(Yicai) March 25 -- The first international road shipment under the Greater Mekong Subregion framework has recently departed from China’s Guangdong-Hong Kong-Macao Greater Bay Area. By eliminating the need to change vehicles during transit, the agreement significantly reduces both transport times and costs.

This new land route to Southeast Asia cuts the transportation time by over 30 percent and trims logistics costs by about 15 percent, the Shenzhen Qianhai Comprehensive Bonded Zone said on its WeChat account on March 23, citing the companies involved.

The key to this model is the use of the Agreement on Facilitating Cross-border Transport of Goods and People under the GMS framework, which was launched by the Asian Development Bank in 1992. It covers six countries and regions within the Lancang-Mekong River Basin, namely Cambodia, Laos, Myanmar, Thailand, Vietnam and China.

Goods are sealed in containers at the point of departure and stay sealed all the way to their final destination. There is no need to change trucks during transit, effectively solving long-standing issues with traditional multimodal transport, such as repeated loading and unloading at border ports, time-consuming and labor-intensive processes as well as higher risk of damage.

“This first shipment carried high-value electronic components. Transportation time was cut by over 30 percent and logistics costs dropped around 15 percent,” said Sun Jialin, general manager of Shenzhen Qianhai Yufei Warehousing, a company that specializes in the supply chain management of electronic products, where timing and security are crucial.

“Not needing to change vehicles maximizes the safety of precision electronic components and greatly improves capital turnover, giving us more confidence to expand into Southeast Asian markets,” Sun said.

Companies using this new ‘bonded goods + GMS transportation’ model can complete the export process for Less than Container Load, when a shipment is too small to fill a whole container, and customs clearance within the Qianhai Comprehensive Bonded Zone in advance, and also benefit from tax rebates upon entry into the zone, according to a Shekou Customs official. Goods can then be shipped directly overseas by GMS trucks, easing cash flow pressure and improving supply chain competitiveness and flexibility.

Editor: Kim Taylor