Transcargo (TCO) has ramped up its rail container usage on the new Silk Road to up to 15% of its business, of which 70% contain finished vehicles.
Rail is continually picking up speed in container transport to and from China. This trend has now been apparent for some years. The players involved include rail transport via the Silk Road in their planning more and more frequently. Meanwhile, for TCO Transcargo, the Hamburg-based service provider for cargo handling, warehousing, distribution and container logistics, trains for/from China are part of everyday operations. Since TCO entered the field over twelve months ago, this business has developed remarkably. The opportunities have by no means been exhausted and further potential is still there.
For China, the new Silk Road is one of its largest development programs for years. With the slogan ‘One Belt, One Road’, the Beijing government is ambitiously promoting the project and backing words with deeds: Billions are being invested in infrastructure and building up train services. Just between Hamburg and the Middle Kingdom, 177 weekly container block train links are meanwhile available. Based in the Hanseatic City, TCO Transcargo entered the China-by-rail business at least twelve months ago.
“We primarily handle containers for export to China. That started with three or four 40-ft containers per week,” recalled Thomas Wolnewitsch, TCO’s Managing Director. Meanwhile, the firm is handling 25 containers per week, and these rail containers to China constitute 10-15%of TCO’s business.
The main activities of the port operation in the heart of the Port of Hamburg are cargo handling, container stuffing and secure packing of freight for China. Here TCO has had to adapt and learn a lot, since some of the requirements are quite different from those for seaborne containers. “With containers going by rail, sudden acceleration can occur, and forces work horizontally. Freight is also exposed to constant shaking and vibration. This all calls for special cargo lashing. At destination, the Zhengzhou rail terminal, stringent regulations apply on how containers are loaded. We receive clear instructions on how containers must be balanced in terms of weight so that they can be transhipped in China,” explained Wolnewitsch.
TCO also takes responsibility for delivering containers at Eurokombi’s multimodal terminals in Hamburg-Waltershof or DUSS in Hamburg-Billwerder. From there they continue to Malaszewicze on the Poland-Belarus border, where they are transferred from standard to broad-gauge track. They continue via Belarus, Russia and Kazachstan as far as Zhengzhou in the Chinese province of Henan. TCO’s partner and customer is the Chinese rail operator ZIH (Zhengzhou International Hub Development).
At least 70% of rail containers for China handled by TCO contain cars. The remaining 30% of the freight consists of machinery, steel coils and boxed/crated export cargo. Currently ZIH trains are leaving Hamburg for China almost daily. The operator plans to further boost frequency in response to rising demand. Wolnewitsch sees the saving of time as one advantage of containers by rail. By water, door-to-door transport currently takes six weeks, by rail it is almost three weeks – or 50% – shorter. The aim is for purely rail transport to cover the roughly 11,000-kilometre route within between seven and nine days.
“For time taken, then, rail is currently very interesting in comparison with sea transport. And on price, it is highly attractive compared to air freight,” said Wolnewitsch. Nevertheless, he is convinced that the new transport system will not significantly influence transport volume in the sea freight field. For that, its capacities are simply too small. “However, air freight could certainly feel the effects,” forecasts the TCO chief. Wolnewitsch is also certain that even if the subsidies from the Chinese side are withdrawn in almost three years’ time, no collapse will hit these trains for China: “This system offers too many advantages for that to happen.”