Subscribe | Advertise | Contact Us | About Us |    



Bookmark and Share

On the Rails: Growth in Asia's Slower Lane

Last October the British and Chinese governments agreed to allow more than double the number of passenger flights between the two nations and threw the door open to unlimited cargo flights. To date, however, no air carrier has availed itself of the opportunity. Instead, rail, as well as rival ground-based modes, have risen in popularity.

On the Rails: Growth in Asia's Slower Lane

The new year saw the launch of the first freight train service from Yiwu in China's Zhejiang province to London, a 12,000-kilometer journey, which was covered in about 18 days, passing through four Asian and four European countries before entering the U.K. There are two corridors for such connections on this well-worn route between Europe and China: One going through Mongolia and Russia, and the second through Kazakhstan and Russia. Most rail services from China terminate in Germany, but the reach across Europe is spreading. Last year, Kerry Logistics entered the rail arena with a large-scale project that involved two block trains plus a number of full containerloads moving to Spain.

At the Asian end, the number of origin points has climbed steadily in the last decade, creating a greater threat to air cargo options. Over the past couple of years, DHL Global Forwarding (DHL-GF) established rail-ferry connections from Japan and Taiwan to Europe, as well as a link from Korea. In September, DHL-GF started services from Japan to Germany; Vietnam to Europe; and Chengdu to Istanbul. According to Charles Kaufmann, DHL-GF’s CEO for North Asia and head of value-added services for Asia-Pacific, the introduction of less-than-containerload services has been well-received, as it offers greater flexibility and speed — making it more competitive with air — and allows clients to export low-volume shipments.

Block-train journeys from Asia to Europe have climbed from 72 in 2013 to an estimated 1,200 last year, according to forwarder TransXpress. Panalpina, which has seen double-digit growth in this segment, moved almost 900 forty-foot containers in this corridor last year, reported Sng Peng Koon, Panalpina’s country head of overland/subcontractor management in Greater China.

The collapse of Hanjin last summer was initially thought to be a boon for air cargo, but rail seems to have been the real beneficiary, as shippers suddenly faced a shortage of marine capacity, said Caspar Lum, manager of trade development at Kerry. Hellmann Worldwide Logistics also reported a shift to rail after the Hanjin bankruptcy. The migration of manufacturing to China’s interior has been a factor in the growth of overland links to Europe, as has been Beijing’s muscular support of the “One Belt, One Road” initiative.

Read Full Article

SCB TRANSLATOR (Over 60 languages)
Sponsored by: