Wednesday, April 8, 2020

Multimodal Groupage Options Open as Freight Increases on the Iron Silk Road

Virus Has Increased Sea and Airfreight Rates and Reduced Cargo Capacity
Shipping News Feature

CHINA – EUROPE – It seems the Covid-19 outbreak has reinvigorated the Silk Road multimodal cargo services which we saw developing support last year. In the UK freight forwarding outfit Davies Turner reports that its direct, fixed-day, weekly rail import service from China to the UK, which re-commenced in mid-March, has broken the previously achieved record transit time.

The weekly groupage service that has recommenced departs the Xi’an rail hub, directly into Duisburg in Germany. Containers are then trucked under bond to the nearby port of Rotterdam and transported by ferry to Purfleet, near Dartford for on-carriage by truck to Davies Turner’s distribution centre, where they are discharged, customs cleared and the goods delivered. Tony Cole, head of supply chain services commented:

“While air and ocean freight shipments face significant capacity and schedule issues, the first consolidated container that left China after we restarted our direct Express China Rail service into the UK in March arrived and was unpacked at our Dartford freight hub after just 17 days. That is several days or a full week ahead of the scheduled transit time from the Xi’an rail hub to our Dartford depot of 24 days, and beats the previous record achieved last year of 18 days.

“We moved one 40 foot groupage container on the first service in mid-March; but this has already risen to two on subsequent departures. Such is the demand in the market, I believe it could rise to three per week very soon, in addition to full container loads. After we launched the dedicated weekly direct consol service in November 2018, we saw it go from strength to strength prior to the outbreak of the Covid-19 virus in China.

”Bookings had increased continually. So it is great news that from the restart of the service, it has already returned to pre-crisis levels. And, boy, does the industry need some good news at the moment! Our direct Express China Rail service is clearly demonstrating that it offers a competitive alternative to air freight in regards to price, and considerably faster transit times compared to the ocean freight alternative.”

Philip Stephenson, chairman of Davies Turner was in agreement saying he foresees the even faster transit times will prove attractive to shippers as a viable alternative mode, and commenting many shippers may now be persuaded to rethink their supply chains, seeing a lot more Asia-Europe air and ocean freight traffic moving permanently to the rail freight option.

Meanwhile Austrian headquartered logistics group cargo-partner agreed, saying the drastically increased freight rates and capacity shortages from Europe to China via air- and seafreight has led it to introduce two new weekly LCL direct connections between Duisburg and Hefei as well as between Linz and Xi’an. With a transit time of around 16 days, it claims numerous customers are now making use of the rail transport solutions.

The Fischamend based company operates from Duisburg to Hefei every Saturday, consolidating goods from its range of European transport hubs, including Italy, whilst it operates from Linz to Xi’an every Friday, including pickup from Central and Eastern Europe as well as distribution throughout all of China. Transit times for both the weekly departures each average around 16 days.

The company says alleviating the need for transhipment on this direct LCL service enables fast door-to-door transit times and helps avoid the risks of unloading and reloading, prompting CEO, Stefan Krauter to comment:

“The new Iron Silk Road has been a success story for a long time, even before the current crisis. We are convinced that it will become even more important in the future, not just for shipments from East to West, but also for eastbound transports.”

Since rail transport is up to 50% faster than seafreight and up to 60% more cost-efficient than airfreight, it is not surprising that an increasing number of shippers are trying the multimodal options on offer, with the added ability for the carriers to play the environmentally green card, rail offering a big reduction in CO2 production.

Photo: Image courtesy of Esther Horvath.