A bumper year for China-Europe rail, but growing demand could derail services
It’s been another bumper year, so far, for China-Europe rail freight, but surging volumes are ...
China-Europe rail services are set to triple within three years as demand grows and shippers “catch on” to the advantages.
Asian media reports that during the recent ‘Belt and Road’ conference, China plans to increase the annual number of trains from 1,800 last year to 5,000 in 2020.
Meanwhile, this week three forwarders developed their services on the route and another city was added.
Shenzhen is now connected to Minsk, with the first train arriving in the Belarusian capital next week, with 41 feu on board, including mobile phones and automotive parts.
The route is managed by DHL Global Forwarding in conjunction with logistics provider China Brilliant, and offers both full-container-load (FCL) and less-than-container load (LCL) services. It offers real-time GPS tracking of containers and customs clearance.
Demand from Eastern Europe is accelerating, according to the forwarder, as economies in the region grow.
Panalpina is to open a second consolidation point in Shenzhen in July, it said yesterday. The forwarder currently consolidates cargo in Shanghai for a weekly train service.
“More than 150 customers have used the service so far, moving over 5,000 cubic metres of cargo, such as automotive parts for tier-2 and -3 providers, tablets, equipment for manufacturing lines as well as clothes and shoes,” said Antonio Pacciolla, regional head of overland Europe at Panalpina.
“We expect these volumes to grow further as more of our customers in Germany, the Czech Republic, Slovakia, Hungary, Romania, Sweden the Netherlands and Belgium are now considering this transport option.”
Nippon Express this week also launched new services: six westbound FCL destinations in China and 18 LCL and eight eastbound services from Europe.
The rise in rail has divided opinion in the freight business on whether it will most affect air or sea. One shipper believed “hundreds of tonnes a month” were being stripped from air routes. He said his company was looking at the services as a viable alternative to air freight into China, as well as air-sea into Dubai-Singapore-China.
Marie-Christine Lombard, CEO of Geodis, told The Loadstar: “Rail is an attractive option to ocean.”
But she also noted that for shippers and forwarders, modal competition is irrelevant.
“Clients want the most competitive costs in the supply chain. So you take into account your customers’ needs. On any tradelanes they want the best solution.
“Rail for some flows is very appropriate. If you have regular volumes which need speed, and you have the right flows, you add rail into that solution. And it’s also very competitive against air. We see an opportunity there.
“Geodis is a logistics company operating a network, but we are not focused on one mode. We can design a multimodal solution that fits the underlying flows of the customer. You always look at how to build a robust solution which is cost-effective.”
And rail appears to be.
Mr Pacciolla added: “The rail service is one-third the cost of air freight and twice as fast as ocean freight. It’s an interesting proposition that is catching on.”