When Marco Polo began writing about the wonders of China’s Kublai Khan and the famous Silk Road in the late 13th century, it took him about four years to make the 10,000 kilometer journey, mostly on foot. Since then, we’ve made some serious improvements in travel. A direct flight from Beijing to Italy can be done in less than 11 hours – just enough time to watch the entire first season of the Netflix TV series “Marco Polo” on your iPad.
Today, the Silk Road is just as active a trade route as it was 700 years ago, but there’s a certain “back to the future” feel to the most recent projects linking Europe and China. The mode of choice being talked about now is not ocean or air cargo but railfreight. Trains with 50 railcars leaving cities in Germany and Poland are carrying goods across the steppes of Russia, through the forests of Siberia and desert scrub of the Gobi, and reaching China’s industrial centers. And once in China, they load up with Chinese-manufactured goods for the return journey. Total time from one side of Eurasia to the other: 15 days, on average.
But those in the airfreight business who dismiss two-week delivery times as too slow to worry about, in terms of competition, may need to pay more attention to their customers. Once dismissed as a novelty, rail is starting to fill a sweet spot in between the speed of air cargo and affordability of seafreight.
“Fifteen days is really getting the attention from many European shippers,” said Joost van Doesburg, airfreight policy manager at the European Shippers’ Council (ESC). “That’s a nice amount of time for some categories of goods that are either too cheap or too heavy for air. Rail is a good intermediate option.”
This 19th century answer to a 21st century cargo need is very much driven by the demands of shippers and forwarders to provide an alternative to air and ocean. Starting with a few trial projects by DB Schenker and DHL Global Forwarding five years ago, there are now similar containerized rail services on the same Silk Road tracks being offered by top forwarders and integrators, such as Panalpina, Kuehne + Nagel, Kerry Logistics and UPS. In August, UTi Logistics joined the fray with the launch of its own railfreight service, to be called the “Iron Silk Road,” in partnership with Chiangjiu Logistics, the Port of Dalian and the Harbin Railway Bureau.
“Rail service cannot replace air,” said Raymond Lee, UTi’s managing director for Greater China. “However, it can help clients to better manage their supply chain by mixing use of ocean, rail and air. It definitely can help to save the cost. Before, if customers missed an ocean sailing schedule, they had no other alternative but air. Today, they can consider rail.”Like This Post