THE HISTORIC SILK ROAD OVERLAND TRADE route between Europe and China has been revived as a result of the global COVID-19 pandemic.
A European digital freight-forwarding agency, which has been in business four years – taking online bookings for door to door truck transport and offering them to the 12,000 Continental carriers on its books – has seized the opportunity presented by the pandemic.
The airline industry’s virtual shutdown because of the COVID-19 emergency left an estimated $US222billion annual two-way trade between China and Germany reduced to a trickle.
With German companies desperate for electronics components sourced from China, InstaFreight was approached to explore a new supply chain.
InstaFreight discovered that a trucking route from China, through Mongolia, Kazakhstan, Russia, Belarus and Poland, was a viable option – even though it’s 10,000-kilometres each way, across the Eurasian Steppes.
That’s a trip that will take around three weeks, including time allowed for freight to be transferred to/from Chinese trucks at the Chinese border.
It tested the market in early April – a time when the death toll from COVID-19 was still rising across parts of Europe.
It began offering consignments between China and Germany – European truck owners bidding for the loads in online auctions.
Hundreds of operators with trucks capable of carrying 40 tonnes all-up responded within days.
Company co-founder Philipp Ortwein says that since then scores of trucks have made the huge trans-continental run – with “hundreds more” about to embark on the Silk Road experience.
“Digitalisation is emerging as a survive-and-thrive tool in the crisis and is credibly poised to shake down key economic sectors post-COVID,” says Ortwein.
The going rate for a 20t truckload of freight from China to Europe is reckoned to be around 15,000 Euros (approximately $NZ26,700), compared to one million Euros ($NZ1.78million) for a chartered aircraft capable of carrying 100t of freight. Thus the road freight cost is less than 10% of the cost of airfreight.
Normally, over half of Germany’s airfreight travels on passenger flights, which have been severely cut back in the COVID-19 crisis.
And according to InstaFreight, the backlog of airfreight at Chinese airports is such that the 20 to 22-day truck trip (depending on the pickup and unloading locations in Europe), is on a par with COVID-19-era airfreight delivery times.
Two-driver teams, offered at a surcharge, can take several days off the truck trip.
Germany was China’s biggest export market in Europe last year – importing mobile phones, computers, electronic components and household electronics. On the other hand, China was Germany’s biggest market for its machinery, cars, car parts, chemicals and electronic goods.
Says Ortwein: “As a freight forwarder it is our role in such times to be pragmatic and to find solutions to problems such as the current stagnant flow of goods from China to Europe.
“Our digital product as well as the agile structures help us realise such solutions with an adequate promptness. For systemically relevant goods, every day counts.”