Another step forward for the Silk Road Economic Belt just occurred as China just signed on to the United Nation's TIR transit system, which enables authorized transporters to export goods through the EU and other member states by road without being subjected to customs inspections or duties en route.
This means that a container can go through exit customs in China and then not have to go through any additional checks until it arrives at its final destination in any member state and vice versa. As this agreement now includes 70 parties, which cover the bulk of the Eurasian land mass, this has made shipping products overland to or from China by road a more streamlined process.
TIR stands for Transports Internationaux Routiers, or International Road Transports. It is a basic acronym for a multilateral treaty overseen by the United Nations Economic Commission for Europe (UNECE) that was signed in Geneva in 1975 which sought to increase the efficiency of road transport across Europe. It has since spread to Russia, Turkey, across Central Asia, and down into the Middle East. Currently, 1.5 million border crossing per year are being sped up with TIR clearances.
Although founded on road shipping, the TIR is now multimodal. Just so one part of a journey is conducted by truck, containers transported by rail, river, or sea can obtain the same customs privileges.
Being a part of the TIR treaty could greatly decrease the lead time required to ship containers between China and other member states - especially those outside of the EU and Eurasian Customs Union which still enact immigration and customs procedures at their borders.
It currently takes between 8-12 days to transport products door to door by truck between Europe and China, which is around four times faster than sea and approximately five days to eight days slower than air.
That being said, overland trade volume between China and Europe is still vastly less than ocean, consisting of just 10% of China's EU bound exports and 3.2% of exports going the other way. However, while the volumes of this overland trade are still relatively minimal the value of it is among the highest. What is being shipped on rail and road routes across Eurasia tends to be relatively costly goods like electronics, luxury apparel, car parts, premium produce, and wine.
Another major factor is that these overland routes between China and Europe have only recently been revitalized and are still in their initial stages of development. With large-scale infrastructure projects like the Western Europe-Western China Expressway, which runs from the Yellow Sea coast in China to the Baltic Sea at St. Petersburg, getting ready to come online within the next few years, emerging logistics hubs like Khorgos Gateway in Kazakhstan and Malaszewicze in Poland just getting up and running, as well as nascent industrial zones across Eurasia recently being commissioned, we could see a massive paradigm shift when it comes to overland transport across this region over the coming years.
The first stage of China's Belt and Road initiative, which aims to create a network of interconnected trade stations across Eurasia, is customs. Getting rid of the red tape to allow goods to traverse this massive land mass as efficiently as possible is key to making these routes sensible and profitable. The aim is to make land borders nearly as easy for goods to flow across as the open ocean, and this is being done step by step.