Transportation Costs and Time Impact of the China-Pakistan Economic Corridor

The China-Pakistan Economic Corridor (CPEC), which is part of China's Belt and Road plan, is a network of infrastructure, commerce, and investment projects, as well as energy and technology projects, now under construction in Pakistan and China's Western Xinjiang province. The China-Pakistan Economic Corridor (CPEC), which Pakistani officials have labelled as a "game changer," is the most recent manifestation of the two countries' increasing ties. Because they help to reduce freight prices and transit times, transportation and infrastructure are referred to as major trade levers. This research is primarily concerned with the concept of logistics shipping prices and travel times. China supplies Europe and the Middle East with a reliable, low-cost supply line. The study analyses data in a qualitative and descriptive manner. The study investigates how the CPEC will impact trade in terms of shipping costs and trip time. Transportation and infrastructure are considered critical trade issues since they help to reduce shipping costs and transit times. In order to generate revenues and assure timely product delivery, modern organizations strive to reduce shipping costs and transit times. The goal of this research is to examine the CPEC's significance and its impact on import and export costs as well as transit durations. This study also compares the current path to the suggested itinerary. The study takes a qualitative and descriptive approach to European ports of Hamburg, Le Havre, and Rotterdam, like the selected Middle Eastern ports of Jeddah, Kuwait, and Oman, which meet China's energy demands, share a considerable trading volume with China. When a 40-foot container is delivered using the current route, the variables time of travel and shipping cost are estimated in the first phase. In the third step, both current and potential CPEC routes are analysed. Because predicting the exact future road transportation cost of CPEC is difficult, the average value of current road transportation costs is used in this analysis. The findings show that shipping costs will be greatly lowered if the proposed CPEC route is implemented. Shipping costs between Kashgar and destination ports can be reduced by 36% for European ports, 50% for Jeddah and Kuwait, and 68 percent for Oman. Furthermore, the transit time from European ports to Jeddah will be reduced by 10-11 days, 15-18 days for Kuwait, and 10 days for Oman.


Objectives
The People's Republic of China is the world's second-largest economy, with about 40% of its trade passing via the South China Sea in 2017. The China-Pakistan Economic Corridor (CPEC) is a possible solution to China's goal for a quick, secure, and low-cost trade route to Europe and the Middle East. This study looks at the impact of CPEC on trade in terms of transportation costs and trip time. The purpose of this article is to comprehend the influence of the China-Pakistan Economic Corridor on transportation costs and time in general. While addressing the numerous research issues, this paper also aims to give an empirical assessment of Transportation cost and time.

Research concerns
The study's research questions are as follows: Is there a positive or negative influence on shipping prices and transit time for imports and exports?
Which route is the most cost-effective in terms of shipping and transit time?
Cost and Time analysis of 40ft container by the existing route.
Cost and Time analysis of 40ft container by CPEC route.

Significance
The China-Pakistan Economic Corridor (CPEC) is a new type of Sino-Pakistan collaboration that has the potential to improve their political and economic ties through commerce and growth. The project is strategic and economic for both China and Pakistan, and it has the potential to help South Asia to achieve regional stability.

Economic Corridor between China and Pakistan
During his visit to Pakistan in May 2013, Premier Li Keqiang suggested the China-Pakistan International Journal of Regional Development ISSN 2373-9851 2022 Economic Corridor for the first time. The planning proposal for a link between Kashgar in western China and Gwadar Port on the Arabian Sea coast in Baluchistan was approved on July 5, 2013, during the Pakistani Prime Minister's visit to Beijing. In 2015, the Chinese President paid a visit to Pakistan and signed a final deal for the $46 billion China-Pakistan Economic Corridor. In terms of physical infrastructure, CPEC consists of a network of trains, motorways, and pipelines. The Pakistani government has planned three complementing road routes: one through Baluchistan and Khyber Pakhtunkhwa, another through Punjab and Sindh, and a third spanning the entire country. The China-Pakistan Economic Corridor is a long-term strategy that will be implemented between 2014 and 2030.

The Following are the Five Main Components
1. Gwadar is number one (including the social and economic development of the port city and the Gwadar region) 2. Vitality (coal, hydropower, wind, solar, LNG, power transmission) 3. Infrastructure for transportation (roads, railways, and aircraft) 4. Industrial collaboration and investment (Gwadar Free Trade Zone and other industrial parks to be determined) 5. Any other areas of mutual interest that both parties agree on.
The China-Pakistan Economic Corridor is more than just a network of roads and railroads; it's also a collection of projects that have addressed Pakistan's energy and other needs. The overall investment in China is estimated to be around 46 billion dollars.

Description of the CPEC Route
The China-Pakistan Economic Corridor is part of the Silk Road Economic Belt, which Chinese President Xi Jinping proposed in 2013 to revitalise Asia's, Africa's, and Europe's ancient trading routes. It is a game changer in Asia, including many infrastructure projects, namely, 1. Starting in Gwadar, the western route will pass via many cities in Baluchistan, including Turbat, Panjgur, Nag, Basima, Sorab, Qalat, Quetta, and Qilla. Saifullah Arrive in Dera Ismail Khan with Zhob, then in Islamabad. Several portions of road between Gwadar and Quetta are now under construction; 2. The central line, which runs from Gwadar to Dera Ismail Khan, passing through various cities in Baluchistan, Sindh, and Punjab. Basima, Khuzdar, Sukkur, Rajanpur, Layyah, Muzaffargarh, and Bhakkar are among the cities.

Review of the Literature
The logistics and supply chain network are key to this project. Its main goal is to see how the CPEC would affect China's import and export supply chains in terms of shipping costs and transit times. The theoretical framework that establishes the significance of shipping costs and transit times in supply chain management.

Research Methodologies
The key focus and attributes in this study are the shipping cost and transit time. The China-Pakistan Economic Corridor (CPEC) is a project that will have a significant impact on shipping costs and trade transit times. This research aims to determine how the transit time and shipping cost of a 40-foot container for imports and exports from the Middle East and Europe to Kashgar have changed (western China). The methodology is divided into three sections. The first section deals with calculating current transit times and shipping prices, or how long and International Journal of Regional Development ISSN 2373-9851 2022 how much it should take for a 40-foot container to arrive at its destination ports. The second section is concerned with calculating the new proposed route's travel time and shipping costs. The final section compares the shipping prices and transit times for both routes. The study's third section allows it to analyse the cost of shipping and transit time for a 40-foot container and offer a recommendation on which route is the most cost-effective.

The First Section
In the first phase, choose the three European ports with the most imports and exports to China, as well as the three Middle Eastern ports on which China relies to meet its energy needs. This study evaluates the current transit time and shipping cost of one 40-foot container from these selected ports to Kashgar, Western China, after selecting the ports. The trip from the chosen ports to Kashgar (western China) involves a combination of sea and land. The distance between Kashgar (western China) and Shanghai seaport is designated as CR (China road), and the sea distance from Shanghai to destination ports is designated as CS (China sea distance) (China Sea). The map below depicts the present route that China uses for imports and exports.

Second Section
The study's second section assesses the proposed CPEC route's transit time and shipping costs. This route is based on both seaways and highways. The PR (Pakistan road) distance between Kashgar and Gwadar is displayed on the map below. The distance between Gwadar and PS, the destination port, is approximately 450 nautical miles (Pakistan Sea). The CPEC path is seen on the map below.
International Journal of Regional Development ISSN 2373-9851 2022

Third Section
The final section of this thesis contrasted the current route's shipping costs and transit time to the proposed CPEC route. For comparison, the data from the first and second parts are used.

Volume of Transactions with Specific Destination Nations
Understanding China's exports and imports to these countries is critical before determining the transportation time and cost. This study calculates and analyses the transportation costs and timeframes for both the existing and new CPEC routes. These routes are all backed by roads and waterways. This study chooses three nations from Europe and the Middle East based on their greatest imports and exports from China. Each country's port is picked based on the number of berths available ( Figure 4). TABLE 4 shows the various ports in Europe, the Middle East, China, and the Islamic Republic of Pakistan. The red symbol represents the European ports of Hamburg, Rotterdam, and Le Havre; the black mark represents the Middle Eastern ports of Shuwaikh, Jeddah harbour, and Salah port; the blue mark represents the Pakistani port of Gwadar; and the green mark represents the Chinese port of Shanghai.
The ports of Europe, the Middle East, China, and Pakistan are depicted in Figure 4.
International Journal of Regional Development ISSN 2373-9851 2022

Volume of exports from chosen destination countries (Atlas media OEC, 2019)
China's exports to destination countries China ranks toped in the world in terms of exports. According to data from Atlas media OEC, in 2019, the total volume of China Export is US$ 2.57 trillion. The export volume to chosen destination countries is shown in the table below.
International Journal of Regional Development ISSN 2373-9851 2022

Calculation of the Transportation Cost and Transportation Time of the Current Transportation Route
The current transportation path from Kashgar Dry Port (Western China) to the selected destination port is calculated in this section. Cost and delivery time The present route is based on land and marine routes, respectively known as CR and CS. Initially, the cargo was transported by CR from Kashgar (Western China) to Shanghai Port (Eastern China) (China Highway). In the second phase, take the CS (China Sea Road) from Shanghai Port to the designated destination port; this research only needs to add CR and CS to compute the current path from the departure port to the destination port. Line up the cost of shipping and the expected delivery date. The cost and time of shipping can be obtained from various shipping providers, but the cost and duration of road transportation must be estimated.

China Land (CR) Transportation Costs
When calculating inland transportation costs, the portion of China's land transportation cost is multiplied by the number of kilometres driven by a truck. Alternatively, the railway's average fare. According to Google Maps, the total distance of the CR part of China is about 5150 kilometer. The average cost retrieved from AW logistics is $0.50 per kilometer (AW logistics 2021).The inland transportation costs of transportation companies in different places are different, so the average transportation cost is utilize to fulfill the requirement. The calculation result shows that the inland transportation cost (road transportation cost) of International Journal of Regional Development ISSN 2373-9851 2022 China's land transportation (CR) part is about US$$2575. This means the freight price of a 40-foot container from Kashgar Port to Shanghai Port Is$2575.

China Road (CR) Transit Time
The transit time for China Road Transportation (CR) is computed by multiplying the entire distance travelled by the average truck or train speed in the area. The average speed of trucks or railways is taken from local transportation businesses such as AW Logistics, while the distance of China Land Transport (CR) is obtained from Google Maps. Trucks can attain speeds of up to 80 km/h in some locations, but in mountainous parts, the speed drops to 30 km/h or less. As a result, we decided a 40 km/h average speed to meet the requirements.

Shipping Costs (from Shanghai to the Port of Destination)
Kashgar is the point of departure in all cases (Western China). China Land Transport (CR) transports the commodities to Shanghai Port, and then China Shipping (CS) transports them to the final destination port. This study must add the transportation costs of the China Land Transport (CR) and China Shipping (CS) parts in order to compute the current transportation cost. For the calculation of China Land Transport (CR) transportation costs, see Table 11. CMA and MSC provide ocean freight in Europe, whereas CMA, MSC, China Shipping, and Hapag Lloyd provide ocean freight in the Middle East. These costs are based on the cost of shipping in August. Under normal circumstances, the tax rate will rise or fall every month, so the validity period is only for one month.

Current Route Transit Time
China Land Transport (CR) road transportation time is calculated according to Table 10, Figure 3, are also based on highways and oceans. The China-Pakistan Economic Corridor begins with a PR (Pakistan Highway) link from Kashgar (Western China) to Gwadar (Pakistan) port, and continues with a PS link from Gwadar Port to additional destination ports (Pakistan Sea Road). PS: (Pakistan Sea Route) The shipping company might provide you with a portion of the freight and transit time. The port of Gwadar has not yet been fully utilised, and no rate has been established. As a result, the port of Karachi, which is adjacent to Gwadar, is picked as an option. The distance between Karachi Port and all destination ports is nearly the same as the distance between Gwadar Port and all destination ports. On the basis of the collected data, transportation costs and transit times for PR (Pakistan Highway) are estimated.

Pakistan Land Transportation (PR) Transportation Cost
When calculating the transportation cost (transportation cost) of Pakistan land transportation (PR) part, it is obtained by multiplying the distance of Pakistan land transportation (PR) part by the average value of truck or railway cost per kilometer. According to Google Maps, the total distance of the Pakistan Land Transport (PR) part is approximately 2,800 kilometers. The average cost per kilometer is 0.50 US dollars per kilometer, and the data is retrieved from the International Journal of Regional Development ISSN 2373-9851 2022 International Joint Freight. The inland transportation costs of transportation companies in different places are different, so the average transportation cost is utilize to fulfill the requirement. The results showed that a 40-foot container arrived Gwadar from Kashgar at a price of $$1120. This means that a 40-foot container of PR (Pakistan Land) inland transportation costs US$$1120.

Pakistan Land Transport (PR) Transit Time
By dividing the total distance of the Pakistan Land Transport (PR) section by the typical truck or train speed in the area, the transportation time of the Pakistan Land Transport (PR) component can be estimated. The average speed of trucks or railways is taken from local transporters such as Combined Freight International, while the distance of Pakistan's land transport (PR) component is obtained from Google Maps (2021). In some places, trucks can reach speeds of up to 80 km/h, but in mountainous areas, the speed will drop to 30 km/h or less. Therefore, we choose an average of 40 the speed of kilometers per hour meets the requirements. Because Pakistan's law and order are not as perfect as China's, special consideration should be given to the security status of this route. Therefore, based on the above factors, the assumed average delay time for each journey is 29.1 hours. International Journal of Regional Development ISSN 2373-9851 2022

Costs of Shipping through the China-Pakistan Economic Corridor
The Economic Corridor between China and Pakistan route also includes land and sea transportation, called PR part first arrives at the port of Gwadar (Pakistan), and then arrives at other destination ports via PS. Refer to Table 17 for the calculation of Pakistan land transportation (PR) transportation cost. CMA and MSC provide part of Pakistan Shipping's (PS) European sea freight, while CMA, MSC, China Shipping, and Hapag Lloyd provide sea freight to Middle Eastern countries. These costs are based on the cost of shipping in March. The tax rate will raise or reduce every month in normal conditions (CMA, MSC, Hapag Lloyd, and China Shipping, 2021), hence the data is only valid for one month. PR and PS are seen in  International Journal of Regional Development ISSN 2373-9851 2022  Shipping time by sea is taken from CMA's online timetable. The transportation time shall be calculated from the starting point of the ship until the ship reaches the destination, and should not include the time spent in other different ports during the journey.

Outcome
This chapter briefly describes the calculation results of the previous chapters. The first section expounds the impact on import and export trade from two aspects of transportation cost and transportation time. That is to say, the first section answers the first research question of this article. In the second section, according to the transportation charge and transportation time, the current route and the China-Pakistan Economic Corridor route are compared, and suggestions for route selection are given. In the third section of this chapter, the distance between the existing line and the newly-built Economic Corridor between China and Pakistan line is compared.

The Effect on Trade
The initial purpose of this study is to determine how the China-Pakistan Economic Corridor will affect China's import and export supply chains. The China-Pakistan Economic Corridor will have an influence on both the cost and the duration of transportation. China's overall exports to particular destinations are estimated to be at 241.38 billion dollars. Total imports from selected target nations, on the other hand, are estimated to be around US$219.1 billion. According to the findings of this study, the freight for each 40-foot container imported or exported from Europe will be reduced by $1,400. The time it takes to get from Europe to the United States will be decreased by 10 to 11 days. Freight will be cut by $1700 to $2200 for Middle Eastern countries, and the transit time for each 40-foot container will be shortened by 11 to 18 days, resulting in lower transportation costs and faster delivery. The cost of imported raw materials has decreased as a result of lower shipping costs and faster delivery. Transport expenses to Europe have decreased by 36%, Saudi Arabia and Kuwait have decreased by 50%, and Oman has decreased by 68 percent. Regardless of this ratio, this analysis estimates that if the supply chain saves 10% of the total trade cost between China and the destination country, the results are the following: International Journal of Regional Development ISSN 2373-9851 2022  The table shows that all exports and imports from selected.
Destinations can save approximately US$41 billion. The China-Pakistan Economic Corridor will not only reduce transportation expenses, but it will also reduce trade transit time by around 10,000 kilometres to 11,000 kilometres due to the opening of the new China-Pakistan Economic Corridor. The products can be transported more rapidly using a shorter route. Every producer's goal is to ensure that the finished product is delivered on time to the consumer. According to the calculations in this article, the supply chain can save US$41 billion in transportation costs. Although this calculation only considers three ports in Europe and three ports in the Middle East, China can use the China-Pakistan Economic Corridor to transport all of its European and Middle Eastern trade. The China-Pakistan Economic Corridor can save billions of euros in the supply chain by dealing with countries in Europe and the Middle East. Because of faster delivery, China has acquired a significant competitive advantage and immeasurable benefits.

Transportation Costs and Times for the Current Route Compared to the China-Pakistan Economic Corridor
The second purpose of this essay is to compare the existing route's transportation costs and times to the China-Pakistan Economic Corridor route's transportation costs and times.
International Journal of Regional Development ISSN 2373-9851 2022

Transportation Cost Comparison
The As can be seen from the above table, for every 40-foot container imported from or exported to Europe, China can save approximately US$1,400. The transportation cost of the new route is about 36% lower than that of the current route. The results also show that the cost of ports in the Middle East has been reduced even more, and the cost of transportation to Oman is about 68% lower than the current cost of transportation.

Transport Time Comparison
The transit time between Kashgar (China) and the six destination ports is shown in the

On the China-Pakistan Economic Corridor, the distance between China and Pakistan is
The Pakistan Land Transport Section (PR) and the Pakistan Shipping Section (PS) of the new China-Pakistan Economic Corridor, as depicted in Figure 3, also contain road and ocean parts. The distance of the new route from the port of departure to the port of destination can be calculated by adding the Pakistan land segment (PR) and the Pakistan sea section (PS). Because Gwadar Port is still under construction, the distance between it and the destination port is calculated using the distance between Karachi Port and the destination port.

Comparison of Distance
By comparing the distance between the existing route and the China-Pakistan Economic Corridor route, it can be inferred that the transportation distance can be decreased by 10,000 to 11,000 kilometres if the new China-Pakistan Economic Corridor route is adopted. This has a significant positive impact on import and export trade, since it can assist reduce not only transportation time but also transportation costs. After the new route is completed, it may be shipped faster than before, and the transportation cost will be reduced.

Origin Port Destination port
Distance on the current route Distance along the CPEC route The KM difference

Suggest
Based on the findings of the calculations, it is easy to conclude that businesses should choose the new China-Pakistan Economic Corridor route because it is more cost-effective in terms of transportation and time. Manufacturers want to get raw materials on schedule and have finished products delivered to clients as quickly as possible, both of which are dependent on a rapid and dependable supply chain network. In the supply chain network, transportation serves a dual purpose. The transportation of raw materials for manufacture is the first stage, and the transportation of finished products for consumption is the second. Good transportation benefits in the timely delivery of raw materials and the timely delivery of completed goods to clients. Therefore, choosing a good transportation infrastructure can make transportation faster, timelier, and cheaper.

Limitations of the Study
It is difficult to collect accurate data on the cost and time involved with road traffic because the China-Pakistan Economic Corridor project has not yet been fully implemented. The shipping company's 40-foot container shipping fee is usually good for one month. Costs may fluctuate as a result of changes in several factors such as oil prices, demand, and supply. Both the proposed and existing China-Pakistan Economic Corridor routes are made up of highways and marine links. The calculation of sea transportation cost and transportation time is relatively easy, but due to the different charging levels of local transportation companies, land transportation is somewhat challenging. For the price of land transportation, obtaining data is a challenge. Due to the different road charges in different places, the road transportation fee will be different. To meet the research standards, this study takes into account the average cost of road transportation. At the same time, since Gwadar Port has not yet been opened, the nearby Karachi Port was used for research. The locations of these two ports are similar, so maritime transportation costs and transportation times are similar.

Summarize
The major goal of this research is to look at the impact of transportation costs and time on trade when the China-Pakistan Economic Corridor is implemented. Transportation is crucial in the movement of manufacturing resources and consumer goods. Faster, safer, and lower-cost products transfer is facilitated by good transportation infrastructure, which has a favourable impact on trade. The transportation business plays a critical role in the development of global trade, accounting for around 90% of all global trade. Large-scale import and export of goods is impossible without transportation. China is currently the greatest exporter and importer of products and services in the world. According to Atlas media reports, OEC's overall export volume is currently US$2.57 trillion, making it the world's largest. China ranked second in the world in terms of imports, at $1.58 trillion. Furthermore, to meet its energy needs, China imports a huge amount of oil from Middle Eastern countries. As a result, China requires a rapid, secure, and dependable alternate channel. The study's initial purpose is to determine how the China-Pakistan Economic Corridor affects imports. Each container's transportation cost will be cut by US$1,400 to US$2,200, lowering the cost of goods. This will be represented in two ways. To begin with, transportation costs have decreased, lowering the cost of China's raw material imports from various countries. Production will be able to use lower-cost raw materials. Second, the cost of energy or fuel will decrease in comparison. As a result, China's export trade transportation costs have decreased, resulting in lower product sales prices. We can also see that the China-Pakistan Economic Corridor's completion has resulted in a win-win situation for all stakeholders. Any trade is either bi-directional or multi-directional. While the new route is convenient for China, it also benefits European, Middle Eastern, and Central Asian countries. He had a large favorable impact on the economic development of Asia and even Europe, in addition to promoting China's economic development.