Sino-Europe rail link to boost trade

Updated: 2011-06-03 10:55

By Yang Yang (China Daily)

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Freight route connects antwerp to chongqing

Sino-Europe rail link to boost trade
Containers are packed at the port of Antwerp in this file photo in the Belgian city. The new rail line linking Chongqing and Europe's second-largest port is expected to further promote trade between the two sides. [Provided to China Daily]

A new transcontinental rail freight route connecting Southwest China's Chongqing municipality and Antwerp in Belgium is set to open a new page for booming trade and logistics between the two regions.

The European Union has already replaced Japan as China's top source of imports, the Ministry of Commerce said earlier this month.

Trade between the two sides in the first quarter of the year amounted to $170.01 billion (121 billion euros), up 23.5 percent year-on-year.

Trade volume between the two sides in 2010 reached $479.72 billion, up 31.8 percent from that in 2009 when the global financial crisis reduced the trade to $364.1 billion, China's customs figures show.

"Sino-Europe trade continues to grow fast," says Li Wenxue, vice-president of Logistics Association China (LAC).

"Rapid growth in trade brings about a large logistics market for the transport of goods between the two regions," Li says. "The new rail link places Chongqing in the spotlight of Sino-Europe trade. Many European countries want to seek opportunities through this rail line to boost their trade with China."

Last year, Chongqing's exports grew by 58 percent year-on-year, one of the fastest among all inland cities, figures from the port of Antwerp showed.

Compared with coastal cities that export much more than they import, Chongqing maintains a more balanced proportion between exports (54 percent) and imports (46 percent), the figures show.

Europe's second-largest port is situated on the other end of the new rail link, which started operating on May 9. Last year alone, the throughput of Antwerp port reached 178 million tons. The second-biggest rail hub in Europe sees off 250 trains every day.

The new route, from Antwerp over Germany and Poland to Ukraine, Russia, Mongolia and China, will initially run one train a day on the 10,000-kilometer trip, which will take up to 25 days but is expected to be shortened to 20 days, making it a quicker route between Europe and China than deep ocean shipping.

Since May 9, trains loaded with high-value goods, such as motor parts and electronics, have been heading for Antwerp.

The rail already halves the transport time of Hewlett-Packard laptops from the maker's notebook computer production base in Chongqing for export to Europe, from the original 20,000 kilometers by sea to 10,000 km by train, the Chongqing Daily newspaper reported.

Trains from Antwerp heading for Chongqing mostly carry petrochemical cargo since Antwerp has the largest chemical cluster in Europe, with seven out of the 10 main international companies having a production site there, the port of Antwerp reported.

"This is very good news," says Alex T. Kuo, general manager of Kunming Firmenich Aromatics Co Ltd under Firmenich SA, a leading perfume and flavor business.

"We export our products to Europe only by sea. The trip from Kunming to Rotterdam usually takes 45 to 48 days. And if the rail link can reduce the cost and time, we will definitely choose it," Kuo says.

Transportation by sea is much cheaper than by train but it is also longer, says Annik Dirkx, communications manager of Antwerp's port authority.

"We believe transport by train is interesting for cargo that has a high value, where the total amount of the transport costs are less important than the fact that the goods are fast and safe at their final destination," Dirkx says.

For companies, "safety is the biggest concern", says Song Wuqiang, president of Europe Chinese Enterprise Logistic Association.

"Unlike shipping, containers carried by train have to be transferred in different countries along the line. Without proper management, they will possibly be misplaced and we will have trouble in that case," Kuo says.

Another major concern is the punctuality of trains, Song Wuqiang says.

"Apart from safety concerns, most companies choose ocean shipping because the time can be guaranteed. The service chain has formed through years of experience," Song says.

LAC's Li Wenxue says the rail route is also safe. But security problems threaten ocean shipping between China and Europe through the Suez Canal or the Cape of Good Hope, Li says, adding that "the chance of encountering attacks at sea is much bigger than on land".

Liesbeth Fransen, manager of international business at POM Antwerpen, the government organization in charge of the economic promotion of the Antwerp region, has said that "Belgian customs is intensifying contacts with all related customs authorities of the countries the rail connection is passing by. These intensified contacts should help regarding the safety of the rail connection".

The route's daily service is offered through the cooperation of the Swiss-intermodal operator Hupac, Russkaya Troyka and Eurasia Good Transport, with additional support provided by the Development Authority of the Province of Antwerp, the Antwerp Port Authority and the Belgian Administration of Customs & Excise.

To limit delays, Belgian customs will exchange information with the customs services of the transit nations and China when a train departs, to avoid unnecessary delays, European Business Review reported.

Countries along the line including Russia are also improving the railway system to meet the needs of the daily train freight trip.

With the time and safety ensured, more companies will choose rail transport and "this will change China's export transport headed for Europe, which currently relies mainly on sea shipping", Li Wenxue says.

"The time spent on the rail line is half of that at sea, which is the advantage and value of this rail freight route. It will boost Sino-Europe trade," Li says.

POM Antwerpen's Liesbeth Fransen says it has received "many requests from all kinds of companies dealing with a broad range of products" in the past weeks.

"This proves the interest of the private sector in this rail connection," Fransen says.

Companies from Germany, Belgium, Hungary and Austria have come to China to consider setting up logistics companies or agencies in Chongqing, and discussed the utilization the link to promote the development of the trade between China and Europe, Li Wenxue says.


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