Lower logistics costs with Euro-Sino-S'pore route

 Mr Chan Chun Sing, Minister in the Prime Minister's Office, meeting with Chongqing party secretary Sun Zhengcai in the municipality, on April 15.
Mr Chan Chun Sing, Minister in the Prime Minister's Office, meeting with Chongqing party secretary Sun Zhengcai in the municipality, on April 15. PHOTO: MTI

Up to 60% could be cut if goods are transported from Germany to Chongqing by rail and flown to Singapore

Singapore and Chongqing are piloting a new cargo transport route later this month that could lower the logistics costs of European goods arriving in the Republic by up to 60 per cent, as part of a Sino-Singapore connectivity project.

Revealing details of the plan at a seminar yesterday, Chongqing mayor Huang Qifan said European goods will be transported via the Yuxinou freight rail between Germany and Chongqing in a 12-day journey, stored in tax-free zones and sent by air to Singapore.

Mr Huang said the mixed rail-air route via the 11,000km Chongqing-Xinjiang-Europe International Railway will shave logistics costs by 60 per cent as air freight now costs five times that of rail freight, compared with the cost of transporting European goods, such as luxury products, via air to Singapore.

He added that there are plans for 50 such Europe-Chongqing-Singapore cargo trips this year and 100 next year, with the first starting on April 28. The route will also offer a cheaper alternative to Asian products going to European markets.

"If we do this well, we can also send goods to Bangkok, Kuala Lumpur, Taiwan or Hong Kong, or cities that are four to five hours' flight away from Chongqing," said Mr Huang, at the Chongqing Connectivity Initiative (CCI) Seminar in the south-western city.

HUGE POTENTIAL

If we do this well, we can also send goods to Bangkok, Kuala Lumpur, Taiwan or Hong Kong, or cities that are four to five hours' flight away from Chongqing.

CHONGQING MAYOR HUANG QIFAN , at the Chongqing Connectivity Initiative (CCI) Seminar in the south-western city.

The event was jointly organised by Singapore's Ministry of Trade and Industry and the Chongqing government, in partnership with Singapore's daily Lianhe Zaobao and the Chongqing Daily.

The one-day event drew over 200 participants from Singapore and China, mostly businessmen seeking opportunities, and officials and experts offering new ideas for the CCI, which was launched when President Xi Jinping visited Singapore last November. It is the third government-led project after the Suzhou Industrial Park in 1994 and the Tianjin Eco-city in 2008.

The CCI, whose theme is modern connectivity and modern services, has identified finance, telecommunications, aviation and logistics as its priority areas of collaboration.

Initiatives that promote modern connectivity and services within China or with other countries could come under it. Chongqing officials said last month it had a slew of some 260 initiatives worth US$115 billion (S$156 billion) suitable for the CCI.

Speaking too at the event yesterday, Mr Chan Chun Sing, Minister in the Prime Minister's Office, said Singapore and Chongqing are acting as pathfinders for China - through the CCI - in forging ways to develop its western region and finding new growth engines.

Likening Singapore and Chongqing to squirrels and the entire China to a panda that tends to move more slowly and cautiously, he added: "If the central government allows the two squirrels to run a bit faster and experiment with new policies, we can feedback the terrain forward to the panda and allow it to have a smoother and faster ride."

Mr Chan, who is Singapore's point man for the CCI, said he and Chongqing party chief Sun Zhengcai have agreed on a four-point definition of success for the project during their meeting on Friday.

They are: lowering financing costs, reducing logistics costs, raising the initiative's impact on other Chinese cities and making sure it can be replicated elsewhere.

Other Singaporeans taking part in three panel discussions at the seminar included former senior minister of state for trade and industry Lee Yi Shyan, now honorary adviser to the Singapore Business Federation.

He said one of the CCI's key aims is to internationalise Chongqing which, like other cities in western China, does not have as much interaction with the outside world as the coastal regions despite the advent of technologies and transport.

"From Singapore's perspective and experiences, policy and structural innovation is crucial for Chongqing in overtaking other cities and catching up with the coastal regions," added Mr Lee.

A version of this article appeared in the print edition of The Sunday Times on April 17, 2016, with the headline 'Lower logistics costs with Euro-Sino-S'pore route'. Print Edition | Subscribe