Eurasian Land Bridge
Via container trains from Europe to China and back
About three weeks of transport time and not less than a 10,000-kilometer journey: DB Schenker Develops Eurasian Land Bridge as an Alternative Transportation Route between China and Europe
The first container train of 2012 departed from Chongqing Loading Yard in Sichuan Province on its return journey to Germany in the end of March. After temperatures as cold as minus 30 degrees Celsius brought the trains, which are loaded with temperature-sensitive freight, to a halt for the winter, one train now travels to Germany via Moscow every Friday. The weekly transport is commissioned by a customer in the electronics industry, which has production facilities in Chongqing, a city of some 30 million people.
The company has relied on the Eurasian Land Bridge as an alternative route for the exchange of goods between Asia and Europe for some time. Last year, DB Schenker was contracted to operate eleven of these dedicated company trains.
DB Schenker has operated trains from Germany to China since September 2011. It supplies automotive parts and components to BMW’s new automobile plant in Shenyang on behalf of the car manufacturer. One train loaded with 40 containers heads eastward from the sidings at the Leipzig logistics center for BMW every day. Over 120 DB Schenker Rail container trains loaded with over 4,700 containers have traveled from Leipzig to Shenyan for BMW so far. One BMW train also departs for Shenyang from Wackersdorf every week.
Production in the Chinese hinterland – long distances to the ports
Both of DB Schenker’s services have one thing in common: they begin or end in the Chinese hinterland. Many multinational corporations have production facilities in Chongqing, the “city of light” on the Yangtze River, one of the world’s largest and fastest-growing metropolises. Goods are exported from Chongqing to Europe primarily by ocean or air freight. But it takes around three days just to transport containers from Chongqing to a Chinese seaport. The Germany-bound train traveling via the Eurasian Land Bridge can complete half of its journey in the same amount of time.
Our product is especially attractive given the time it takes for containers to travel from the Chinese hinterland, the arrival in the center of Germany and the ability to redistribute containers quickly and safely from there to their final destinations. With a maximum capacity of 100 FEU (40-foot equivalent units – one FEU is equivalent to one 40-foot container), a container train can only transport a fraction of the freight a container ship can.
Ocean freighters can carry up to 10,000 TEU on board. The train’s freight costs are therefore higher than ocean freight prices, which have recently increased considerably, however. Rail’s primary advantage is its transport time. Rail transport from terminal to terminal is roughly twice as fast as shipping by ocean-going vessel. Overland transport by rail also pays off for products that need to be transported quickly but at a lower cost than by air freight, including sale items in the clothing industry, electronic equipment and heavy goods.
Transport time between 20 and 23 days, depending on the route
Two routes are used for the exchange of goods depending on the destination in the vast country of China: a northern route along the entire Trans-Siberian Railway and via northern Mongolia or a southern route via Kazakhstan. The 10,000 to 12,000-kilometer journey takes 20 to 23 days. Trains cross several countries and time zones, change gauges and are operated by multiple rail companies.
Each train must undergo at least two changes of gauge during the journey on the world’s longest rail route. China uses the same gauge as Europe, while Belarus, Russia, Mongolia and Kazakhstan use broad gauge.
Along the different routes through Asia, the change between normal gauge (1435 mm) and broad gauge (1520 mm) takes place in Erlian/Zamyn Uud at the Mongolian-Chinese border, in Zabaykalsk/Manzhouli at the Chinese-Russian border or in Dostyk/Alashankou at the Chinese-Kazakh border. The containers change gauges again on the European section of the route in Brest/Malaszewicze on the border between Belarus and Poland. Cranes transfer the containers to carrier cars with the correct gauge. Locomotives and locomotive drivers are switched out at every national border.
Joint venture coordinates operations
Deutsche Bahn and Russian Railways (RZD) founded Trans Eurasia Logistics (TEL) in early 2008 to handle transport operations and to coordinate the rail companies involved in the international project. DB Schenker’s national companies are responsible for marketing the trains.
The Chinese, Mongolian, Russian, Belarusian, Polish and German rail companies are involved in developing the Eurasian Land Bridge. Close cooperation between the companies is necessary to establish competitive products on the market since processes involve a wide range of technical and organizational conditions, including different electrical systems, operating regulations and customs procedures. Moreover, cooperation greatly reduces customs procedures and handling processes at the borders. The rail companies aim to continue to standardize legal formalities for freight by using consistent documents throughout the journey and electronic data interchange. In addition to improving processes at border crossings, the companies hope to speed up quote creation and provide end-to-end transport information to customers.
Market access with DB’s own networks and consolidated transports to and from China
The container trains operated on behalf of BMW mark DB’s successful entry into the Chinese market. Other automobile manufacturers have already expressed interest in the product. In the future, DB aims to transport containers in particular to and from the CIS states and Asia. In addition to the weekly block trains between China and Europe, it is planning other products between Europe and the CIS states, between the CIS states and China, and between western China and the Baltic states.
The Chinese transportation and logistics market will continue to be marked by rapid growth and enormous economic potential in the future. Growing freight transport within China coupled with continuing shifting of production facilities to the hinterland offers potential for rail and combined transport – both of which are core areas of expertise of DB.
In China, established business relationships, market access with DB’s own networks and a local presence are key for tapping and participating in growth. DB has created an excellent starting point in Asia. DB Schenker has had a presence in many of these markets for decades and maintains good relationships with the rail companies in the region.
DB Schenker has been involved in a joint venture in Chongqing for a few weeks, whose aims include consolidating volumes and optimizing terminal-to-terminal transports from Chongqing.
At the international level, the objective is to consolidate transports from different provinces since the additional cost of providing and leasing containers and the cost of transporting empty cars drive up rail transport prices. One solution DB is working on is regular container runs with capacities evenly distributed between runs and fewer empty runs.
Last modified: 31.05.2012