On the right lines: Chinese rail link trains transporting heavy machinery. The link into Europe also moves 100 boxes a week.
SHIPPERS in remote northwest China are using a rail-ferry link into Europe as they seek alternative supply chains to bypass congested Chinese ports.
Advance International, a project cargo freight forwarder with headquarters in Turkey, is moving an average 100 containers a week out of China via the Caspian and Black Seas to destinations in the former Soviet Union and western Europe.
Jawad Kamel, president and chief executive of Advance International, said: “Time and money is of the essence to our customers. Given the port congestion in China, plus rising freight and bunker charges from the shipping lines, it is very competitive for Chinese shippers in the northwest of the country to move their goods by train.”
Launched two years ago, the rail link begins at Urumqi, 250 miles from the border with Kazakhstan but still more than 1,500 miles from China’s port network.
Advance International uses maritime containers which have already completed a ferry and rail journey from Europe into central Asia — Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan and Tajikistan.
Containers destined for Kazakhstan are emptied and sent into China, where the whole intermodal process begins in reverse. Advance acts as consolidator and logistics overseer, hitching container wagons to available trains and managing the complex intermodal supply chain.
From Urumqi the rail wagons travel via Almati in Kazakhstan to the Caspian Sea port of Aktau, where they are loaded on to a Caspian Shipping ferry for a 25-hour sailing to Baku in Azerbaijan.
From Baku the journey continues across Georgia by rail, first to the capital Tbilisi and then to the Black Sea port of Poti where connections are made with the daily container feederships.
Adds Mr Kamel: “The seven feeder services operators at Poti include Maersk Line, EMA, MSC and Norasia. Poti has only one container terminal, so each line has one day to go in, discharge and load.”
The intermodal link utilises spare rail haulage capacity in a dense network of nearly 30 trains a day between Poti and Baku, transporting oil and related cargo throughout central Asia.
Although the port itself is free of congestion, occasionally some outbound cargo has to wait a week for the right feeder vessel connection.
Mr Kamel, with 44 years in the business and rail ferry experience dating back to the 1970s with the London International Freight Terminal, observed: “It is a bit like using the old European rail ferries which used to run to Hamburg, Rotterdam, Antwerp, Dover and Zeebrugge.”
He said Chinese exporters in remote parts of the country are turning to intermodal rail and ferry links because they work out faster than queuing at a port.
“All the export traffic from northwest China has to go a thousand miles or more to the ports of Shanghai and Qindao and all the other Chinese ports which are waiting for vessels,” he said.
The train from Urumqi to the Kazakh border, where there is a change of track gauge, takes two days. Other than the usual border bureaucracy, the transfer is relatively pain-free.
Some heavy or non-standard cargo may have to wait between 10 and 15 days for a suitable wagon, although Mr Kamel said that forward planning normally reduces the waiting time.
He said: “The journey between northwest China and Poti can take 11 days, while the alternative can take two to five days to Shanghai and maybe wait one or two weeks for a vessel, if you are lucky.
“The Chinese ports are very congested.
Some boxes are having to wait up to five weeks. The sailing time between Chinese ports and Suez to north European ports can take between 24 and 28 days.
“Our service is old mainly in China on a cost, insurance and freight basis for the goods. The shippers are not bothered if the goods are coming by ship or by rail.
“Given the current container shipping rates out of the Far East to Europe, we are very competitive by train and the economy of scale is there.”
Asked whether there is an increased chance of theft along such a long supply chain with so many modal interchanges, Mr Kamel replied: “If you were talking 15 years ago, in the former Soviet Union, then I would have agreed that there was a problem.
“In those days, thieves would go in through the roof of a container and the goods would be stolen.
“But in the two years that we have been running this service there have been no incidents and our insurers, HSBC, have had no claims to deal with.”
If there is a bottleneck, then it is the Caspian Shipping ferry service between Baku and Aktau, which currently offers three services per week.
Mr Kamel said that the operator is looking to run a second ferry service from the middle of next year, which would make 200 container slots available each week for non-oil cargo.
He concluded: “It is important to note that more than 90% of the factories and industrial organisations within the former Soviet Union have rail sidings and are still rail connected. The wagons can go right into the main station and then be shunted to the factory.”
Jawad Kamel, president and chief executive of Advance International, said: “Time and money is of the essence to our customers. Given the port congestion in China, plus rising freight and bunker charges from the shipping lines, it is very competitive for Chinese shippers in the northwest of the country to move their goods by train.”
