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Quality Development of China-Europe Freight Trains Promoted by Various Measures

2019-06-18

By Wang Wei & Li Hanqing

Research Report Vol.21 No.3, 2019

Through years of rapid development of China-Europe freight trains, the freight trains steadily grow in number and they radiate influence upon an expanding area, with the freights growing more diversified. The operation of the freight trains has gone from the initial phase of market cultivation to the critical phase of “improving the quality and enhancing the effectiveness”. A number of problems arise during the process of development. For example, some local subsidies disturb the market order; the operation of freight trains between several cities only has symbolic significance; the no-load ratio for return trips is high; routes in operation urgently need improvement; and infrastructure construction is faced with bottleneck problems. Government departments concerned should allow the market to further play its decisive role in resources allocation, facilitate the improvement of related supportive policies, and promote the operation of China-Europe freight trains to change from “end-to-end” to “hub-to-hub”. These measures may strengthen the high-quality development of China-Europe freight trains, drawing a picture of fine and delicate strokes on the Belt and Road Initiative.

I. China-Europe Freight Trains have become the most effective Vehicle for pursuing the Belt and Road Initiative

1. The operation has gone from the phase of market cultivation to the phase of rapid development

Since they came into operation in 2011, the China-Europe freight trains have showed an explosive growth in number from 17 in 2011 to 3673 in 2017, with an annual increase rate of 145%. The biggest increase rate, 285%, was recorded in 2014. Since 2017, the growth has been slowing down. In 2018, the number of China-Europe freight trains in operation reached 6300, 72% more than the previous year, which indicated that the operation had gone through the phase of market cultivation with rapid increase of the number of trains and entered the new phase of rapid development.

2. More cities have been included in the operation and the agglomeration effect of the hubs starts to show

At the end of 2018, China-Europe freight trains went through 56 cities in China and operated along 104 routes, with three main routes passing through Manzhouli, Erenhot and Alataw-Khorgos Pass in the east, middle and west respectively. Some large central cities among the 56 have regular freight trains going through every week. In 2018, the number of freight trains going through Chengdu, Chongqing, Xi’an, Zhengzhou and Wuhan was 1591, 1442, 1235, 752 and 417 respectively, amounting to 5437 and accounting for 86.3% of the total. They have become large hubs for China-Europe freight trains and their clustering and driving effects have started to show. For example, Xi’an carries out multimodal transportation (road/rail & sea) in cooperation with ports of Qingdao and Ningbo. Besides, it works with inland cities (such as Xiangfan) and enterprises (such as Nippon Express) for operation of freight trains. Therefore, the clustering and radiation-mobilization effects of hubs have been enhanced, which pushes the number of freight trains to increase rapidly.

3. With the expanding influence and increased driving effect, China-Europe freight trains function an important cooperation platform for pursuing the Belt and Road Initiative

The first city that China-Europe freight trains reached is Duisburg, Germany; and now, the traffic network for the trains includes 49 cities of 15 countries outside China. In 2018, 1108 freight trains reached Duisburg; 649 Rhodes/Nuremberg; and 238 Moscow; all of them accounted for 54% of the total. In terms of freight categories, commodities on the outgoing trip include electronic products, textiles, machinery and equipment, chemical products, etc. while those on the return trip include automobiles and their spare and accessory parts, machinery and equipment, articles of everyday use, food, timber, paper pulp, etc. It is obvious that China-Europe freight trains have been working as links and bridges for China and European countries to complement each other’s advantages and conduct economic and trading cooperation. The operation of freight trains preliminarily unleashes the potential of road/rail logistics and trading channels in Eurasia, providing a powerful boost to the economic and trading cooperation between China and the countries along the Belt and Road.

4. Cultivation of major service suppliers has achieved initial success and the service system of cross-border logistics has basically taken shape

Platform companies have been established in different locations to serve the operation of freight trains, providing a lot of services for the collection and distribution of commodities on freight trains. The transportation all along the way was undertaken by China Railway International Multimodal Transport Co., Ltd. (CRIMT), an affiliate to China Railway, together with railway companies of the countries along the routes. Freight trains via Alataw Pass are mainly operated by China Railway and Trans-Eurasia Logistics (TEL), a subsidiary to Deutsche Bahn (DB); the freight trains via Manzhouli are mainly operated by China Railway and Far East Land Bridge (FELB), a subsidiary to Russian Railways (RR). Moreover, the operation of China-Europe freight trains has attracted the participation of large international logistics enterprises, such as DHL of Germany and Nippon Express of Japan, which provide services for the collection, distribution and delivery of the freight at home and abroad. Thus, the service system of cross-border logistics with the participation and cooperation of Chinese and overseas enterprises has taken shape.

5. The coordination mechanism has been preliminary formed and the unified brand building for China-Europe freight trains has been actively promoted

In order to advance the steady operation and to promote the healthy development of China-Europe freight trains, China Railway issued The Development and Construction Plan of China-Europe Freight Trains (2016–2020) in 2016, and set up operating and overall planning organizations, such as customer service centers and dispatching desks. Afterwards, in response to the initiative proposed by related departments and China Railway, the thematic coordination mechanism for China-Europe freight trains, transportation coordination board for China-Europe freight trains, and joint transportation working group for China-Europe freight trains have been established successively. Exchange and cooperation mechanisms have been established in relation to policy coordination, cooperation of domestic platform enterprises and collaboration between Chinese and overseas railway transportation enterprises, etc., thus initiating the explorations on how to strengthen consultation and collaboration and how to innovate the ways for cooperation. Moreover, China Railway is devoted to pushing forward the brand building, advertising, and promotion of China-Europe freight trains and is determined to maintain the consistency of China-Europe freight trains in regard to brand marking, standardization of containers, etc. The goal is to make the brand of China-Europe freight trains a “gilded signboard” in real sense of the term in pursuing the “Belt and Road” Initiative.

II. Existing Problems

Though the operation of China-Europe freight trains has achieved good results, during the process of rapid development, problems arise, including scattered stations, overlapped routes, lack of goods supply for freight trains in some cities, a high no-load ratio on return trips, bottleneck problems concerning infrastructure and relevant unreasonable policies. The State and relevant departments should pay great attention to these problems.

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