Exporters can reduce costs, shipping time

DB Schenker, the international transport and logistics arm of Germany's national railway, plans to offer regular block train services between China and Russia, as well as China and Central Asia, over the next two years.

Having set up regular block trains from a number of major Chinese cities to Europe starting in 2011, DB Schenker now is working with partners such as Russian state firm JSC (Joint Stock Co) Russian Railways and China Railway Corp.

The block train service could cut rail cargo travel time between China and Moscow by half, the German company said.

A subsidiary of the Deutsche Bahn rail network, DB Schenker ran 250 container trains between China and Europe in 2012. It started westbound block train service from Chongqing in Southwest China to Germany's Duisburg and eastbound service from Leipzig to Northeast China's Shenyang in 2011.

Bernhard Wiezorek, director of rail logistics and forwarding of Schenker (China) Ltd, said that increased financial and environmental awareness, as well as improved product categories, make rail transportation a preferred transport option.

China's rail system was previously like those in other Asian countries, mainly carrying bulk goods such as coal, steel, ore and agricultural products.

Since learning about China's new trend of locating manufacturing facilities in its inland provinces, which has increased trade between China, the Commonwealth of Independent States and European Union members, DB Schenker has established a field office network of more than 62 offices, 90 warehouses and 5,000 employees in China.

"Rail service today is able to offer economic solutions to large international brands with high standards for speed, reliability and safety," Wiezorek said.

The China-Europe rail system's key clients belong to the electronics, automotive, high-end manufacturing and consumer goods industries.

The German carrier was the first company to implement regular train service on the so-called New Silk Route that runs through Kazakhstan, Russia and Belarus to Europe.

"Nowadays, there are regular block trains from Chongqing, Chengdu and Zhengzhou to Europe," Wiezorek said.

"They enable door-to-door transport from almost anywhere in China to most European cities in 19 to 22 days,"

With trade activities expanding in Russia and Central Asia, the need for direct transport links with CIS countries has grown.

Chinese goods usually are distributed via container ships and cargo flights to international service centers such as Rotterdam, Hamburg or Frankfurt, Germany. From there, the goods travel on long-distance trucks before arriving at destinations such as Moscow, Novosibirsk in Siberia or Astana, capital of Kazakhstan. This arrangement puts added financial pressure on trade and manufacturing companies at each end of the journey.

Direct rail service is available, but terminal-terminal transit time to Moscow can take 30 days, depending on the originating city.

"Once regular block train service is implemented, it should be possible to send cargo from most cities in China to Moscow in 15 to 18 days. It will be a real game-changer," said Wiezorek, who believes it will happen soon.

New block train service to Almaty, Kazakhstan, already is in the pipeline.

Luo Renjian, a researcher at the Institute of Transportation Research under the National Development and Reform Commission in Beijing, said that without fast rail solutions to Europe, Russia and ports in China, Chinese companies may face heavier competition from such Southeast Asian countries as Vietnam and Indonesia, which have lower labor costs and enjoy shorter transit times by sea.

To connect inland cities, rail often is twice as fast as ships and a fraction of the cost of air. Rail solutions can fill the wide time and cost gap between air and sea transport, and offer customers a favorable alternative to these traditional transport modes.

"Air cargo service, including goods clearances, normally takes between three and six days to complete the journey, but it costs six times as much as rail and adds at least 25 times more carbon to the atmosphere," Luo said.

This year, DB Schenker aided Zhengzhou, the capital of Henan province in Central China, in developing regular rail service to Hamburg by providing consultation and operator service outside China. It takes a train 16 days to make the 10,214-kilometer trip.

"A modern rail infrastructure and regular block train service to key cities in China and abroad not only strengthens local industry but also helps attract fresh capital and new industries," Wiezorek said.

Many companies are deciding to locate their factories at inland sites contingent on the availability of fast and inexpensive access to their core markets. Without rail, this could not be achievable.

zhongnan@chinadaily.com.cn

(China Daily USA 10/30/2013 page16)