How Chongqing in Western China develop itself into a trendsetter of opening up (development) in inland China? Chongqing blazes new trails in a pioneering spirit, takes the initiative to explore rules for land borne trades, develops multimodal transport, and promotes opening-up by the building of international logistics corridor, in addition to going global.
Chongqing blazes new trails in a pioneering spirit, takes the initiative to explore rules for land borne trades, develops multimodal transport.
Selected as the Best Case of China (Chongqing) Pilot Free Trade Zone (CFTZ)
In July this year, Chongqing International Logistics Hub Park developed the successful financing settlement by railway bill of lading L/C, which was shortlisted in the third batch of best practice cases among the national free trade pilot zones for promotion across the country. Chongqing is the first city in China that turns consignment notes into the railway bills of lading, which is an important practice for Chongqing to explore the rules for land-borne trades. The significance is self-evident.
What is the railway bill of lading?
Luo Shuquan, Secretary of the Party Committee and Chairman of the Chongqing International Logistics Hub Park, explained that the consignment note is a shipping document and a certification of carriage. At the same time, the bill of lading is a document of title, which can be used as an attachment to an international letter of credit, and also used for bill financing because of its financial attribute. Anyone who gets it has the right to dispose of the goods listed in the bill of lading.
The bill of lading allows the holder to pick up more goods with less money with the support of good credit of financial institutions. Luo Shuquan gave an example. A company imported 100 high-end Porsche cars from Germany. If the unit price is RMB 1 million, the total cost would be RMB 100 million. This is quite a challenge for the cash flow of a company. With the bill of lading, only five percent of the total price is required to pick up one hundred percent of goods.
“In previous international trades, only sea freight has the bill of lading, and railway and road transportations only have the consignment notes.” Luo Shuquan believes that sea transportation is not the primary logistics mode of inland cities because they are neither near the sea nor the border, so they do not have an advantage in global trade.
End the history of railway transportation without bills of lading
After the China Railway Express (Chongqing) and the ILSTC were put into operation, high demands for railway bills of lading L/C were generated. This inspires Chongqing: Can we break through the international conventions, explore the rules for land-borne trades, and issue bills of lading for railway transportation?
After the China Railway Express and the ILSTC were put into operation, high demands for railway bills of lading L/C were generated.
With this idea, Chongqing began to explore the rules in many ways with the Chongqing International Logistics Hub Park as the specific operating unit.
“The first thing Chongqing did was to innovate the settlement model for railway bills of lading.” According to Luo Shuquan, Chongqing has found a Chinese-funded bank with branches in foreign countries. After long-term negotiations, the bank finally agreed to use the railway bill of lading as proof of fund settlement. In this way, the consigner will not worry about the fund settlement after using the railway bill of lading.
In addition, Chongqing also communicated with the transportation enterprises, requiring them to ensure the safety, timeliness, and integrity of the goods during the railway transportation, which eliminates the concerns of the consignees.
On December 22, 2017, the world’s first order of internationally traded goods, the automobiles imported from Germany by Chongqing Zhongji Automobile Trading Co., Ltd., settled with the railway bill of lading international letter of credit arrived at
Chongqing Railway Port by taking the China-Europe Express (Chongqing). The value of imports is about EUR 150,000.
A total of 42 railway bills of lading were issued
On March 23, 2018, a total of 12 parallel-imported vehicles that used the railway bill of lading L/C as the international settlement method arrived at the Chongqing Railway Port, marking the first time of batch applications of the railway bills of lading.
In July 2018, two parallel-imported vehicles that were settled with the railway bills of lading L/C arrived in Chongqing through the ILSTC, marking Chongqing’s success in carrying out railway bills of lading on multimodal transport and the ILSTC.
“At present, relying on the Chongqing Railway Port, a total of 42 railway bills of lading worth RMB 123 million were issued. The product categories were expanded to mechanical and electrical products, wood, milk powder, among others,” Luo Shuquan said. An increasing number of banks and transportation enterprises began to use railway bills of lading.
Innovation makes the way of opening-up wider
While exploring the rules for land-borne trades, Chongqing is also accelerating the establishment of a multimodal transport system combining water, railway, air, and road, setting records in many aspects. In recent years, a series of innovative measures have been implemented for the ILSTC railway-sea intermodal trains, such as the departure of the first customized train, the arrival of cold-chain shipping original containers, and the shipping of railway containers.
According to Wang Yupei, Chairman of CCI Eurasia Land Bridge Logistics Development Co., Ltd., these innovative services have shortened the time of cargo transportation, reduced logistics costs, and brought great convenience for imported and exported goods, making the ILSTC quickly become an international logistics corridor in the western region.
This year witnessed the departure of 1,500 China-Europe freight trains in Chongqing, and a total of 4,500 trains have been launched over the past years. By November 30, a total of 831 ILSTC railway-sea intermodal trains were launched, which is 1.19 times of the full-year target. It is expected to launch 900 trains and 1,488 trains in total by the year-end. The cargoes transported saw an increase from 240 categories in 2018 to more than 300 ones, up by 25%; the transport volume of exported goods rose steadily, with a YoY growth around 90%. The destination covers 205 ports in 86 countries and regions on six continents.
Source: Shangyou News