10 April 2017

Freight Forwarding Agents Praise Possible Advantages of New UK China Rail Cargo Route  

First Container Train Heads East - Faster than Sea Cheaper than Air

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Shipping News Feature UK – China – The first freight train from the UK to China has departed today from DP World's London Gateway rail freight terminal, as site usually associated with deep sea shipping. It will carry thirty shipping containers containing whisky, pharmaceuticals and baby products and, at a ceremony to see the train off, DP World's Chairman, Sultan Ahmed Bin Sulayem, told gathered guests at that 'London Gateway has joined the Silk Road. '

Though this first shipment is a tiny load in comparison to the amounts of cargo carried by both shipping and air freight, the attention and interest that the shipment has engendered illustrates that many exporters are looking closely at the method as a possible useful addition to freight services between Asia and Europe. This particular train will make calls in Germany, Poland, Belarus, Russia and Kazakhstan before arriving at Yiwu in eastern China on 27 April, and the opening up of the new overland freight route offers the possibility of exporting not just to China but to those countries on the route both more quickly and at a lower cost.

The fact that the trip to the final destination is only 17 days, several weeks quicker than sea freight and substantially less expensive than air cargo means that there could well be a sizeable section of the international freight trade that might have commodities for which the reduced transit times are a useful factor, striking a good balance between ocean shipping and the higher costs involved when using air freight.

It is also possible that as these freight trains become more common that new routes and aligned regulations in countries en route help make it even more economic and attractive. The Mongolian government has announced that it intends to help boost the route by improving custom clearance on shipments shortly. In 2016 a rail freight route opened between Erenhot in northern China's Inner Mongolia which travelled through Mongolia before linking to Russia and other European countries. B. Tsogtgerel, deputy minister of the Mongolian Road and Transport Development Ministry, said that:

"We will help shorten the transit time of China-Europe freight trains via Mongolia and provide fast customs clearance services. There were 167 China-Europe freight trains travelling through Mongolia in 2016 and that is expected to reach 400 in 2017. The train route via Mongolia will help develop the rich resources in Mongolia and promote the common development of countries along the route."

Other freight service providers have also been looking at the new train services and working how to efficiently integrate them into their current offerings. Davies Turner, one of the UK's leading independent freight forwarders, says that three months after it introduced a fixed-day, weekly rail service for LCL cargoes to the UK from the Chinese rail terminals of Wuhan and Hefei, it is pleased with the response from the marketplace.

The service arranges collection of shipments from any location in mainland China to the rail terminals of either Hefei or Wuhan, where closing dates are approximately two days prior to the departure of the intercontinental rail service. That service then heads west across China, Kazakhstan, Belarus and into Warsaw in Poland.

Cargo is then trucked to the UK under bond using the daily service that Davies Turner operates with its long-standing Polish partner Raben, for subsequent customs clearance upon arrival and delivery to door. Transit time from Hefei to the UK is 23 days and from Wuhan, 21 days. Philip Stephenson, chairman of Davies Turner said:

“We had been investigating the practicalities of a rail freight service from China to the UK and Ireland for some time and conducted a number of trials in 2016, before officially launching the service in January this year. We also offer a 25 day service to Ireland in conjunction with our own office in Dublin.

"The big selling point is that the cost is around 70% less than shipping the cargo by air and 16 days quicker than getting it to destination by sea.”

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