US shippers feel the pain as rail and road freight rates soar
US importers and domestic shippers are facing more pain from increasing road and rail freight ...
Such is the burgeoning success of the Asia-Europe rail landbridge that several of the largest forwarders have begun to expand their services on the trade.
Previously, logistics providers focused solely on marketing entire trains dedicated to the cargo flows of major clients – mostly out of the automotive or hi-tech sectors – before last year beginning to offer full container load (FCL) services to other shippers who might not have the volume to warrant an entire train.
Now, in recent weeks, forwarders have begun to offer less-than-container load (LCL) services to shippers – a move that has opened up Asia-Europe rail services to a whole new class of customers, and is leading some freight service providers to see explosive growth.
“According to our data, we are the third-largest booker of cargo on these routes,” Matthias Hansen, Geodis’s vice-president of EMEA region, told The Loadstar at the Transport Logistic show in Munich earlier this year. “We are seeing growth of around 500% in terms of volumes, although that is coming from a very low base.”
Although use of the landbridge had hitherto been restricted to high-value goods, where blue-chip shippers were looking to save on freight rates and develop alternative supply chains should their major routes face disruption, Mr Hansen said the service was now open to a whole range of shippers.
“It’s not only high-value cargo – and it has been designed to make it very easy to book your containers, because we have created enough critical mass.
“We are transporting car parts like engines and gearboxes, a lot of computers which aren’t flown and even a little bit of textiles. It is a real alternative to the sea-air product via Dubai, because the 18-day transit time means retailers can react to different seasons in the same way they do when shipping goods by sea from China to Dubai and then air freighting into Europe,” he said.
In recent weeks, both DHL and UPS have launched LCL services on a twice-weekly train between the inland Chinese manufacturing hub of Zhengzhou and Hamburg that compete directly with air freight services.
Zhengzhou is Cargolux’s air freight hub in China, but the airport has also seen other air freight carriers pull services after finding themselves unable to fill their aircraft.
UPS said shippers using its China-Europe FCL rail service saw cost savings of up to 65% versus air freight, and time savings of nearly 40% compared with ocean services, while both DHL and UPS stressed the considerable emissions reductions compared with air freight.
The first Asia-Europe rail services of the modern era were developed in a joint project involving China Railways, Russian Railways and Deutsche Bahn, with the services marketed by the latter’s logistics arm, DB Schenker. In recent years a southern route transiting Kazakhstan has also been developed.
Mr Hansen said the landbridge also gave major shippers an alternative should existing tradelanes suffer disruption.
“It is useful to have a solution if there are problems elsewhere, such as cargo rollovers for ocean freight at Chinese ports,” he said.