2. China Europe Railway, Benefits & Challenges
b y A l a n S o
Alan So
CFR RINKENS LLC
Little Background
• 20 years freight and logistics experience in HK and China
• Start work in the China Europe railway since 2014 after
join KTZE, Kazakhstan state own company
• Currently work for CFR Rinkens who is a US company
specialize on the finished vehicle logistics, base in
Chongqing at the moment
2
3. China Europe Railway, Benefits & Challenges
b y A l a n S o
Logistics
Between China
and Europe
Sea Freight, air freight and Rail Freight
3
4. China Europe Railway, Benefits & Challenges
b y A l a n S o
Connect East and
West
In an efficient way
4
5. China Europe Railway, Benefits & Challenges
b y A l a n S o
Chongqing was the top one in consecutive year from 2014, railway solution help a lot on the trading in Chongqing, for
those cities have block trains go to Europe, highlighted as below.
5
GDP Growth in 2014-2016
List of GDP Growth 2014 List of GDP Growth 2015 List of GDP Growth 2016
Rank Cities Billion Change Rank Cities Billion Change Rank Cities Billion Change
1 Chongqing 1426 11% 1 Chongqing 1610 11% 1 Chongqing 1755 10.70%
2 Tianjin 1572 10% 2 Hangzhou 1010 11% 2 Hangzhou 1105 9.50%
3 Shenzhen 1552 10% 3 Changsha 860 9.70% 3 Shenzhen 1949 9.00%
4 Wuhan 1017 10% 4 Tianjin 1720 9.40% 4 Tianjin 1788 9.00%
5 Chengdu 1005 9% 5 Nanjin 960 9.20% 5 Guangzhou 1961 8.20%
6 Guangzhou 1670 9% 6 Shenzhen 1750 8.90% 6 Nanjin 1050 8.00%
7 Wuxi 873 8% 7 Wuhan 1100 8.80% 7 Qingtao 1001 7.90%
8 Suzhou 1350 8% 8 Guangzhou 1810 8.30% 8 Wuhan 1191 7.80%
9 Beijing 2133 7% 9 Qingtao 940 8.20% 9 Chengdu 1217 7.70%
10 Shanghai 2311 7% 10 Chengdu 1080 8% 10 Suzhou 1547 7.50%
6. China Europe Railway, Benefits & Challenges
b y A l a n S o
Number valid to 2018
6
Number of Block Train
Year Number of Block trains Remarks
2011 Started Trial
2012 Less than 50 Under Trial
2013 80 increase 90%
2014 308 increase 285%
2015 815 increase 165%
2016 1702
increase 109% in total and
increase 116% for return
2017 3673 increase 116%
2018 3500 Forecast
2019 4000 Forecast
2020 5000 Forecast
0
1000
2000
3000
4000
5000
6000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
NUMBER OF BLOCK TRAINS
7. China Europe Railway, Benefits & Challenges
b y A l a n S o
With the China Europe railway…
• Provide a shorten transit time than sea freight
• Cheaper solution than air freight
• Help for inland factory and consumer while normally
inland transport always expensive
• Provide a logistics solution for a product for new market
• Shorten cycle time for financial benefit
• Environmental friendly
Benefits
For the trade, logistics and end
users
7
8. China Europe Railway, Benefits & Challenges
b y A l a n S o
What China Europe railway
faces…
• Speed is key in railway, still need to shorten the time to
enhance the benefit for railway solution.
• Customs among different country now is not a big
problem, but need to make sure all the documents are
fit for railway requirement, still have few cases happen
in Poland and China.
• Route in Europe still not cover too much points, mainly
Duisburg and Hamburg (Madrid, Munich)
• Imbalance trade, cost for wagon and containers.
• Subsidy was the hot topic when we talked about China
Europe Railway. (Drop/Phase Out)
Challenges
Technology, customs, route, trade
balance and subsidy
8
9. China Europe Railway, Benefits & Challenges
b y A l a n S o
FROM THE EUROPEAN PERSPECTIVE
• Customs
Documents
Communicatio
n
X-Ray in
Poland
• Routes
Infrastructure
(Terminal/Cont
ainer)
Trade support
Truck subsidy
Cooperation
between
platforms ?
• Imbalance
Trade
Container/wag
on
More
eastbound ?
Cooperation
between
platforms ?
Reefer
container
• Subsidy
Last for ?
Provincial
government
suffer ?
What is
healthy ?
Concern from
European.
9
Open discussion on the challenges
• Speed
Infrastructure
(terminal and
railway track)
Change gauge
Management
in peak time
Weather
10 days ?
10. China Europe Railway, Benefits & Challenges
b y A l a n S o
European
Perspective
Hesitation ?
• Not widely to use ? Price ? Service ?
• LC boundary ?
• Habit ? Culture ?
• No idea about inland service in China ?
• Have solution from service provider ?
• Concern the cost is high from logistics perspective but
no from financial perspective ?
• Subsidy ? Drop or phase out ?
• Case sharing on example, OEM, European railway
operator
10
11. China Europe Railway, Benefits & Challenges
b y A l a n S o
• Provincial government
• Railway platform company
• National railway operator
• Container leasing company
• Railway terminal (international)
• Service provider (GPS or other equipment)
• Customers
11
Technology
Sharing of Data
12. China Europe Railway, Benefits & Challenges
b y A l a n S o
12
Chongqing, 814 (14 Aug 2014), Mercedes, BMW and Volvo
Benefit to
Eastbound
• Eastbound
• Supported by
Chongqing
provincial
government
• Start of finished
vehicle customs
entry
13. China Europe Railway, Benefits & Challenges
b y A l a n S o
CARs in Container
Professional Finished Vehicle Logistics
Service Provider
13
CFR RINKENS LLC Business Entity
3PL formed in 1994
200 Employees
Forwarding, Warehousing, Trucking
Head Offices
Los Angeles, USA
Bremen, Germany
Chongqing, China
CFR Compounds & Offices
Los Angeles, Oakland, Houston, Miami, New York,
Bremen (Germany), Chongqing (China)
14. China Europe Railway, Benefits & Challenges
b y A l a n S o
BY Railway from Germany to China
14
Finished Vehicle Tender Case sharing
• 8,000-10,000 Cars per year with 5
years contract
• Using railway moving the cars from
Germany to Western Part of China,
change from sea freight
• Price has to be competitive
• Lead time has to be competitive
• Using block train preferable
• Has to fulfil the requirement in the
peak time
• Empty container provided at origin
15. China Europe Railway, Benefits & Challenges
b y A l a n S o
15
Suggestions against hesitation ?
• In view there is some challenges, any action ?
What we might can do
• Cooperation between platforms
• More professional promotion in Europe
• Connect with more shipping line on container
management in order to lower the container cost
• Speed up the transit time
• Discuss with trader on the incoterm
• Discussion with provincial government on subsidy
The Belt and Road Initiative development
• Supervise by China Railway with all the platforms ?
• Take the lead to have more professional road show in
Europe ?
• Talk with the big trader on this logistics solution ?
• Coordinate with all national railway company ?
• Trade Balance ?
• Speed ? 10 days ?
16. China Europe Railway, Benefits & Challenges
b y A l a n S o
China’s high-speed rail vision
Connect all over the World
16