China Trade

From Silk Road to Silk Rail

  • Why it matters

    Why it matters

    Deutsche Bahn is struggling with falling passenger numbers and hopes its growing cargo business will help offset the fall.

  • Facts

    Facts

    • In 2016, 40,000 containers will have been carried by train from Germany to China via Poland, Belarus, Russia, Kazakhstan and Mongolia.
    • By 2020, it is expected to be 100,000 containers.
    • Journeys via the 10,000 to 12,000km long routes normally require 12 to 16 days, half the time of a sea voyage.
  • Audio

    Audio

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Containerverladung in Duisburg
The rail port in Duisburg is likely to thrive as Deutsche Bahn increases its China rail services. Source: DPA

The Ruhr valley in northwestern Germany may have been hit hard by the decline of coal and iron, but the rise of China, and the revival of the Silk Road between Europe and Asia, has given the area’s rail ports new life.

Deutsche Bahn, Germany’s state-owned railway, said Thursday that it will ramp up cargo transport to China, providing yet another boost for the region.

Every week, nine trains roll in from China to the loading bays of the Duisburg port and vice versa. They bring in electronics for European consumers and transport machines and components in the other direction.

Trade with China is blossoming at Logport 1, where decommissioned Thyssen plants were rusting away just a few years ago. In the 300th year of its existence, Duisburg’s port is the most important hub for railway trade with China.

Deutsche Bahn operates most of the German trains heading to China. If they have anything to do with it, then Europe’s largest inland port will also be one of the crucial trading centers for trade with Asia in the future.

The rail operator said that, for the first time, 40,000 containers will have completed the route through Poland, Belarus, Russia, Kazakhstan and Mongolia by train this year. By 2020, it is expected to be 100,000 containers.

Journeys via the 10,000 to 12,000km long routes normally require 12 to 16 days. This includes loading the containers several times onto wagons with different rail gauge.

They do not all arrive in Duisburg. Container trains also head to Regensburg in the south and Hamburg in the north of Germany, but Duisburg was the first destination for such a land connection. And port director Erich Staake hopes that his Lower Rhine trading center will profit from it.

That is why Duisport, Duisburg’s port authority, has begun to develop partnerships on this new Silk Route toward China. The planned reactivation of the historical Silk Route as a third route to China, albeit by rail this time, will integrate further countries like Turkey in the transport network. Logistics centers along this route are expected to bring more freight onto rail.

Journeys via the 10,000 to 12,000km long routes normally require 12 to 16 days. This includes loading the containers several times onto wagons with different rail gauges.

While a container ship could carry 10,000 to 18,000 containers, it would need roughly twice as long for the journey. For industries, such as textiles with time-sensitive goods like promotional products, or capital-intensive products like automotive parts and electronics, that is too long. The train provides a faster alternative.

Deutsche Bahn wants to build more relationships like the one it has with BMW. It began working with the car maker in 2011, transporting vehicle components from Leipzig and Regensburg to the BMW assembly plant in the western Chinese city of Shenyang.

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German car manufacturers dismantle more than 63,000 vehicles per year into their individual parts before exporting in order to bypass import duties. Experts refer to this as a Complete Knock Down. BMW, for example, primarily sends its “1 Series” models by train to Shenyang in single components.

There, Deutsche Bahn subsidiary Schenker has invested €20 million in a new logistics hub to provide other car manufacturers and suppliers with components. Trains will then be able to pick up Hewlett Packard and Asus computer technology from the Chinese city of Chongqing on the way back to deliver them to Duisburg’s port within two weeks.

Dieter Fockenbrock is Handelsblatt’s chief correspondent for the companies and markets desk, focusing on corporate governance, opinion and rail transport. To contact the author: fockenbrock@handelsblatt.com

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