Higher demand for Backhaul on China – Europe spurs new services
Huge investments in rail
infrastructure, improved cooperation between the railways, relocation of
production facilities to inland locations, growing trade between China and
C.I.S. countries, and increased environmental awareness make rail
transportation a viable transport option. Rail nowadays offers highly
competitive solutions even to companies with very high demands on speed, reliability
and safety. Therefore a growing number of electronics, automotive, industrial
and consumer goods companies use the respective service.
For shipments between China and
Europe rail fills the wide cost and lead time gap between air and ocean
transport and is particularly attractive to companies with high value cargo or
shipments between inland locations. In addition, it is the environmentally most
friendly transport mode. For shipments between China and Russia as well as
Central Asia rail often offers by far the best solution in terms of lead time
and pricing
Backhaul demand: the game changer
The momentum that has been
developing steadily on the rail freight link between China and Europe is
spreading to the backhaul route with eastbound volumes rising sharply in the
past year, according to DHL Global Forwarding.
DHL Global Forwarding has even
opened a China rail competence center in the German city of Stuttgart to handle
the increasing demand and now operates seven rail services a week between
Germany and China.
“Rail freight volumes between
Germany and Asia have increased 10-fold in just one year,” said Volker Oesau,
CEO of DHL Global Forwarding Germany and Central Europe. This has required the
expansion of its Stuttgart operation to primarily provide support to German
customers in the automotive, technology, mechanical engineering, and retail
sectors.
The 7,500-mile rail route
connects 16 cities in China with 15 cities in Europe with forwarders building
the mode into their regular services offered on the Asia-Europe trade and are
now starting to do the same on the return journey. Trains of more than 40
wagons follow either the trans-Kazakh western corridor or the trans-Siberian
northern corridor, connecting with the dense network of rail hubs in China, and
linking with Taiwan, Japan, and South Korea.
DHL’s Stuttgart center will
provide the multi-modal solutions required for the end-to-end transport
processes such as collection, export, and transit formalities; the Euro-Asian
rail service; customs clearance in the land of arrival; and delivery by truck
or combined rail transport.
Challenges for the container train services
Challenges for service providers
on the route include tracking and tracing the containers and ensuring their
security. With such vast distances being traveled through remote areas, and
multiple gauge changes en route, maintaining the integrity of the cargo is a
key factor. DHL said track and trace and temperature information was available
and its team was also developing tailored security concepts for high quality
goods.
Simplified Customs Procedures
Customs procedures have been
simplified with the introduction of the standardized CIM/SMGS waybill —
international conventions that apply in Eastern Europe and Asia to the
international carriage of passengers and goods by rail — and has minimized the
administrative effort required at border crossing points.
The CIM/SMGS document is
recognized by customs authorities and facilitates faster clearance of goods
transport. The waybill can be used for wagon load traffic and combined
transport, and improves the flow of documents at border crossings between two
legal jurisdictions.
Less-than-container-load (LCL)
shipments are expanding rapidly on the headhaul and backhaul China-Europe rail
trades, opening up the routes to a much wider customer base. DHL Railconnect is
an LCL service that the forwarder started in 2016 that uses the German rail hub
of Duisburg, and in February, Kuehne + Nagel launched its KN Eurasia Express
LCL service for shipments heading westbound and eastbound.
Otto Schacht, member of the
management board of Kuehne + Nagel International responsible for sea freight,
said with transit times of between 14 and 18 days from departure to destination
terminal, delivery times were much faster than maritime transport and at lower
costs compared with airfreight.
German logistics provider Dachser
has also begun to offer a weekly scheduled LCL service connecting Wuhan with
Hamburg with fixed weekly departures.
DB Schenker’s pioneering efforts
A pioneer in the development of
block trains between China and Europe was German forwarder DB Schenker that
started operating regular block trains eastbound and westbound in 2011 with FCL
and LCL shipments.
DB Schenker was involved in
bringing the first train from China to London in January, taking charge of the
locomotive on the Duisburg to London leg via the Channel Tunnel. In the test
run, the train originated in Yiwu in the eastern Chinese province of Zhejiang
and reached London in around 18 days, making it twice as fast as transport by
sea. The train was loaded mainly with textiles and other consumer goods.
A record number of containers,
around 40,000, were transported by train along the legendary Silk Road in 2016,
according to DB Schenker, which expects the volume to increase to more than
100,000 containers by 2020. Some estimates put the 2020 prediction as high as
500,000 TEU, with concerns being raised that congestion at key points, such as
rail gauge change stops, could become a problem.
