Since the Sino-Europe Express freight train will cross different countries in Asia and Europe, it is necessary for Wuwei's bonded logistics center to cooperate with foreign railway companies. Fang said that the center is negotiating with railway companies in Kazakhstan and Russia. "From the center to the border port, we will build broad-gauge railways compatible with those in Central Asia and Europe, which will save the time and trouble of having to reload cargo owing to the use of different tracks. With convenient transportation, we can also help Central Asian countries to export their farm products through seaports in Lianyungang or Shanghai to Japan, South Korea and Southeast Asia," he said.

On July 15, Lanzhou Comprehensive Bonded Zone, another bonded area in Gansu, gained approval from the State Council. It is a part of Lanzhou New Area, which incorporates Zhongchuan Airport and a number of railways and expressways. In the future, 19 railways crossing the zone will be constructed. It is expected to begin operating in June 2015.

Ningxia has established its first bonded area in its capital city Yinchuan in September 2013. Supporting exports and imports of halal food between China and Arabic countries constitutes the main focus of Yinchuan Comprehensive Bonded Zone. It is predicted the halal food industry output value will reach 20 billion yuan ($3.25 billion) by 2015.

Difficulties

There is no doubt that huge potential exists for a logistics industry along the Silk Road Economic Belt. Statistics released by the Horgos Customs showed that the cargo of exports and imports through the port hit a record high of 21 million tons in 2013, accounting for 42.2 percent of the total of freight passing through customs in Xinjiang. Despite cargo growth, the logistics industry in western regions still faces some difficulties to be overcome.

Jiang Chaofeng, Vice President of the China Society of Logistics, pointed out that the international cross-border coordination of logistics between areas lying along the Silk Road Economic Belt is a complex process because of different laws and regulations in different countries. This represents a vital challenge for most domestic logistics companies, which need to develop in terms of management, marketing and qualifications if they are to operate internationally. The companies are in urgent need of talented people who are proficient in foreign languages, international trade, transportation and logistics and information management.

Another concern is out-of-date infrastructure and facilities. Take cold storage for example, which is essential to store fresh fruit. Gansu has the second largest apple planting area in China—4.35 million mu (290,000 hectares) and its yield of apples reached 2.7 million tons and the output value was 12 billion yuan ($1.95 billion) in 2013, according to Gansu Management Office of Agricultural Products Marketing. However, it still lacks an advanced cold-chain logistics system, a situation the new one built in the Wuwei bonded center hopes to remedy. In fact, most cold storages in western regions are small and cannot remain the required temperature of preservation. Furthermore, the number of the refrigerated trucks is far from sufficient.

The development of modern logistics in western regions is also restricted by a low level of digitalization. According to Gansu's 12th Five-Year Plan (2011-15) of Logistics Industry Development, due to a lack of an integrated information network, many local logistics companies have limited means to obtain information, which has severely affected the efficiency of transportation. In consequence, an integrated logistics information service network urgently needs to be established.

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