Experts believe that there is a need for reforms in the shipments of cargos carried by the China-Europe express trains, popularly known as the China Railway Express after customs-clearance issues were discovered. The reforms will secure the efficiency of the services in the long run and it is expected to attract more shipments.
Traders are diverting routes and customs clearing posts to other Eastern Europe countries to avoid import duties and value-added taxes on their cargos which raised concern that an EU crackdown that might alter the shipment volumes and increase trading costs.
According to a manager of a Dutch logistics company in an interview with the Global Times, some of their shipments sent via the China-Europe cargo trains had to submit more documentation to local customs offices in Hungary.
The manager admitted that they are giving gifts to Hungarian customs staff to close some seals including fixed duties on certain products or shorter customs-clearing periods. The manager claimed that, recently, customs officers are verifying more items for a declaration like the duties that are now charged on actual sales prices of imported products rather than the agreed price.
Jan Streefland, CEO of Netherlands-based logistics firm via Europe, told the Global Times on Wednesday that lots of shipments have been re-routed from main hubs such as London and Amsterdam to Eastern Europe, mainly the Czech Republic and Hungary, to avoid paying import duties and value-added taxes because of legal loopholes.
According to Jack Yan, vice president and head of Europe & Mediterranean Business Unit at Chinatrans Intl, regulated customs-clearance procedures will decrease the uncertainty of the shipments and improve the service level which will, in the long run, be beneficial for Chinese exporters and logistics companies.
The primary trader of the route according to Zhao Junjie, a research fellow at the Chinese Academy of Social Sciences' Institute of European Studies, is China. Other countries including Portugal and Spain are also planning to participate.
Zhao claimed that the increase in the volume of cargo is bound to attract the attention of European regulators who will step up supervision. He also noted that Chinese enterprises should adapt to standardized operations.
Experts claimed that the customs issues show the European Union's need to strictly supervise the shipments, need to cut tariffs, avoid protectionism, and promote trade facilitation with China.
The China Railway Express is an initial move for the proposed Belt and Road initiative (BRI) which aims to intensify the trade between China, Europe, Southeast Asia, Africa, and the Middle East.
