The new Silk Road
is an “iron road”

Interview with Business Development Manager Paul Bakker

Silk and jade used to be brought from China to Europe on the backs of camels. But now it’s computers and phones, and they come by train. Transport along the New Silk Road is growing fast. Since mid-2016, New Silkway Logistics (NSWL) – an initiative of Royal Wagenborg, H. Essers, and KLG Europe – has been providing intermodal container transport from Venlo in the Netherlands along this rail link between China and Europe and vice versa with the Chongqing-Khorgos-Brest-Duisburg-Express.

Growth

Besides the northern route through Russia (the Trans-Siberian Express), a southern route has also been in use since 2012 via Kazakhstan, and this partly overlaps with the classic Silk Road. It is more than 11,000 kilometres long and passes through six countries. Container transport by train offers considerable advantages. It is much cheaper than by air and much faster than by sea. A consignment by train between the Chinese terminal in Chongqing and the German terminal in Duisburg takes fourteen days, whereas a container ship takes at least a month. 

Khorgos will be one of the largest logistics hubs in central Asia. Khorgos lies on the border between China and Kazakhstan. Since last summer, containers are transhipped here on Kazakh trains, because the Chinese and Kazakh railway track does not fit together.


Rail freight between major Chinese cities and Europe has developed rapidly thanks to the Chinese government’s “One Belt, One Road” policy. But the return flow of freight from Europe to China is also rapidly gaining in popularity. “It’s almost impossible to keep up with the growth,” says Paul Bakker, Business Development Manager for China. “Our operations department is growing rapidly so as to be able to provide the increasing number of clients with the door-to-door service that they’re accustomed to. It’s a great development!” The current EU-China service now runs twice a week. The ambition and expectation is that by the end of this year NSWL will be running its own trains to China.  


Besides the northern route through Russia (Trans-Siberian Express) the southern route via Kazakhstan is in use since 2012, which partly overlaps with the traditional Silk Road. The route is over 11,000 kilometers and traverses six countries.
Besides the northern route through Russia (Trans-Siberian Express) the southern route via Kazakhstan is in use since 2012, which partly overlaps with the traditional Silk Road. The route is over 11,000 kilometers and traverses six countries.

Khorgos

The growing popularity of the train link is partly due to the “Go-West policy” of the Chinese government. International companies were encouraged to move their factories to China’s interior so as to take the pressure off the busy Chinese coast and to develop the Chinese hinterland. That meant that alternative transport routes to Europe needed to be found. A new rail terminal was recently opened in the desert town of Khorgos, near China’s border with Kazakhstan. Paul Bakker explains: “Khorgos is right by the border between China and Kazakhstan and as the gateway to Europe it’s the pulsating heart of the new Silk Road. Since last summer, containers have been transferred there onto Kazakh trains because the Chinese and Kazakh rail gauges are different. Khorgos is going to become one of the biggest logistical hubs in central Asia.”

Return freight

The flow of goods from China consists mainly of electronics and is inexhaustible, so the trains from China to Europe are full. “There’s really only just one problem,” says Paul Bakker. “Not enough freight goes in the other direction by rail. That’s a pity because the rail connection is very reliable. Companies here in the West need to become more familiar with it.

The rail link in fact opens up enormous opportunities for European exporters. “But here people look too much to the West, whereas the real growth is in the East. That’s absolutely the case now that the Chinese middle classes have more money to spend and demand for Western products is increasing by leaps and bounds. You only need to think about pharmaceutical products and baby milk powder,” says Mr Bakker. 

Temperature-controlled containers

The US computer giant HP has also established itself in the megacity of Chongqing. To get products to Europe faster, the company looked to transport by rail. HP’s logistics director Ronald Kleijwegt points out that “Transporting goods by ship via Rotterdam to our distribution centre in Germany takes 35 to 37 days. By rail, it takes only 17 days, so about half the time. That’s a big advantage for us.” 

To protect HP’s valuable products against the extreme temperatures – down to minus 40 degrees Celsius – during the 11,000 kilometre journey, special Unit 45 special containers have been designed that automatically warm up or cool down throughout the transport period. After arrival in Duisburg, these temperature-controlled containers then offer opportunities for western exporters such as FrieslandCampina.



Paul Bakker explains: “At the moment, we transport a lot of powdered milk from Europe to China, so this is a promising development. Besides the significantly shorter transit time, the ‘track & trace’ capability and the ability to check the temperature in each container at any time are very much appreciated. It’s now important for Wagenborg, H. Essers, and KLG to really make an effort to boost familiarity with the train link with China. Otherwise, we’ll all miss the train.” 

Contact

New Silk Way Logistics
Columbusweg 10
5928 LC VENLO
+31 77 359 86 00
logistic@wagenborg.com
www.newsilkwaylogistics.com