All aboard
While each of the various rail projects has its own unique characteristics, most of these routes follow roughly the same two sets of tracks for most of the journey. There is the Northern Route, which begins in Germany and Poland and continues east, straight across Russia on the Trans-Siberian railway before heading south and entering China through the border city of Zabaykalsk and continuing on to cities such as Beijing, Zhengzhou and Suzhou. Then, there is the Southern Route, which at first mirrors the Northern Route though Poland, but splits off earlier and heads southeast toward Kazakhstan. After crossing the former Soviet republic, the line enters China’s western desert provinces at Alashankou, China, and continues on to cities such as Chongqing, Chengdu and Zhengzhou.
Charles Kaufmann, CEO, North Asia, and head of value-added Services for DHL Global Forwarding Asia Pacific, said DHL began trial runs for these routes as early as 2010, establishing a twice-weekly northern connection from Chengdu to Lodz, Poland, which took about 14 days, and another from Zhengzhou to Hamburg, which took about 17 days. In general, he said, railfreight costs about 50 percent more, compared to oceanfreight but can be up to 10 times cheaper than airfreight.
“We were one of the pioneers of the China-Europe route by rail,” said Daniel Wieland, senior vice president, rail logistics, for DB Schenker. “We started with a very big client for the block train, from Chongqing to Duisburg [Germany] back in 2011.” In 2014 the service was opened up to multi-customer trainloads with LCL shipping capabilities.
Goods that are shipped include electronics from HP, automotive parts from BMW and various couture fashion items, which are valuable enough to be time-sensitive but also don’t need to be sent via air. Seafreight times averaged about 40 days between Europe and China.
“Some customers were hesitant at first,” Wieland recalled. “But after a few trial runs, we were able to establish good regularity of trains. You may have an occasional operational hiccup, but the process is normally seamless.”
Today, he added, Schenker sees a “more balanced ratio” of cargo going east to China and west to Europe. “Going west, most of the goods are, for example, electronics, fashion and toys. Going east, from Europe to China, we have mostly automotive parts, perishables and industrial goods. All these goods used to go only from China to Europe.”
DB Schenker, part of the Deutsche Bahn rail conglomerate, has also created some air cargo opportunities for the electronics shipments. “These are sent by rail from China to Frankfurt and then flown to Brazil and other Latin American destinations,” he said.
While the DHL and Schenker projects provided proof of the railhaul concept, it wasn’t until 2013, when China’s President Xi Jinping began implementing what has become known as the “One Belt, One Road” strategy, that the rail corridor began to see steadier traffic. One Belt, One Road, in a nutshell, is an attempt by the government to get China’s economy back to double-digit growth by making heavy investments in its rail and maritime connections with Europe.
The land-bridge rail corridor is called the “Silk Road Economic Belt,” while the seafreight corridor is considered the “Maritime Silk Road,” connecting China to Southeast Asia, the South Pacific, South Asia, Africa and Europe. According to the Civil Aviation Administration of China, 51 of the 193 civil aviation construction projects planned for this year are directly related to these Belt and Road initiatives. Total spending for One Belt, One Road infrastructure projects topped $161 billion as of March 2015. In Kazakhstan alone, China has invested $40 billion in road and rail improvements.