelines for packing and storage.
The demand for imported and exported goods is continuing to increase, not least of all since China joined the TIR Convention. Transporting goods by road is particularly efficient in the light of the fact that the continents of Europe and Asia form a connected land mass and shipments can therefore take place along historically developed transport routes. It is absolutely clear that cross-border trucking offers customers a cost-efficient solution, which can be viewed as the most advantageous mode of transport between faster, but more expensive airfreight and even cheaper, but much slower sea freight. It ensures a time- and cost-efficient alternative, particularly during exceptional economic times, when other means of transport are unsuitable because of their restricted availability.
Cross Border Trucking - Europe
Rhenus Air & Ocean Management GmbH & Co. KG
Tel.: +49 (0) 40 369016308
Cross Border Trucking - Germany
Rhenus Freight Logistics GmbH & Co. KG
Tel.: +49 743 176 302 91
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