China Opens More Intermodal Connections with the West

Posted : 07/18/13 2:46 AM

German rail operator, Deutsche Bahn AG, has extended its reach into an area that is currently being dominated by the giants of shipping like A.P. and Moeller-Maersk, with the inaugural freight train trip on its newly opened Hamburg to Zhengzhou line. The train delivered 51 containers after crossing two continents, traveling through China, Kazakhstan, Russia, Belarus, Poland and finally, Germany on its 10,214 km journey. Most significantly, the trip covered the distance in only 15 days, around half of the time that the same trip from Zhengzhou to Hamburg takes by sea.This first trip was organized by the Zhengzhou International Land Port Development and Construction Co. in conjunction with DB Schenker and is intended to take advantage in the recent shift of production intensive industries to the Chinese hinterland where they are more accessible to Western connected transport networks. This latest freight route builds upon those that have already been established to transport goods for the automotive and electronics industries. DB Shenker is an Eastern branch of Deutsche Bahn with 45 offices and 5,000 employees that is focused specifically on the German-Chinese trade route. Currently there is $87 billion in exports from Germany to China annually, with $77 billion going the other way, and DB sees this as a virtually untapped market for rail transport.This puts them into direct competition in the China-to-Europe intermodal shipping markets, although the relatively low volumes of containers that are currently being transported by land are hardly an immediate threat to the tens of thousands of containers that are carried by Moeller-Maersk and the other shipping giants at the moment. Even so, with recent decline in cargo being shipped to Hamburg from Germany, as the Chinese economy cools off from its superheated levels of production of the past few years, as the new rail link becomes more firmly established it could present a quicker, more direct and perhaps even cheaper option for shipping cargo from Europe to China. Because the value lost on goods such as engines and computer components during the longer time that it takes to go by sea is making the overland rail link look all the more attractive to the automotive and electronics industries, two staples of the Chinese economy that are forecast to continue to be strong for several years to come. The inclusion of intermodal services on this crucial overland link between East and West can only add to its attractiveness with other exporters in both countries.