HomeWorld NewsWhy companies are turning to long-haul trains

Why companies are turning to long-haul trains

The practice was carrying greater than three dozen 40-foot containers, every stuffed with goods equivalent to social gathering balloons and automotive elements, from Xi’an to Paris. It had traveled via China, Kazakhstan, Russia, Belarus, Poland, Germany and France, making the journey in 5 and a half weeks.

“Five years ago, there were eight trains per day between China and Europe, now there are 18, 20 trains per day,” stated Xavier Wanderpepen, director of the China-Europe freight trains at French nationwide railway firm SNCF.

Rail shipments are particularly well-liked with companies that want to transfer perishable or time-sensitive items and don’t need to pay for air cargo. Containers can journey between Europe and China by way of rail in as few as 20 days, whereas a journey by sea can take up to 70 days with disruptions brought on by the pandemic. But rail has its limitations: trains can’t carry almost as many containers as ships, they usually are not immune to logistics snafus associated to the pandemic.

The practice that CNN Business tracked from China to France, for instance, was almost two weeks late arriving in Paris due to site visitors on the tracks, prolonged customs checks on the Polish border and a scarcity of practice drivers in Germany brought on by the pandemic.

Still, extra trains are coming.

Launched in 2011 as a part of Beijing’s Belt and Road infrastructure program, the China-Europe rail service expanded shortly because the pandemic wreaked havoc on world delivery, making it rather more costly to ship merchandise by way of sea.

A document 15,000 freight practice journeys have been made between China and Europe in 2021, up 82% from the pre-pandemic whole in 2019, in accordance to Chinese state media. The trains carried 1.46 million containers.

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The variety of trains between France and China doubled between 2019 and 2021, in accordance to Wanderpepen, although France got here to the market later than different European international locations.

The sharp improve in rail site visitors is already inflicting overcrowding on the tracks and placing infrastructure below stress, which means that trains between Europe and China supply solely a restricted various to ships — the biggest of which carry greater than 20,000 20-foot containers.

Containers shifting between Europe and China should be switched to new rail automobiles twice, as soon as on the China-Kazakhstan border and once more on the Poland-Belarus border, since former Soviet international locations use a unique rail gauge than China and Europe.

“We can say that today there are too many trains,” stated Wanderpepen.

From disaster to alternative

The huge community of ports, container vessels and trucking companies that strikes items all over the world stays badly tangled two years into the pandemic, and the price of delivery has skyrocketed.

“We have congestion at seaports; we have a shortage of containers because transportation volumes went up,” stated Felix Papier, a provide chain administration professor at France’s ESSEC enterprise faculty. “We have a shortage of logistics workers in different segments around the world.”

Production at 45% of French companies was restricted by provide difficulties, in accordance to October survey knowledge revealed by the nation’s National Institute of Statistic and Economic Studies. That’s the best degree because the institute started releasing such knowledge in 1991.

Aerial view of Valenton, France, freight station, destination of the 6,000-mile train journey from Xi'an, China.

Moving items by sea has turn out to be rather more costly. As of January 6, the typical price of transporting a regular 40-foot delivery container on eight main routes was $9,408, 5 instances what it was simply earlier than the pandemic broke out in early 2020, in accordance to London-based Drewry Shipping.

For comparability, shifting one container from China to Paris by way of rail prices round $8,000, in accordance to Wanderpepen. Going the opposite manner, that falls to roughly $2,000 thanks to Chinese authorities subsidies aimed toward encouraging European companies to use the practice to export to China.

That has made trains extra enticing.

French luxurious furnishings maker Ligne Roset is one the companies behind the surge in demand.

Since the start of the pandemic, Nicolas Mazuir, head of the corporate’s transport division, has battled rising costs and restricted delivery house to ship sofas and chairs to clients across the globe.

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“It’s the first time I’ve experienced a situation like this,” he stated.

When delivering to clients in China, a market that represents roughly 20% of Ligne Roset’s world enterprise, rail was a lifesaver for Mazuir, who began utilizing it in 2020.

“All our Chinese customers expect us to deliver quickly,” he stated, “Railway solutions offer a real advantage, even if there are far fewer [trains]. It is a real advantage in terms of time.”

From Ligne Roset’s manufacturing facility outdoors Lyon, Mazuir can dispatch merchandise on a freight practice to China, which is able to normally solely take 4 to 5 weeks to attain its vacation spot.

If delivery by sea, the corporate would have to first transport the containers roughly 200 miles south to the Mediterranean coast. Delays of up to one month are potential if cargo ships skip the port close to Marseille, an more and more widespread occasion through the pandemic.

“I wish there was a comparable solution for the US market,” Mazuir stated.

A train carrying 50 containers departs from China's Shijiazhuang International Land Port to Malaszewicze port in Poland on September 9, 2021.

‘The trains are again’

With the pandemic coming into its third 12 months and instances rising shortly due to the Omicron variant, consultants say that provide chain stress will proceed for a while.

The transport sector nonetheless wants to rebuild its networks, together with hiring again port employees and truck drivers, lots of whom switched jobs throughout lockdowns, in accordance to Papier.

“I think that in terms of overall congestion levels, in terms of transportation costs, we will always stay at a higher level than … before the crisis,” he stated.

That may imply a much bigger position for trains. Rail accounts for less than 5% of the overall transport market between Europe and China. But that might double by 2030, in accordance to Wanderpepen.

Watching the products from Xi’an offloaded for onwards supply to French companies, the rail govt was upbeat.

“Now the client knows this solution and will keep this solution, even if the situation of troubles with pandemic logistics in the world return to something normal,” he stated. “The trains are back.”



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