China's port operators to increase rail links to inland cities

Port operators in Shenzhen are hoping to increase the cargo services to places like Chengdu and even a daily service to Changsha

PUBLISHED : Saturday, 20 October, 2012, 12:00am
UPDATED : Saturday, 20 October, 2012, 3:14am

Shenzhen ports in Shekou and Chiwan are planning to strengthen their rail freight links with China's western cities by setting up containerised cargo services to Chengdu, Chongqing and Kunming, a senior Shekou port official has confirmed.

Erik Yim, managing director of Shekou Container Terminal (SCT), said the new railway freight services could start next year and would augment services between the two western Shenzhen ports and Changsha.

He and other transport experts said further development of China's high speed rail network would be important to the growth of containerised cargo services because freight trains could use the tracks previously used for passenger services.

"If railway conditions can be improved, we hope that we can have a daily service from Changsha within two years," he said.

Rail freight experts are forecasting significant growth in containerised import and export cargo moved by rail, while operators DB Schenker Rail and DHL Global Forwarding are exploiting international containerised rail.

Frederic Campagnac, general manager of rail transport consultant Clevy China, said: "Chinese container rail has a lot of room for development."

Campagnac said around four million 20-foot equivalent units per year is moved by rail, a figure that has remained stable for about five years.

He added that just 1 per cent of containers moved from Chinese ports are transported by rail compared with 85 per cent by road.

"Personally, I think rail makes a lot of sense including between China and Russia and China and central Asia," he told about 600 shipping executives and cargo owners at the Journal of Commerce TPM conference here.

Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, said that "so far the Chinese government has not given containerised rail a priority".

But he added that development of high-speed rail will leave the old capacity free to cater to cargo services.

Ho said that while there was no definite time for the government to develop container freight, he expected it would "happen very quickly" once there was official backing.

Campagnac said China United International Rail Containers, whose shareholders include New World Services with a 30 per cent interest, had opened eight container rail terminals.

These facilities, including terminals in Kunming, Chongqing, Dalian, Qingdao and Wuhan handled 20 per cent more container volumes to 1.5 million in the year to June 30. Terminals in 10 more cities, include Shenzhen, Tianjin and Urumqi.

Yim said container volumes have risen by about 10 per cent a year since rail container services to Shekou and Chiwan started in 2008.

"There are three services per week from Changsha to Shekou with a 30-hour transit time," he said.

Yim added that about 20 shipping lines, including Cosco Container Lines, Maersk, CMA CGM, APL and Taiwan's Yang Ming Marine use the service.

DHL Global Forwarding, part of the Deutsche Post, will start dedicated weekly container rail services next month from Shanghai to Poland in conjunction with China Shipping Container Lines which is providing the containers. The train will cross the Sino-Russian border at Manzhouli, the oldest rail gateway between the two countries.

Ambrose Linn, the firm's senior regional director for road freight and intermodal strategic accounts, said the service would be 90 per cent cheaper compared with shipping cargo by air.

It would also be "less than 10 per cent more expensive that ocean freight", he said.

Linn added the transit time would be 19 days from Shanghai to Warsaw compared with 30-32 days by sea. A second service would start next year.

He said the service was being launched based on demand from hi-tech industrial companies and manufacturers of fast moving consumer goods.

Linn conceded that the imbalance in trade between China and Europe meant freight trains returning to China would be less than 30 per cent full.

The firm plans to target the vehicle and hi-tech industries in central and eastern Europe to try to build these volumes.

Rival freight forwarder, DB Schenker Rail, an offshoot of German railway company Deutsche Bahn, launched container rail services between Shenyang and Leipzig in 2011 to supply BMW car parts to factories in China.

Ho said the development of containerised rail gives exporters more options to transport their products to Europe rather than relying solely on ocean freight where transit times had lengthened as lines cut ship speeds to save fuel and money.