Effects of the ‘Belt and Road’ initiative on the wine import logistics of China

Abstract

ABSTRACTChina’s Belt and Road (BR) initiative is expected to facilitate international trade between the countries involved. In this study, we review the special requirements of wine logistics and the market growth potential of wine consumption in China. A model minimizing generalized logistical costs is developed and applied to wine imports in China, so that the best candidate cities in which to locate transport gateways and distribution centers can be identified. Our analysis suggests that the most preferred gateways are Shanghai, Tianjin, Guangzhou, and Hong Kong, which all have similar delivery costs. In comparison, Beijing and Chongqing have much higher delivery costs, mainly because they do not have good access to marine transport and/or efficient domestic distribution networks. For long-distance intercontinental transport of large volumes of wine, marine shipping remains the only viable delivery mode. However, wine distribution within China extensively uses air, road, and water transport. Therefore, cities with excellent multi-modal transport services are better positioned to become wine logistics gateways. Our study also highlights the importance of value-added services and good government support, which are important factors that influence distribution costs and quality.