Xinhua Insight: China-Europe railway to drive cross-border e-commerce

Fifteen days after departing southwest China's Chongqing Municipality on Sept. 29, 139 parcels arrived in a processing center in Frankfurt for delivery to people across Germany.

The packages include storage boxes, stuffed toys and Chongqing local specialties. For safety reasons, they were sent from person to person, rather than as commercial goods bought online.

Though the parcels were few in number, their delivery marked the successful test of mail delivery via the China-Europe railway system. Cross-border e-commerce platforms such as DHGate.com have been notified to prepare for another test, during which their products will be sold and shipped to Russia and Germany via the railway.

UNSTOPPABLE TREND

The past few years have seen burgeoning sales in cross-border online shopping, but traditional sea and air postal routes have hampered its expansion.

China's total transaction volume in cross-border e-commerce reached 5.4 trillion yuan (810 billion U.S. dollars) in 2015, up 28.6 percent year on year, said a report issued by China e-Business Research Center.

Global trade growth has been slower than economic growth for four years, but cross-border e-commerce has grown quickly because it has reduced trade costs and streamlined the international trade chain, said Lu Pengqi, deputy head with the China Council for the Promotion of International Trade at the 19th China International Fair for Investment and Trade in September.

According to the municipal railway authority, a parcel sent from Chongqing will arrive in Germany at least 20 days faster via China-Europe regular trains than by sea. The cost is just one-fifth of that by air, making the train highly cost-effective.

However, a 1956 convention passed by members of the Organization for Co-operation between Railways (OSJD), prohibited mail delivery through international railway cargo transport. In early June 2014, the OSJD finally deleted the related clause.

When the clause was eliminated, OSJD member states began coordinating for regular railway mail service. During a postal service forum this April in Chongqing, a declaration was made to guarantee international cooperation in mail service via the China-Europe railway and to provide road routes compatible with cross-border e-commerce.

WHY CHONGQING?

Following the declaration, Chongqing became China's first pilot city approved by the General Administration of Customs to run China-Europe railway mail service in May. The Chongqing-Xinjiang-Europe regular cargo trains were later assigned to carry out the service.

Chongqing is located at the intersection of the Silk Road Economic Belt and the Yangtze River Economic Zone, two initiatives put forward by the Chinese government to boost infrastructure construction and the regional economy.

According to an official with the Chongqing Customs, as one of the earliest and most mature China-Europe railway systems, the Chongqing-Xinjiang-Europe railway transports nearly 50 percent of freight from China to Europe every year.

The import-export volume of cross-border e-commerce in the city exceeded 6 billion yuan last year, up from 60 million yuan two years ago.

The test run also highlighted innovation in management. Improved "smart" customs locks were used for monitoring parcels and facilitating clearance at departure, the transfer depot and exit. It was the first time the Chinese customs officials and postal service shared data.

The China-Europe railway mail service has adopted electronic customs clearance, rather than manual, allowing the parcels to remain unopened and stay on the same train for the entire trip.

HUGE POTENTIAL

"An unsound logistics system is the biggest barrier for the development of cross-border e-commerce," said Li Wen, general manager of a local cross-border e-commerce company. "But the China-Europe railway has the advantages of fixed operation times, fewer prohibited goods for transportation, and it is not affected by weather, which helps break the bottleneck in logistics."

There were 1,881 China-Europe cargo trains in service as of the end of June, but most China-Europe trains have long been underutilized, according to Yang Liqiong, deputy director of Chongqing Municipal Commission of Economy and Information Technology.

"International postal parcels have great potential to become a major cargo supply for the rail system," Yang said.

It is estimated that there will be around 5,000 cargo trains running between China and Europe annually by 2020, according to a development plan issued by the National Development and Reform Commission last week.

The development plan shows that the cargo train service system will consist of three routes -- an east route, a central route and a west route. The routes will not only connect China with Europe, but also with East Asia and Southeast Asia. Some 43 transport hubs will be created along the three routes and 43 railway lines will be built.

"The realization of China-Europe rail postal service means a step further in economic and cultural communication between China and Belt and Road countries," said Li Muyuan from China Communications and Transportation Association.

The postal service accords with the spirit of the Belt and Road Initiative and will promote in-depth exchanges between China's inland regions and Eurasian countries, Li said. Endi