Asia-Europe train to challenge to sea-air services

Asia-Europe train to challenge to sea-air services A weekly freight rail service linking China to Germany will most likely compete with sea-air service when it begins after the Chinese New Year in 2009.
   The block train service, headed by DB Schenker in partnership with Chinese and Russian state-owned railways, cuts across five countries to provide and an alternative to ocean and air services between Asia and Europe. The service is expected to target cargo originating in China's hinterland – in other words, points far from China's many large seaport.
   At Transport Intelligence's Global Distribution Strategies – Asia Pacific conference in Hong Kong Wednesday, DB's Jurgen Rogner said the service's advantages over ocean and air freight are transit time and cost, respectively. Taking a shipment between Shanghai and Hungary as an example, he said the transit time for air would be three days, for ocean 33 days and for sea-air (routed by ocean to Dubai and by air from Dubai to Frankfurt) 18 days. The Eurasian rail link would take 21 days, but at a much lower cost to sea-air.
   Rogner said that the service has great potential, but stressed that there are operational issues that make it far from hassle-free. For instance, shipments will have to cross five borders and thus deal with customs declarations five times.
   'Imagine if airfreight had to declare customs for every country it flew over,' he said. 'Also, the railways in Russia, China and Eastern Europe are state-owned and politically driven. There are different consignment rules in the various countries. These are not market or customer driven, especially for cross-border shipments.'
   There are also technical issues, such as the fact that not every railway on the route uses the same power system or track gauge.
   'Route infrastructure needs continuous investment,' he said. 'Also, the availability of assets can be a problem, Schedule reliability is a problem as well and slowdowns can occur in terminals.'
   When asked whether individual shippers or logistics providers can provide single wagon shipments themselves, Rogner said not initially.
   'It's too difficult at this point to handle single wagons or single containers,' he said. 'The block train will have several shippers – there will be consolidation and deconsolidation. We need to have a block train to have it under our control.'
   He said the success of the service will rely largely on how well China connects inland movement to rail hubs, from where the weekly freight trains can shuttle cargo to Europe. DB is also an investor in a joint venture with China Railways to develop a network of 18 intermodal hubs around China, seven of which are due to open in 2009 (including Qingdao, Wuhan, Dalian and Chongqing).
   DB pilot-tested the service from Beijing to Hamburg in January, a journey that took 12 days. The first actual block train to run was a Siemens-Fujitsu shipment from Xianting in inland to China to Hamburg in October.
   'We need customers who are willing to drive this experience,' Rogner said. 'We're convinced that this mode will be viable in the next five years.' ' Eric Johnson