Abstract
China is the second biggest economy in the world and almost 40% of its trade in 2016 is transported through the South China Sea. China needs a small, secure, and low-cost path to trade with Europe and the Middle East and China-Pakistan Economic Corridor (CPEC) is a feasible solution to this requirement. This research analyzes the effect of CPEC on trade in terms of transport cost and travel time. In addition, the study compares the existing routes and the new CPEC route. The research methodology consists of qualitative and descriptive statistical methods. The variables (transport cost and travel time) are calculated and compared for both the existing route and new CPEC route. The results show that transport cost for 40-foot container between Kashgar and destination ports in the Middle East is decreased by about $1450 dollars and for destination ports in Europe is decreased by $1350 dollars. Additionally, travel time is decreased by 21 to 24 days for destination ports in the Middle East and 21 days for destination ports in Europe. The distance from Kashgar to destination ports in the Middle East and Europe is decreased by 11,000 to 13,000 km.
Highlights
Transportation is the shifting of goods by truck, rail, road, and sea and is reasoned as an important indicator for economic development [1]
Countries invest in transport infrastructures like roads and rails and adequate transport infrastructure can potentially reduce transport cost and travel time
This study further addressed that intermodal transport service is essential to optimize transport cost, time, and distance for freight
Summary
Transportation is the shifting of goods by truck, rail, road, and sea and is reasoned as an important indicator for economic development [1]. The first part represents vehicles that are either van, truck, rails, airplanes, or ships and second part represents the transport infrastructure such as roads, highways, seaways, airways, and railway tracks on which transport runs smoothly. Both parts of transportation are considered as an important factor of trade and help in reducing transportation cost and travel time. Every state tries its best to discover short trade routes that can reduce trade cost and transfer time. To enhance their trade, countries invest in transport infrastructures like roads and rails and adequate transport infrastructure can potentially reduce transport cost and travel time. Transport cost and travel time are considered as the most important among all factors [2]
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