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UTi Worldwide has become the first non-European freight service provider to open up a landbridge container transport link between China and Europe.
Accessing what is traditionally the domain of European 3PLs, especially those with national rail companies as major shareholders, such as DB Schenker and Geodis, US freight forwarder and contract logistics provider UTi has formed a joint-venture with local Chinese firms to provide weekly box rail services from the northern Chinese city of Harbin to the German port of Hamburg.
HAO Logistics is a joint-venture between UTi, independent Chinese automotive logistics provider Changjiu Logistics, Harbin Railway Bureau and Dalian Port Investment Corp, and is “offering promotional pricing through 30 September 2015 to encourage current and prospective clients to try the Iron Silk Road rail service”.
The first service departed Harbin last week, with 41 containers booked on its eastbound leg and 46 containers on the westbound leg, and included automotive equipment, consumer goods and other freight, and Ditlev Blicher, president of freight forwarding at UTi, said that other routes would be developed and other types of cargo targeted.
“This is only the first link in our Iron Silk Road rail service and only one of the many ways we are serving the logistics requirements of automotive, aerospace and other manufacturers,” he said.
As with other Asia-Europe intermodal services, shippers are being offered a medium point between cut-price, ocean shipping services with nearly a month’s transit time and high-speed, high-cost air freight options. The UTi service features lower freight rates than air and shorter transit times than ocean – 15 days, eastbound or westbound.
It said other major destinations throughout northern China and northern Europe, including ports, “are accessible within a few days without additional on-carriage charges”.
The service is the culmination of a partnership agreement signed in February between UTi and its partner Changjiu Logistics which was specifically designed “to serve the logistics requirements of global automotive original equipment manufacturers and suppliers in the automotive market in China”, according Transport Intelligence’s (Ti) recent Global Freight Forwarding 2015 report.
Ti ranked UTi as the fourteenth largest global freight forwarder – fourteenth in air freight in terms of tonnes and fifteenth in terms of teu booked – despite the fact that 2014 was an annus horriblis for the company, with it booking around 25% less revenue than the year before, as previously reported by The Loadstar.
However, Ti said that the company’s geographical diversity remained one of its key advantages.
“A particular strength of the company is its presence and local knowledge in a number of emerging markets, which is reflected by the balance of the company’s revenues sources by geographic region: in 2014, 32.8% of the total was derived from the Americas, 24.5% from Europe, Middle East and North Africa, 24.3% from Asia-Pacific and 18.4% from Africa,” it said.