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China Europe
Railway
Benefits &
Challenges
By Alan So
China Europe Railway, Benefits & Challenges
b y A l a n S o
Alan So
CFR RINKENS LLC
Little Background
• 20 years freight a...
China Europe Railway, Benefits & Challenges
b y A l a n S o
Logistics
Between China
and Europe
Sea Freight, air freight an...
China Europe Railway, Benefits & Challenges
b y A l a n S o
Connect East and
West
In an efficient way
4
China Europe Railway, Benefits & Challenges
b y A l a n S o
Chongqing was the top one in consecutive year from 2014, railw...
China Europe Railway, Benefits & Challenges
b y A l a n S o
Number valid to 2018
6
Number of Block Train
Year Number of Bl...
China Europe Railway, Benefits & Challenges
b y A l a n S o
With the China Europe railway…
• Provide a shorten transit tim...
China Europe Railway, Benefits & Challenges
b y A l a n S o
What China Europe railway
faces…
• Speed is key in railway, st...
China Europe Railway, Benefits & Challenges
b y A l a n S o
FROM THE EUROPEAN PERSPECTIVE
• Customs
Documents
Communicat...
China Europe Railway, Benefits & Challenges
b y A l a n S o
European
Perspective
Hesitation ?
• Not widely to use ? Price ...
China Europe Railway, Benefits & Challenges
b y A l a n S o
• Provincial government
• Railway platform company
• National ...
China Europe Railway, Benefits & Challenges
b y A l a n S o
12
Chongqing, 814 (14 Aug 2014), Mercedes, BMW and Volvo
Benef...
China Europe Railway, Benefits & Challenges
b y A l a n S o
CARs in Container
Professional Finished Vehicle Logistics
Serv...
China Europe Railway, Benefits & Challenges
b y A l a n S o
BY Railway from Germany to China
14
Finished Vehicle Tender Ca...
China Europe Railway, Benefits & Challenges
b y A l a n S o
15
Suggestions against hesitation ?
• In view there is some ch...
China Europe Railway, Benefits & Challenges
b y A l a n S o
China’s high-speed rail vision
Connect all over the World
16
Thank You
Alan So
+86 138 0889 5545
Alan.so@cfrrinkens.com.cn
www.cfrrinkens.com
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China Europe Railway : Benefits & Challenges

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International Guest Speaker Alan So speaks at the 5th China International Logistics Development Conference in Changsha

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China Europe Railway : Benefits & Challenges

  1. 1. China Europe Railway Benefits & Challenges By Alan So
  2. 2. China Europe Railway, Benefits & Challenges b y A l a n S o Alan So CFR RINKENS LLC Little Background • 20 years freight and logistics experience in HK and China • Start work in the China Europe railway since 2014 after join KTZE, Kazakhstan state own company • Currently work for CFR Rinkens who is a US company specialize on the finished vehicle logistics, base in Chongqing at the moment 2
  3. 3. China Europe Railway, Benefits & Challenges b y A l a n S o Logistics Between China and Europe Sea Freight, air freight and Rail Freight 3
  4. 4. China Europe Railway, Benefits & Challenges b y A l a n S o Connect East and West In an efficient way 4
  5. 5. China Europe Railway, Benefits & Challenges b y A l a n S o Chongqing was the top one in consecutive year from 2014, railway solution help a lot on the trading in Chongqing, for those cities have block trains go to Europe, highlighted as below. 5 GDP Growth in 2014-2016 List of GDP Growth 2014 List of GDP Growth 2015 List of GDP Growth 2016 Rank Cities Billion Change Rank Cities Billion Change Rank Cities Billion Change 1 Chongqing 1426 11% 1 Chongqing 1610 11% 1 Chongqing 1755 10.70% 2 Tianjin 1572 10% 2 Hangzhou 1010 11% 2 Hangzhou 1105 9.50% 3 Shenzhen 1552 10% 3 Changsha 860 9.70% 3 Shenzhen 1949 9.00% 4 Wuhan 1017 10% 4 Tianjin 1720 9.40% 4 Tianjin 1788 9.00% 5 Chengdu 1005 9% 5 Nanjin 960 9.20% 5 Guangzhou 1961 8.20% 6 Guangzhou 1670 9% 6 Shenzhen 1750 8.90% 6 Nanjin 1050 8.00% 7 Wuxi 873 8% 7 Wuhan 1100 8.80% 7 Qingtao 1001 7.90% 8 Suzhou 1350 8% 8 Guangzhou 1810 8.30% 8 Wuhan 1191 7.80% 9 Beijing 2133 7% 9 Qingtao 940 8.20% 9 Chengdu 1217 7.70% 10 Shanghai 2311 7% 10 Chengdu 1080 8% 10 Suzhou 1547 7.50%
  6. 6. China Europe Railway, Benefits & Challenges b y A l a n S o Number valid to 2018 6 Number of Block Train Year Number of Block trains Remarks 2011 Started Trial 2012 Less than 50 Under Trial 2013 80 increase 90% 2014 308 increase 285% 2015 815 increase 165% 2016 1702 increase 109% in total and increase 116% for return 2017 3673 increase 116% 2018 3500 Forecast 2019 4000 Forecast 2020 5000 Forecast 0 1000 2000 3000 4000 5000 6000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 NUMBER OF BLOCK TRAINS
  7. 7. China Europe Railway, Benefits & Challenges b y A l a n S o With the China Europe railway… • Provide a shorten transit time than sea freight • Cheaper solution than air freight • Help for inland factory and consumer while normally inland transport always expensive • Provide a logistics solution for a product for new market • Shorten cycle time for financial benefit • Environmental friendly Benefits For the trade, logistics and end users 7
  8. 8. China Europe Railway, Benefits & Challenges b y A l a n S o What China Europe railway faces… • Speed is key in railway, still need to shorten the time to enhance the benefit for railway solution. • Customs among different country now is not a big problem, but need to make sure all the documents are fit for railway requirement, still have few cases happen in Poland and China. • Route in Europe still not cover too much points, mainly Duisburg and Hamburg (Madrid, Munich) • Imbalance trade, cost for wagon and containers. • Subsidy was the hot topic when we talked about China Europe Railway. (Drop/Phase Out) Challenges Technology, customs, route, trade balance and subsidy 8
  9. 9. China Europe Railway, Benefits & Challenges b y A l a n S o FROM THE EUROPEAN PERSPECTIVE • Customs Documents Communicatio n  X-Ray in Poland • Routes Infrastructure (Terminal/Cont ainer) Trade support Truck subsidy Cooperation between platforms ? • Imbalance Trade Container/wag on More eastbound ? Cooperation between platforms ? Reefer container • Subsidy Last for ? Provincial government suffer ? What is healthy ? Concern from European. 9 Open discussion on the challenges • Speed Infrastructure (terminal and railway track) Change gauge Management in peak time Weather 10 days ?
  10. 10. China Europe Railway, Benefits & Challenges b y A l a n S o European Perspective Hesitation ? • Not widely to use ? Price ? Service ? • LC boundary ? • Habit ? Culture ? • No idea about inland service in China ? • Have solution from service provider ? • Concern the cost is high from logistics perspective but no from financial perspective ? • Subsidy ? Drop or phase out ? • Case sharing on example, OEM, European railway operator 10
  11. 11. China Europe Railway, Benefits & Challenges b y A l a n S o • Provincial government • Railway platform company • National railway operator • Container leasing company • Railway terminal (international) • Service provider (GPS or other equipment) • Customers 11 Technology Sharing of Data
  12. 12. China Europe Railway, Benefits & Challenges b y A l a n S o 12 Chongqing, 814 (14 Aug 2014), Mercedes, BMW and Volvo Benefit to Eastbound • Eastbound • Supported by Chongqing provincial government • Start of finished vehicle customs entry
  13. 13. China Europe Railway, Benefits & Challenges b y A l a n S o CARs in Container Professional Finished Vehicle Logistics Service Provider 13 CFR RINKENS LLC Business Entity  3PL formed in 1994  200 Employees  Forwarding, Warehousing, Trucking Head Offices  Los Angeles, USA  Bremen, Germany  Chongqing, China CFR Compounds & Offices Los Angeles, Oakland, Houston, Miami, New York, Bremen (Germany), Chongqing (China)
  14. 14. China Europe Railway, Benefits & Challenges b y A l a n S o BY Railway from Germany to China 14 Finished Vehicle Tender Case sharing • 8,000-10,000 Cars per year with 5 years contract • Using railway moving the cars from Germany to Western Part of China, change from sea freight • Price has to be competitive • Lead time has to be competitive • Using block train preferable • Has to fulfil the requirement in the peak time • Empty container provided at origin
  15. 15. China Europe Railway, Benefits & Challenges b y A l a n S o 15 Suggestions against hesitation ? • In view there is some challenges, any action ? What we might can do • Cooperation between platforms • More professional promotion in Europe • Connect with more shipping line on container management in order to lower the container cost • Speed up the transit time • Discuss with trader on the incoterm • Discussion with provincial government on subsidy The Belt and Road Initiative development • Supervise by China Railway with all the platforms ? • Take the lead to have more professional road show in Europe ? • Talk with the big trader on this logistics solution ? • Coordinate with all national railway company ? • Trade Balance ? • Speed ? 10 days ?
  16. 16. China Europe Railway, Benefits & Challenges b y A l a n S o China’s high-speed rail vision Connect all over the World 16
  17. 17. Thank You Alan So +86 138 0889 5545 Alan.so@cfrrinkens.com.cn www.cfrrinkens.com

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