Just when it seemed like the industry was getting used to a 10,000-kilometer rail journey as a commercially viable mode though which to ship 21st century freight, DHL Global Forwarding (DHL-GF) unveils a new long and winding iron road from China to Europe with an even unlikelier twist: Two water hazards.
In December 2015, DHL-GF inaugurated a rail-to-sea-to-rail southern corridor route that is the newest part of the Silk Road Economic Belt, created under China’s ambitious “One Belt, One Road” project, which is expected to carry more than US$2.5 trillion worth of international trade within the next decade.
On this new route, westbound railcars carry cargo from Lianyungang, China, through Kazakhstan and cut to the southwest toward the shore of the Caspian Sea, where intermodal containers are off-loaded to ships and sailed to Baku, Azerbaijan, on the far shore. There, the containers are reloaded onto railcars, sent through Georgia to the Black Sea port of Poti, where they meet yet another ship that sails the cargo to Istanbul, Turkey. Once in Istanbul, the containers are sent on by truck or by rail to various points across Europe. Total transit time should average 14 days, DHL said.
If the project sounds complicated, that’s because it is (click on this GIF image for greater clarity). The rail corridor is also backed up by a “contingency trucking service” between Azerbaijan, Georgia and Turkey via DHL-GF’s three existing services via its North and West multimodal corridors, which most recently expanded to connect Taiwan with Europe via China.
Most notably, this new southern route avoids crossing through Russia entirely. Is this to avoid older Russian railway infrastructure – including low bridge crossings that prevent double-stacking intermodal containers – or to avoid more potential political fallout from the policies of Russian leader Vladimir Putin?
“Negotiating the complex transnational requirements that span the Silk Road Economic Belt is no easy task,” said Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific. “It requires a deep understanding of the varying regulatory and infrastructural conditions in each market, robust partnerships with local-market experts and authorities, and experience in brokering cross-border connections without compromising on overall speed and efficiency.”
To bring the rail/sea deal to life, DHL signed a memorandum of understanding (MOU) with Kazakhstan Temir Zholy Express (KTZ Express), Kazakhstan’s national multimodal operator, to provide the critical rail link through Central Asia. DHL also worked closely with China, Azerbaijan and Georgia Railways; with the governments of all three countries; and with Karvan Logistics and RTSB Logistics.
Despite the complexity of the undertaking, DHL says there is still strong demand for a land cargo route through the region. “Trade between China and countries along the Silk Road has grown 19 percent every year on average for the past decade,” said Steve Huang, CEO, DHL-GF, China. “Turkey already counts China as its second-largest source of imports, and the EU as its largest export market.”
Such Eurasian rail projects began about six years ago, with the pioneering efforts of forwarders DB Schenker and DHL-GF. Today, there are many similar containerized rail services on the same Silk Road tracks being operated by top forwarders and integrators, such as Panalpina, Kuehne + Nagel, Kerry Logistics, UPS and UTi.