Connecting the Belt and Road through sea-rail collaboration

doi:10.15302/J-FEM-2017031

Front. Eng

2017, Vol. 4

Issue (3) : 315-324 https://doi.org/10.15302/J-FEM-2017031

RESEARCH ARTICLE

Connecting the Belt and Road through sea-rail collaboration

Chenhao ZHOU¹(

), Haobin LI¹, Wencheng WANG², Loo Hay LEE¹, Ek Peng CHEW¹

¹. Industrial Systems Engineering and Management, National University of Singapore, Singapore
². School of Management Shanghai University, Shanghai 200444, China

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Abstract

As part of China’s “the Belt and Road” strategy, China Railway Express provides alternative shipping routes and transportation modes from Asia to Europe and creates new opportunities for intermodal transportation in the shipping industry. A time–distance-based cost (time cost) function was proposed to compare China Railway Express with traditional transportation modes. Time cost was related to different types of cargoes, which exhibit distinct sensitivity to time. Using the proposed cost function as basis, we identified the cost indifference area where total costs are equal. Further analysis was performed for selecting the transportation mode and supply area for a specific cargo. This study provides various parties, such as business owners, the government, and the shipping industry, with many valuable insights.

Keywords China Railway Express the Belt and Road shipping industry combined transportation

Corresponding Author(s): Chenhao ZHOU

Just Accepted Date: 29 August 2017 Online First Date: 28 September 2017 Issue Date: 30 October 2017

Cite this article:

Chenhao ZHOU,Haobin LI,Wencheng WANG, et al. Connecting the Belt and Road through sea-rail collaboration[J]. Front. Eng, 2017, 4(3): 315-324.

URL:

https://academic.hep.com.cn/fem/EN/10.15302/J-FEM-2017031
https://academic.hep.com.cn/fem/EN/Y2017/V4/I3/315

Tab.1 Index of Manufacturing Industry Migration from 2003 to 2009

Tab.2 Timing and cost comparison between different transportation modes (Source: Port of Xiamen)

Fig.1 ASEAN investment on a growth momentum (billions of USD)

Fig.2 Illustration of two transportation modes

Tab.3 Setup costs by sea and rail

Cargo	Value of cargo per TEU (,000 $)	Time cost factors
Plastic box	328	$ρ 1 = 0.014 %, ρ 2 = 0.014 %, ρ 3 = 0$
Clothing	7,296	$ρ 1 = 0.014 %, ρ 2 = 0.014 %, ρ 3 = 1 %$
Electronic blender	936	$ρ 1 = 0.027 %, ρ 2 = 0.027 %, ρ 3 = 3 %, t' = 35$

Tab.4 Time cost for different cargoes

Tab.5 Shipping distance, time, and price by rail

Tab.6 Shipping distance, time, and price by sea

Fig.3 a-cost plots for three cargoes

Tab.7 Total transportation cost reduction of RSCT by reducing the sea shipping time

Reducing sea shipping time (day)	Plastic box (Non-time-sensitive cargo)	Clothing (High-time-sensitive cargo)
Reducing sea shipping time (day)	Range of $α 0$	Clothing (High-time-sensitive cargo)	Average difference
2	0.78–0.84	- 1.6%	$α 0$ is larger than 1. Thus, CRE is still preferred
4	0.76–0.82	- 3.2%
6	0.75–0.81	- 5.1%

Tab.8 Sensitivity of a by reducing sea shipping time

Fig.4 Illustration of two alternative transportation modes

Fig.5 a-cost plots for three cargoes in ST and SRCT

Reducing sea shipping time (day)	Plastic box (Non-time-sensitive cargo)	Clothing (High-time-sensitive cargo)
Reducing sea shipping time (day)	Plastic box (Non-time-sensitive cargo)	Range of $α 0$	Average difference
2	$α 0$ is larger than 1. Thus, sea transport is still preferred	0.71–0.76	1.8%
4		0.72–0.79	3.9%
6		0.73–0.80	5.8%

Tab.9 Sensitivity of a by reducing the sea shipping time

ASEAN	Association of South-east Asian Nations
C	Cost indifference area
CRE	Chinese Railway Express
D	Destination area of the sea and rail transport
FDI	Foreign direct investment
O	Origin area of the sea and rail transport
RSCT	Rail-sea combined transportation
RT	Rail transportation
S	Supply area for a specific cargo
SRCT	Sea-rail combined transportation
ST	Sea transportation
TEU	Twenty-foot equivalent unit
$C m$	Total transportation cost of shipping mode $m ∈ {R T, R S C T, S T, S R C T}$
$T m$	Total transportation time of shipping mode $m$
$C F m$	Freight cost
$C T m$	Time cost
$C S m$	Setup cost
$d r, d s$	Rail/sea distance between O and D
$d S D r, d S D s$	Rail/sea distance from S to D
$p r, p s$	Unit freight cost by rail/sea (USD per TEU per km)
$ρ 1, ρ 2, ρ 3$	Time cost factors, including the cost of service, transit inventory risk, and obsolescence
$c p$	Value of cargo (USD)

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