Stage

Containerzug in China vor Bergkulisse

A bridge across continents

DB Cargo has been successfully transporting containers between China and Europe for many years. Our extended network has allowed us to assume a pioneering role for our customers.

 

Duisburg. This port city in Germany’s biggest industrial region is at the vanguard when it comes to economic performance; the world’s largest inland port is growing apace. Within the space of a few years, this small city on the Lower Rhine has morphed into a transshipment hub for east-west traffic to be reckoned with. Rail lines from the surrounding areas reach deep into the port.

Rail has long done more than merely bringing transshipped goods to the hinterland or transporting them onward for export. It has become an extension of the port itself. The railway has grown into one of the main arteries that ensures the flow of goods between Europe and Asia, with trains pulsing between the major industrial centres on both continents.

The rail link between Europe and China is one of the world’s biggest globalization projects. However, the old trade route between east and west never really shut down. Across the millennia, traders plied the silk road to trade their goods with people in distant lands, from the heartland of China to the major European trading cities. Traders were unimpeded in establishing contacts and sending goods over the land route to their customers. Five years ago, China’s president Xi Jin-ping presented the Silk Road Economic Belt: the Belt and Road Initiative (BRI). Others have dubbed the project, somewhat more romantically, the New Silk Road.

It will give rise to a gigantic economic area. China plans to invest nearly USD 1 trillion in infrastructure projects along the New Silk Road in the coming years. Roughly 1,000 different projects are pending, and they will link together more than half of the world’s population: 4.5 billion people in 70 countries. The project is not confined to land; it will also cross the high seas, from China’s eastern coast through the Indian Ocean to West Africa and southern Europe.


Milestones in freight transport

Thousands of kilometres of new tracks along the north route through Russia and Kazakhstan on the trail of the legendary Trans-Siberian Railway make this the most important route for rail freight transport. With a transit time ranging from 12 to 18 days along a 10,000 km route, these are the fastest Eurasian rail links.

Deutsche Bahn has been travelling along this route for quite some time. In 1973, the first container rode the Trans-Siberian Railway. In 2008, a test freight train from Beijing reached the city of Hamburg, and the first regular container train from Xiangtang followed in October of the same year.

From the other direction, freight train X8044 from Hamburg arrived in Wujiashan, a city in the central Chinese province of Hubei, in March of 2011, marking a new era. Since then, DB has offered regular train services between China and Germany.

“What started with one train on 6 October 2008 has long developed into a success story,” sums up Alexander Doll, DB Management Board Member for Freight Transport and Logistics.

The rest of Western Europe has also been connected to the network in recent years. In 2014, the first freight train from China chugged into Madrid. At the controls of the locomotive was Vanessa Fernández of Transfesa, a subsidiary of DB Cargo. She arrived to a huge media reception at the station. In France in 2016, national media gave extensive coverage to the arrival in Lyon of the first train from China. In 2017, when the first direct train from Yiwu arrived in Barking in the UK after a 12,000 km journey, the BBC even broadcast the event live on television. The transcontinental feat has amazed Europe.


Expansion of rail lines

What made this accomplishment possible was the upgrade of lines between Europe and Asia . In recent years, China in particular has poured vast investments into its network. “In the last ten years, both the rail network and the volume of freight have nearly doubled,” says Dietmar Prümm, Head of Transport and Logistics at management consultancy PricewaterhouseCoopers Germany. “Ambitious targets set by the Chinese government are calling for a 30% increase in the volume of rail freight by 2020.”

Especially in China’s urban centres, rail based modes of transport play a key role. But China has its sights set on one more objective: “There are parallels with Germany in that rail transport, of course, is also intended to help achieve existing sustainability targets”, says Prümm.

After all, China’s economic clout has continued to grow. However, the country’s economic strides have also sent it rocketing into the lead in terms of worldwide CO 2 emissions and led it to suffer tremendously from climate change. Devastated swathes of land, environmental woes, dwindling water resources and, not least, the legendary smog overhanging large Chinese cities all illustrate the country’s need for a more sustainable economy. Shoring up environmentally friendly modes of transport is one step China can take to address this. A train travelling from Europe to China releases 95% less CO 2 than a plane.

That is why Hebei Province, for instance, which surrounds the smogplagued capital of Beijing, plans to transport one-third of all goods by rail or inland waterway by 2020. According to news agency Reuters, only 11.7% of goods are currently transported by rail.


Multiple gauge changes

10,000 transports have now taken place between China and Europe. As of 30 June 2018, 48 Chinese cities are linked with 42 European cities by rail. There are now regular train connections between 15 European destinations and a similar number of destinations in China. They bring clothing, automotive parts, chemicals and other Chinese goods to European consumers. In the opposite direction, the trains transport food, wood products, machines and equipment.

From 2014 to 2017 alone, the num - ber of annual trains mushroomed by a factor of 12 to reach 3,673. A large share of them are operated by DB Cargo. According to forecasts, at least 100,000 standard containers will be transported (reliably and sustaina - bly) to customers by the year 2020.

Nevertheless, this route still involves a major technical and organi - sational workload. On their trip over the longest railway line in the world, the trains need to change their track gauge twice. China uses the same gauge as Europe. For historical reasons, however, trains in Belarus, Russia, Mongolia and Kazakhstan run on rails that are spaced more widely apart. At transshipment stations, the changeover is made between the 1,435 mm “standard gauge” and the 1,520 mm broad gauge: containers are lifted by crane from one container wagon to another wagon with a different gauge. An alternative procedure is to replace the axles; every wagon has its own replacement axles, which take a great deal of effort to store and maintain.

In Asia, the change of gauge takes place in Erlian/Zamyn-Üüd on the border between Mongolia and China or in Zabaykalsk/Manzhouli on the border between China and Russia.

An enormous facility for rail freight transport has also popped up a few hundred kilometres to the south at the border of China and Kazakhstan. Today, one of the largest rail freight stations in the world is located on the Dzungarian Gate, the pass linking Russia and China: two out of three trains in Eurasian traffic run through Dostyk/Alashankou. The waiting time at the railway station has now dropped from 24 hours to 15 hours.

After travelling for days through Kazakhstan and Russia, the trains pass through the cities of Brest and Malaszewicze on the border between Belarus and Poland. There, the con - tainers need to switch to standard gauge before they can join the Euro - pean rail network.

With the border crossing has become a bottleneck, DB Cargo is scoping out alternatives. “Having received multi - ple requests from our customers, we will begin testing a sea route from Kaliningrad to Rostock starting in the autumn. It will allow us to distrib - ute goods from German Baltic Sea ports into Europe more rapidly and more flexibly,” says DB Management Board Member Alexander Doll.


Flexibility and cooperation are required

But the track gauges are not the only thing that makes life difficult for rail - way employees. There are different technical standards, too. For instance, there are differences in coupling: Europe uses buffers and screw cou - pling, while Russia and China use the Russian SA-3 coupling. Moreover, trains in Russia are allowed to stand 5.3 metres tall and measure 3.75 metres wide. In Europe, containers are typi - cally 4.32 metres tall and 3.15 metres wide in line with ISO standard 668.

Finally, differing electrical systems, operational regulations and customs procedures create an environment in which the only way to succeed on this route is to bring experience and a willingness to cooperate to the table.

“You can only master this kind of route if you have a broad base and a large network to draw on,” says Dr. Carsten Hinne, Senior Vice President of Corridor Development for the China/Eurasian corridor at DB Cargo. “After all, we have been cooperating with the rail companies and our part - ners for quite some time. There are a lot of processes that work well. But the business also requires us to be tremen - dously flexible at our end.”

The freight operating company benefits from the fact that its contacts with China go back a long way; DB has been operating there since 1966.

Logistics subsidiary DB Schenker employs 6,200 people in the country and has a dense network of 92 logistics sites and offices in 67 Chinese cities.

“The business is truly engaged in a dialogue with multiple partners”, adds Uwe Leuschner, Senior Vice President Business Development Eurasia at DB Cargo AG, General Mana - ger of DB Cargo Eurasia and CEO of DB Cargo Russia. “We have to main - tain continuous dialogue with our partners and the other parties involved, not least because of the pressure on prices, which remains high.”


Close collaboration with DB Schenker

In response to these challenges, DB Cargo has reorganised itself, integrating all the services related to the China–Europe trains into the new DB Cargo Eurasia sales unit. These services do not only include terminalto-terminal products and door-to-door services. DB Cargo Eurasia also takes on commercial and operational responsibility as an operator, and markets transport capacity and storage space to logistics providers. A new office in Shanghai has helped establish direct contact with customers in China and also ensures close on-site collaboration with DB Schenker.

“We work together with DB Cargo and we coordinate closely with them”, explains Daniel Wieland, Vice President Multimodal & Dedicated Solutions at DB Schenker. “As a freight forwarder, we offer transport on a door-to-door basis and organise the first and last mile in our own network.”

Wieland considers this collaboration the be-all and end-all when it comes to doing an even better job of meeting customer requirements. “The market is getting tougher, especially along this corridor,” says Wieland. “As DB, we still have a pioneering role, but we aren’t going to keep it automatically.”

That is because other rail operators and logisticians discovered the advantages of the route long ago: rail is poised on the cusp of exponential growth. A study by the consultancy Roland Berger shows that rail holds considerable potential for bringing containers from ships and planes onto the railway. For the coming 10 years, their study of rail in container traffic forecasts annual growth of at least 10%. Soon, up to 20 container trains every day could be setting off on the long path between the continents.

Then the momentum will really take off, with rail continually outdoing its own success. Rail not only connects continents; it has also left its mark on the economies of the countries concerned and spurred trade policy collaboration along the corridor.

The trains both bring goods and kick-start the economies of many regions in Europe by easily and rapidly linking their industries and markets to China. From Nuremberg to Trieste, from Lyon to Duisburg: the transshipment railway stations that were originally conceived as hinterland centres are experiencing a completely new dynamic, despite the fact that they are so remote from the sea, from large ports or traditional trade routes (or maybe precisely because of that fact).

Centuries ago, the history of trade was penned by seafarers. Today, it is train drivers who are linking together continents, countries and their peoples.

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