Trends & Markets 02/18

EU and CHN draw closer together

Bridge building for the new silk road

China’s mega project, the New Silk Road including the sea route and land bridge, is designed to enhance international trade between Asia and Europe in the long term by providing more efficient infrastructure. Using its closely linked network along the Silk Road, Rhenus Air & Ocean has also specialised in these markets; this has
taken place as a result of decades of experience and the development of its services in conjunction with its colleagues at Rhenus Intermodal Systems and Rhenus Road. Rhenus has particularly developed the relevant products for the new transport corridors along the land bridge and they combine the skills available at the different Rhenus business units, as Peter Cramm, Product Manager Landbridge Europe at Rhenus Air & Ocean N.V., and Carol Kong, Product Manager Landbridge Greater China at Rhenus Logistics China Ltd, explain.

Carol Kong
Carol Kong

Peter Cramm
Peter Cramm

Alte Handelsroute

Old trading route between China and India

Ms Kong, what exactly is the New Silk Road and why are we hearing so much about it at the moment?
Carol Kong: The New Silk Road, where transport operations can be handled quickly, efficiently and without any gaps, is a scheme that has already existed for a long time. In addition to a project published by the European Union in 1993, people everywhere are mainly talking about China’s “Belt and Road Initiative” at the moment. The infrastructure project, which was launched by State President Xi Jinping in 2013, is set to cost about USD 1.1 trillion over the next decade and seeks to expand the intercontinental trade and infrastructure networks between the People’s Republic of China and 64 other countries in Asia, Africa and Europe.

And what exactly does the “Belt and Road Initiative” involve?
Carol Kong: Firstly, it concerns the Silk Road economic belt, which constitutes the overland route across China, Western Russia, Iran, Turkey, Pakistan as well as Central and Western Europe. Secondly, the international seaports in South-East Asia to the south of China, in the Middle East, East Africa and Europe are due to be upgraded for the Maritime Silk Road to meet modern requirements.

Europa und China kommen sich näher

What does Rhenus specifically provide for these transport routes, Mr Cramm?
Peter Cramm: In general, the air and sea routes and overland transport services from China to Europe have been part of the Rhenus portfolio for a long time. It’s precisely this expertise that now enables us to pool all our products and services, both for air and sea transport operations and the land bridge. The current concept for the land bridge is a profitable alternative to these long-established transport routes. By adding the land bridge, we’re giving our customers another reason to select Rhenus as their partner.

Ms Kong, which services does Rhenus offer its customers in China regarding the land bridge to Europe?
Carol Kong: We offer our customers a so-called “one stop shop solution”. Our customers expect us to provide rapid delivery times that are cost-efficient and easy to quantify. They make a booking for transport services and we look after the rest – whether this involves customs clearance, warehousing, consolidation, picking and value-added services, the transport operation or making deliveries to final customers. We’ve had many years of expertise in handling these routes and we offer part and complete loads and consolidation services there.

Which sectors are being targeted for services on the New Silk Road?
Carol Kong: We’re initially concentrating on consumer goods, high-end entertainment electronics and vehicle parts on the east-west route.
Peter Cramm: Our target group for the west-east route involves supplying spare parts for various industries and transporting different types of machines and cables – as well as steel pipes.

What makes the Rhenus services special?
Peter Cramm: We don’t just view the land bridge as another transport route between China and Europe, but as a solution that provides genuine value added for our customers’ supply chains. We’re currently working on solutions for the land bridge where we link our services with those offered by Rhenus Road Freight East for the first and last mile. Supported by a strong and integrated IT solution, it’s possible to imagine this being like a “one click order” on the Internet, which then covers the complete supply chain.

How do you expect the market for the land bridge to develop?
Carol Kong: These kinds of transport services were normally enquiries made at short notice or involved individual consignments in the past. We’re now seeing stronger demand for regular flows of goods along the land bridge. Based on this, we assume that more and more customers will demand products for these routes – as alternatives to their existing solutions by sea, for example, if delays occur along their supply chain and if air freight solutions aren’t a viable option.

What are the challenges that Rhenus faces on these routes?
Peter Cramm: Greater interest in these markets also means more containers being transported via the land bridge. Our greatest challenges are therefore planning and providing reliable transport services as well as preventing bottlenecks at peak times. Rhenus has already introduced appropriate solutions here. We’re prepared for bottlenecks in terms of equipment too, for example, by having our own fleet of containers.
Carol Kong: Each supply chain has its own requirements, like night-time pick-ups or specific handling instructions for fragile goods. We check each challenge that we face and develop the relevant solution to cope with it.

What benefits does Rhenus offer for international cross-border transport services?
Carol Kong: Our greatest advantages are our flexibility and having teams that are very well coordinated. Our customer’s supply chain is extremely important to us. That doesn’t mean that we’re changing our processes every day, but we keep our eye on developments in the market place so that we’re prepared for any difficulties at border crossings, possible delays or technical problems at the hub platforms. We immediately share any changes within the team and develop emergency plans and backup solutions.

Since the start of the land bridge service in 2011, Sino-European trains had made more than 9,000 journeys along the New Silk Road and had transported about 800,000 TEUs between 48 Chinese and 42 European cities by June 2018.

Landbrücken- Services

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