Why is TIR transport so popular?

Text/Reporter Guo Feiyue

On June 16, the TIR cross-border road freight line from Suifenhe, China to Moscow, Russia was officially opened. Earlier, on 26 May, the country's first IRU-certified TIR assembly centre was also launched at the Panju assembly centre in Kashgar. On 22 August last year, the first TIR transport service between China and Pakistan was launched......

TIR (Transport International Router) is a cross-border road transport logistics model based on the global customs facilitation system in the field of international cross-border cargo transportation in accordance with the provisions of the United Nations Convention on International Road Transport. Approved vehicles with a TIR licence can be easily cleared between TIR Contracting States.

The continent acceded to the TIR Convention in 2016. According to the International Road Transport Union (IRU), since the TIR Convention came into force on the mainland in 2017, 28 TIR services have been launched, and direct TIR road transport has been carried from China to more than 30 countries in Asia and Europe.

Why is TIR transport increasingly popular with logistics companies and customers?

TIR transport is more suitable for high value-added goods

In recent years, the adjustment and upgrading of the mainland's industrial structure has been deepened, structural changes have taken place in the export of goods, and the export volume of high value-added goods has continued to rise. In 2023, the mainland's exports of high value-added mechanical and electrical products will reach 13.92 trillion yuan, accounting for 58.6% of the total export value. Among them, the total export of "new three" products was 1.06 trillion yuan, a year-on-year increase of 29.9%.

High value-added goods are the main targets of TIR Transport. "TIR transport is mainly used for high-value products such as mobile phones, computers, precision instruments, etc. This type of product has the characteristics of high value and fragility. TIR transport is able to meet the needs of customers in one car without changing equipment. Recently, Li Jing, director of operations of the cross-border logistics department of Hua Pengfei Co., Ltd., said in an interview with a reporter from China Logistics and Procurement magazine.

From Made in China to Made in China, more and more logistics companies are deploying TIR transportation business. In 2021, Transfar (SCO) International Logistics Port began to explore the layout of TIR transport business, and on September 21, 2023, the TIR International Highway China-Russia special line was successfully launched.

"At present, the goods we mainly transport include but are not limited to industrial manufactured products such as forgings, displays, machinery and equipment, daily consumer goods such as candy, clothing, shoes and hats, food, fresh fruits and vegetables, and chemicals." Recently, Zhang Quanquan, business director of China Transfar (SCO) International Logistics Port, said in an interview with a reporter from China Logistics and Procurement magazine that these goods are sent to the whole territory of Russia, with an average of one flight every two days, and with the increase in capacity, daily flights can be issued within the year.

"We have now normalized the operation and built the brand products with the most frequent shipments from China and Russia TIR in the country, which can provide door-to-door pick-up services from coastal cities to the Russian factories designated by customers, providing safe and efficient logistics solutions for Chinese enterprises to enter the Russian market. Zhang fully revealed. At present, Transfar (SCO) International Logistics Port has shipped more than 80 TIR transport vehicles, with an export trade volume of more than 6,000 yuan.

Transfar (SCO) International Logistics Port is a microcosm of TIR's transport business in mainland China. According to the 2023 China TIR Transport Development Report released by the China Road Transport Association, in 2023 alone, 11 China TIR certificate holders carried out a total of 149 TIR operations through 13 inland and port customs, including 100 outbound operations and 49 inbound operations. Compared with the past five years, the number of TIR Permit holders in China and the volume of business completed have increased significantly.

"One car to the end" improves timeliness and reduces cargo damage

In addition to TIR transport, there are two types of cross-border road transport. Li Jing said that first, domestic vehicles transport goods to border ports for reloading, and then transport them to the destination through overseas vehicles. The second is to rent containers to be transported to the border port by flatbed trucks, and then exchanged for overseas flatbed trucks by hanging cabinets, and then complete subsequent transportation.

Compared to the other two ways of cross-border road, TIR transport offers several advantages. The latter not only offers the flexibility of road freight, but also has a higher timeliness than traditional cross-border road transport. The TIR system reduces the waiting time of goods at the border and increases transport efficiency through an international guarantee chain.

Compared to traditional cross-border road transport, TIR transport can be carried out without reloading or unloading, reducing transport costs and time costs. It is reported that the use of the TIR card for customs clearance, from Kashgar to Central Asia and Europe and other countries can reduce the customs clearance time by more than 30%, the customs clearance time will be reduced by 0.5 to 6 days, and the transportation cost will be reduced by 15%. "Along the way, the box is not opened or opened, and it is delivered directly to the destination, which ensures the timeliness. It takes about 7 days for our vehicle to travel from Qingdao to Moscow. Zhang Quanquan told reporters.

Compared to other types of transport, the TIR mode of transport also shows its advantages. Li Jing said for example, from Shenzhen to Moscow, the cost of the same kilogram of goods is more than 30 yuan for air transportation, while it only costs 6 or 7 yuan for truck transportation. From the perspective of timeliness, the goods transported by air are often sent to some mainstream airports, and then transported to the destination by ordinary vehicles. Overall, the time limit is about 7 to 10 days. Road transport takes 13 days, with a difference of 3 to 4 days, while the cost of cross-border road transport is about four or five times lower than that of air freight. TIR transport is 2 to 3 days faster than ordinary trucking, which can compensate for the lack of timeliness of traditional cross-border road transport.

For some fresh vegetables and other goods, TIR transport has also shown its advantages. Due to the lack of reloading during TIR transport, fresh products can be kept at a constant temperature at all times, which reduces the rate of damage to fresh goods. In addition, fresh fruits and vegetables can be transported to their destination with higher timeliness, which can relatively extend the time for fresh fruits and vegetables to be placed on the shelf. On 23 January, TIR refrigerated container vehicles were shipped for the first time in the SCO Demonstration Zone. Zhang Quanquan told reporters, "It turns out that the transportation of these fruits and vegetables takes more than ten days, and after arriving at the destination, they are placed on the shelves for about three days, and using our TIR car cold chain transportation, it takes about 7 days to arrive, which can make the placement time of fresh fruits and vegetables extend for a few days on the basis of the original three days, which is conducive to the increase of its sales." ”

Multiple opportunities to accelerate TIR transport

In recent years, the mainland has paid more attention to cross-border road transport, and has issued a series of documents, many of which relate to TIR transport. In September 2019, the "Outline for the Construction of a Transportation Power" required that the facilitation of cross-border road transport be promoted; In August 2021, the Notice on Further Deepening the Reform of Cross-border Trade Facilitation and Optimizing the Business Environment at Ports clearly stated that the Ministry of Transport, the Ministry of Commerce, the General Administration of Customs and the people's governments of various regions are responsible for "supporting the development of international road transport business based on the Convention on International Road Transport (TIR Convention) and promoting the continuous improvement of transport facilitation." ”

In addition, the continuous development of international trade has also contributed to the increase in the demand for cross-border road transport, and TIR transport has also won the favor of cross-border e-commerce merchants due to its many advantages. "In recent years, the cross-border e-commerce trade between China and Russia has developed rapidly, such as the rise of e-commerce platforms such as ozon in Russia, which provides opportunities for TIR transportation, and some sellers in mainland China are also interested in such platforms. That's why we're also actively building TIR transport routes for cross-border e-commerce operations. Zhang Quanquan told reporters.

In addition, due to the impact of international factors such as the Red Sea crisis and the conflict between Russia and Ukraine, a large number of container ships have been diverted, which not only reduces the transportation timeliness, but also soars freight rates. Affected by this, many enterprises have gradually begun to explore other supplementary capacity that can replace sea freight, and road transportation has become a new choice for many enterprises. Li Jing said, "Affected by the Red Sea crisis, the price of sea freight has risen, and the space is tight, so road transport can be used as a supplementary capacity, which objectively increases the demand for cross-border road transport." ”

It is worth noting, however, that there are still a number of issues that restrict the further development of TIR transport. "TIR transport needs to be qualified for international road transport and filed with customs, and drivers also need to apply for visas. However, the threshold for TIR drivers is high, and ordinary truck drivers are not qualified for TIR transport due to factors such as language barriers and lack of adaptability, and there is still a shortage of drivers engaged in TIR transport in the mainland. Currently, Transfar's TIR transport fleet is equipped with 65 TIR transport vehicles and more than 100 drivers are regularly trained. Zhang Quanquan said. In addition, changes in market supply and demand caused by policies and regulations, cross-border trade barriers, and fluctuations in transportation costs have also hindered the development of TIR's transport business.

It is expected to become an important carrier of the international road freight market

In the future, TIR transport will become more intelligent, green and networked. Zhang believes that with the continuous application of technologies such as the Internet of Things, big data and artificial intelligence, TIR Transport will achieve more efficient information management and intelligent decision-making. At the same time, with the increasing awareness of environmental protection and the promotion of green logistics concepts, TIR Transport will also pay more attention to environmental protection and sustainable development.

Commenting on the next step in TIR's transport business, Zhang said, "We plan to further expand our cross-border road transport network and establish strategic partnerships with partners in more countries along the route. By optimizing transportation routes, reducing transit links, improving transportation efficiency and reducing transportation costs. In addition, it actively introduces advanced technologies such as the Internet of Things, big data, and artificial intelligence, and realizes real-time monitoring, prediction and optimization of the transportation process through the construction of an intelligent transportation management system, so as to improve transportation efficiency and service quality. ”

Cross-border road transport involves multiple countries and regions, and faces a variety of complex risks and challenges. In this regard, Zhang Wenquan said that Transfar International Dry Port will strengthen risk management, establish and improve risk early warning and response mechanisms, and ensure the safety and stability of the TIR transportation process. At the same time, strengthen cooperation with the government, industry associations and other parties to jointly address the risks and challenges in cross-border trade.

It is reported that Transfar (SCO) International Logistics Port China-Kyrgyzstan-Uzbekistan TIR transportation products will be launched soon. TIR transport will also become an important direction and carrier for the future development of the international road freight transport market in mainland China. (This article was published in the 13th issue of China Logistics & Purchasing magazine in 2024)