China-EU freight trains see costs drop 40%

Insider suggests reducing internal logistics competition

The overall freight costs for China Railway Express (CR Express), rail cargo services between China and Europe as well as other regions, have dropped by about 40 percent since the early stages of the service in 2011, an official from China’s top economic planner said on Monday.

In 2017, the number of CR Express train journeys increased to 3,673, up 116 percent over the previous year. The number also surpassed the total figure of all the CR Express services during the previous six years, Yan Pengcheng, spokesperson for the National Development and Reform Commission (NDRC), said at a press conference on Monday.

Yan said CR Express has grown into a “China Solution” for international overland transportation.

A logistics operator in South China’s Guangxi Zhuang Autonomous Region said that the service could grow better if internal competition between logistics centers can be reduced.

Guo Xin, general manager of Nanning Xinjinhang Logistics Co, said that now there are too many areas running the service, which disperses the competitive strength of CR Express.

“More support should be allocated to a few regional centers, so that these routes are fully loaded with cargo. The internal competition between localities in China reduces the competitiveness of the train service,” Guo told the Global Times on Monday.

Guo’s firm has operated cargo services for the CR Express link between Nanning in Guangxi and Hanoi, Vietnam since November 2017. The train service is 20 percent cheaper than transport by road, and takes about 20 hours to cover the 400-kilometer route.

Guo suggested that CR Express could give more emphasis to members of the Association of Southeast Asian Nations (ASEAN) and complete a loop along the Belt and Road initiative with links in countries such as Vietnam and Thailand.

Since China unified the CR Express brand in 2016, it has been developing rapidly and constantly improving in quality, Yan said.

CR Express has not only effectively promoted economic and trade exchanges among countries and regions along the routes it operates, but has also effectively boosted the progress of China’s economy, according to Yan.

As of 2017, CR Express had extended its services to 36 cities in 13 European countries from 38 departure cities in China. Compared with 2016, its foreign destination list has increased by 23 cities across five countries.

The 2016-20 blueprint for CR Express, issued in October 2016 by the NDRC, set a target of operating as many as 5,000 trains along these routes each year by 2020.

With an increased average speed of 120 kilometers per hour, travel time has been reduced from more than 20 days in the early stages to 12-14 days now, Yan said.

The supply of goods has also broadened, from IT products such as mobile phones and computers to clothes, food and auto parts, in order to reflect varying forms of production along the routes.