East Asian success story
DB Cargo has been operating on the New Silk Road for eleven years running now, with steady gains in cargo volumes. The boom shows no sign of ending.
The trans-Eurasian corridor is one of the world's most interesting globalisation projects, and it has a lot to offer the rail sector. Dr Carsten Hinne is the senior vice-president of Chinese corridor development at DB Cargo AG, and he says, "China is expanding rail services on a massive scale in order to mitigate against the climate impact of road traffic." The rail freight operator wants to be part of this growth and step up its transport capacity still further. What was one single freight train in 2008 has since grown into several connections weekly between various industrial centres in China and Europe. "DB Cargo has recently increased the transport volume to around 85,000 general purpose containers a year (TEUs), and we want to break the 100,000 TEU barrier in 2020," Hinne says.
As part of its efforts to expand its economic and political influence, China is also investing billions in the countries where the destination points of the Belt and Road Initiative are located. For example, Piraeus, Greece's largest port, has already been in Chinese hands since 2008. Sri Lanka has also signed the port of Colombo over to China in exchange for debt forgiveness.
In light of these developments, the German government takes a positive yet sceptical view of the initiative. Speaking at last month's transport logistic trade fair in Munich, transport minister Andreas Scheuer said, "Very powerful national interests are what are at stake for China. However, we welcome every route that offers more opportunities than restrictions." A current World Bank study is also considering the benefits and risks for poorer countries that want to take part in the New Silk Road: the transport projects could spur trade and cut poverty, but infrastructure costs could lead countries to rack up public debt, which for some could exceed the benefits. In addition, the World Bank is calling for greater transparency when public contracts in connection with the New Silk Road are bid out and awarded.
From the customer point of view, the rail freight connection to and from China has significant advantages: with average journey times of 14-16 days, trains are faster than ships, cheaper than planes, and climate friendly to boot. More and more companies appreciate these qualities.