MarketWatch: Vehicle Transport on The Silk Road
Updated: Apr 28, 2023
Wujiashan Railway Center, August 26th 2018; the 10,000th block train orchestrated by China Railway Express arrives Wuhan, China after traversing the Eurasian continent from Hamburg, Germany.
The rail connection between China and Europe has grown at record speed since Chinese President Xi Jinping first announced his “Belt & Road” initiative in 2013. Another 2,000 trains traversed the passage before the end of 2018, and at the start of this year a stunning 59 Chinese cities are connected to 49 cities in 15 European countries through this rail network.
All though sending containers by rail from Europe to the far East is not an entirely new concept, as one board member in Kar-Tainer with extensive experience from the shipping sector commented:
“If a container didn’t arrive port in Europe in time for vessel departure to Japan back in the 80’s, what did we do? We put it on a train through Siberia to Vladivostok for trans-shipment to Japan.”
However, the scale and punctuality of service is something completely different today than what it was back then, mostly credited to an immense push from Chinese side to develop this transport corridor, and containers can now be delivered at less than half the time it takes for ocean transport to make the journey between Europe and China.
Automotive Usage
This transport solutions have been utilized by the automotive industry since 2011 when BMW pioneered the first regular transports of automotive parts from Germany to their manufacturing plant in Shenyang, China. Today it is growing in popularity for transport of not only parts, but also finished built vehicles, with Global OEM’s such as Volvo and Porsche organizing regular transports between Europe and China; BMW and Daimler having done sporadic shipments; Chinese OEM’s like Geely, Lifan, Chery, etc. exporting cars from China to Central Asian and Russian markets; R&D and Expo cars from brands across the specter being shipped by rail as substitution for the slightly faster, but much more expensive air transport alternative; and the occasional shipments of parallel-import cars being shipped by rail to inlands regions of China instead of the more popular coastal destinations for this type of car imports.
China import cars can only clear customs at certain ports of entry authorized by central government to function as “Finished Vehicle Import Ports”. There is today 29 vehicle import ports in China, after Changchun International Land Port was awarded one of the last import licenses this May. At these ports’ vehicles are unloaded from containers before undergoing quality control by China Inspection and Quarantine – CIQ. Import tax income from high value import cars, which has traditionally all been kept to the coastal cities and their vehicle import seaports, is seen as an excellent incentive for provincial governments in the inland provinces of China to ensure long standing, efficient solutions for international vehicle logistics.
Challenges
One of the big challenges of the Trans-Eurasian railway connection is the huge imbalance in eastbound and westbound shipments. From the first dedicated China – Europe trains started up in 2011, it took until 2014 before any eastbound trains started operating. At that stage there was however only one eastbound train for every 10 westbound trains. Today the situation is getting better, and 2018 showed an eastbound utilization of over 73%; 3673 westbound trains over 2690 eastbound trains.
Another hurdle for the Trans-Eurasian railway is the different width on rail track gauges in the different countries the routes must pass between China and Europe. China and most the EU countries use the standard gauge which is 1.435 mm wide, while Russia and other CIS countries use the broad gauge which is 1.520 mm wide. This restricts block trains from traversing the whole passage with the same wagons and locomotives, so cargo must be transloaded from “Chinese trains” onto “CIS trains”, and then on to “European trains”, or the other way around depending on direction of transport. As mostly all cargo is shipped in containers, the trans-loading process is still quite efficient with newly built and improved border terminals offering huge improvements on the previously 24+ hours it took to get containers across the borders.
Opportunities
There’s abundant of opportunities to grab for vehicle shippers in utilizing the Trans-Eurasian railway connection.
Product gets faster to market which cuts cost for inventory in transportation, increases customer satisfaction and makes for a smoother outbound supply chain.
Inland regions in both China, Europe and CIS can be reached at a much faster, and in some cases cheaper manner when compared with conventional ocean transport with the additional handling and inland haulage accompanying this mode of transport.
European shippers are situated to take advantage of the imbalance in equipment between westbound and eastbound transports. Today, still, empty containers are being repositioned from Europe back to China, which could instead be loaded with cars enabling cost efficient solutions.
Why containerization
Although there have been trials done with conventional vehicle transport wagons, the container is still the preferred mode for shipping cars between these regions. The process of emptying and loading a conventional car-transport train is both time consuming and prone to damage vehicles. In addition to this, the infrastructure present today is all centered on the container as a transport mode.
Shipping cars in containers enables shippers to tap into the existing multimodal network built out around the silk road, and the shipment can be treated as a regular container shipment until it reaches end terminal or vehicle processing center whereupon more specialized vehicle logistic competence is required.
40-foot standard high cube containers are the most utilized container type for shipping goods by rail between China and Europe. With the right equipment 3-4 cars can easily be loaded in one such container. This gives a total load capacity of 123 – 164 cars per block train.
Considering these factors, the conclusion can be drawn that proper equipment for loading cars in containers are required to ensure efficient vehicle transport operations on The Silk Road.
Why Kar-Tainer
As an equipment provider offering external vehicle loading in a highly efficient manner, with proven damage rates of less than 0.025%, Kar-Tainer provides equipment optimal for vehicle transport on the Trans-Eurasian railways.
Cars loaded on Kar-Tainer cassettes can be loaded and unloaded in less than 15 minutes, no specialized equipment beyond a forklift is required for these procedures, and cassettes with cars can go in and out of container while container is still on truck chassis. These features reduce the requirements on specialized infrastructure needed to perform loading and unloading operations, which in turn increases the logistical flexibility of vehicle shippers operating on the railway.
Operating a Kar-Tainer cassette is an intuitive, simple procedure which is easily learned and can be applied across different loading and unloading terminals with ease. Our cassette-based system is designed to eliminate any room of human error which is usually what causes damages in a containerized vehicle transport setup. As opposed to other alternative container loading systems, loading personnel do not have to enter the container at any point or move under expanded vehicles, and it does not require workers to make any decision as to how to load the cars on the cassette or in the container.
Our business model of equipment leasing also removes the requirement for vehicle shippers to undergo costly investments into equipment before starting up new vehicle transport projects, which provides financial security for shippers, big and small.