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The first "Shanghai" China-Europe Express is ready to go. A few days ago, Shanghai Customs announced that after more than a month of intensive preparations, it has completed the preparations for the first China-Europe train in Shanghai. It is reported that the first "Shanghai" China-Europe train will depart from Minhang Station on September 28, passing through Alashankou, Polish Mara, and finally arriving in Hamburg, Germany.

"The China-Europe Express is one of the important transportation methods linking the supply chain of China, Europe and Central Asia. It is of strategic significance to alleviate the current shortage of international transportation capacity, improve Shanghai's global resource allocation capabilities, and strengthen the function of opening hubs.", Deputy Shanghai Customs Port Supervision Office Director Zhao Honglin said.

Since the beginning of this year, ocean freight rates have continued to rise, causing many foreign trade companies to face the embarrassing situation of increasing orders but not being able to ship goods. Looking forward to the fourth quarter, under the traditional peak freight time and the increase in export demand for Christmas-related goods, can the China-Europe Express train become the key to breaking the situation? "Securities Daily" reporter launched an in-depth investigation on this.

Leading shipping company launches China-Europe freight train business

As an important part of the “Belt and Road”, the China-Europe Express is an important link connecting all parties, and has made positive contributions to ensuring the stability and smoothness of the international industrial chain supply chain and boosting the dual cycle.

"Securities Daily" reporters learned from China National Railway Group Co., Ltd. (hereinafter referred to as China Railway Group) that since the beginning of this year, the operation of China-Europe freight trains has maintained a strong growth trend. Increased by 32% and 40%, respectively, and the round-trip comprehensive heavy container rate reached 97.9%, which is 2 months ahead of last year and achieved an annual opening of more than 10,000 trains. Starting from May 2020, there will be more than 1,000 trains running in a single month for 16 consecutive months, and more than 1,300 trains will be running in a single month for 4 consecutive months starting from May 2021.

The head of the freight department of China Railway Group told the reporter of Securities Daily that since this year, China Railway Group has continuously improved the coordination mechanism at home and abroad in response to the strong demand for China-Europe freight trains, fully undertook the transfer of cargo sources by sea and air, and improved port throughput. , To strengthen transportation organization, improve operational efficiency, and continue to play the role of a strategic channel for smoothing Sino-European trade exchanges.

It is worth mentioning that in June this year, Maersk, the leading container shipping company, announced that it had entered the China-Europe freight train business. The person in charge of the Maersk train transportation project said that marine transportation now often encounters logistics bottlenecks. As an alternative solution, the China-Europe Express service is a good choice, which can provide added value by improving the flexibility of the supply chain. Maersk believes that it is easier for train transportation to deliver goods according to a predetermined schedule. The company has established a partnership with the German railway operator RTSB and will continue to expand train transportation services in the future.

At the same time, the "Securities Daily" reporter noted that many foreign trade companies and related supply chains have targeted China-Europe freight trains.

The semi-annual report of COSCO SHIPPING Holdings stated that the company's China-Europe Express service continues to play an active role in building a more comprehensive integrated logistics system, as well as in the development of foreign trade and the construction of the “Belt and Road”. In the first half of the year, the company's China-Europe railway trains, the new western land-sea corridor, and the China-Europe-Europe-Sea Express Line increased rapidly, with year-on-year growth rates of 54%, 79%, and 20% respectively.

Liu Xiangdong, deputy head of the Economic Research Department of the China International Economic Exchange Center, said in an interview with a reporter from the Securities Daily that, compared to shipping, although the cost of the China-Europe train is slightly higher, the transportation time is short, the container transportation is convenient, stable and efficient, and the cost is higher. The natural environment has little impact, especially for the transportation of anti-epidemic supplies. The transportation time of about 20 days is only one-third of the sea transportation, which is time-saving and labor-saving than sea transportation, and the replacement is less difficult and the loading speed is fast. Therefore, many companies choose this channel to transport goods.

China-Europe Express trains have been extended to over 50 days

Since the beginning of this year, international trade has rebounded with the recovery of the global economy. As a large trading country, my country's overseas orders are flying to domestic foreign trade companies like snowflakes. However, the shortage of containers and port congestion have caused the price of containers to rise, causing the cost of shipping to continue to rise. "Securities Daily" reporters have previously reported on the surge in orders on the one hand and the increase in freight costs on the other. Many foreign trade business owners have mixed ups and worries.

In the face of poor shipping, many European-oriented foreign trade companies naturally set their sights on the China-Europe Express. Zhejiang China Commodity City Group Co., Ltd. stated on the interactive platform of the Shanghai Stock Exchange that the construction of a new transportation channel on Kia Europe by China-Europe Express has become a bridge between China and the world for mutual benefit and win-win results. The China-Europe train departing from Yiwu is listed as the "Yixin Europe" train, which transports commodities from the Yiwu market to five countries in Central Asia and Europe. Affected by the epidemic, overseas shipping and air transportation channels are unstable, container spaces are "difficult to find", and export costs are rising. "Yixin Europe" China-Europe Express is actively accepting air and sea transportation to transfer cargo sources.

Mr. Liu, the head of the China-Europe railway transportation business of Xiaofeixia, said in an interview with a reporter from the Securities Daily that in terms of the company's China-Europe railway transportation situation this year, the business volume in the second half of the year was higher than that of the first half. On the one hand, the second half of each year is the peak time of transportation, and the volume of freight will be greater than that of the first half of the year. On the other hand, when shipping costs continue to rise, some customers will indeed switch to China-Europe Express.

However, the substantial increase in transportation volume has also made the China-Europe Express train somewhat "unbearable." Recently, there have been port congestion, extended timelines, and cargo detention. The reporter saw in a freight forwarding group that a train company issued an announcement on September 6th, saying, “In August, due to the prevention and control of the port epidemic, the transformation of the marathon station, the strike of the German railway industry, and many other factors, the export port In the case of congestion, extended customs clearance for reloading, and stagnation of trains along the route, 16 trains of container cargoes that have been accepted have been stranded."

Jinhua Tiepai Supply Chain Management Co., Ltd. is characterized by the international railway transportation of the “One Belt One Road” China-Europe Express. The company’s general manager Shao Fei told the “Securities Daily” reporter that since this year, the demand for China-Europe Express is higher than before. “Due to the impact of the epidemic, many cargoes cannot be sent by sea, so customers will choose to ship them by rail. However, railway resources are limited and it is difficult to meet the needs of many customers.”

"Currently, foreign epidemics are repeated. The epidemic prevention and control testing of exported goods is strict, and the trains need to be changed in Xinjiang. The time limit has indeed been extended in the case of increased shipments," Mr. Liu told reporters. It takes about 15 to 18 natural days to pick up at the station, and about 20 to 35 natural days in the first half of this year. At present, the longest may be more than 50 natural days. "If the time limit has been extended, the customer will be notified in advance before placing the order, and the customer will choose whether to take the China-Europe train according to the schedule of the goods."

Capacity is expected to remain tight in the fourth quarter

Although the current capacity of the China-Europe Express is in short supply, compared with the timeliness, many foreign trade companies who are discouraged by the shipping price are more concerned about the transportation price of the China-Europe Express. The reporter learned in the interview that due to factors such as capacity limitations, the freight rates of China-Europe Express have also increased, but the increase is not high compared to the changes in shipping prices.

According to Mr. Liu, the freight rate of China-Europe Express is still in a relatively stable state. "Different from China and the United States, which mainly rely on sea transportation, there are also many options between China and Europe, such as China-Europe Express and Qatar Airways. Therefore, the freight rate will not fluctuate too much. But now it is in the peak period of delivery, especially when it is approaching. At Christmas, the transportation volume of related commodities has increased, so the price of China-Europe Express has also increased. The current price of a 40HQ container is approximately US$16,000 to US$18,000, an increase of approximately US$2,000 to US$3,000 from the beginning of the year."

According to the weekly report of China’s export container shipping market published by the Shanghai Shipping Exchange, a reporter from "Securities Daily" showed that on September 24, the Shanghai Shipping Export Container Comprehensive Freight Index was 4643.79 points. Among them, in terms of European routes, the freight rate (sea freight and ocean freight surcharges) for exports from Shanghai to the basic European port market is USD 7,551/TEU. On January 8, Shanghai's comprehensive export container freight index was 2870.34 points. Among them, in terms of European routes, the freight rate (sea freight and surcharges) for exports from Shanghai to the European basic port market is US$4,452/TEU.

1TEU can be simply understood as a 20GP container. In theory, 20GP can hold a cargo volume of about 28 cubic meters, and 40HQ has a volume of 68 cubic meters. According to the conversion, 40GP is about 2.4TEU. Combining the above data, it can be calculated that, currently, the prices of ocean freight and China-Europe Express trains are almost equal. However, since the beginning of the year, shipping prices on European routes have risen by nearly 70%. According to the changes in European freight rates provided by Mr. Liu, the largest increase was about 23%. It is not difficult to find that the increase in freight rates of European freight trains is much lower than the increase in freight rates of European routes, further verifying that the freight rates of China-Europe freight trains are relatively stable.

"When the demand is far greater than the supply, the price will naturally rise accordingly. After the railway capacity is close to the critical point and the'hard to find one cabin' becomes the norm, the price increase of the China-Europe Express is also inevitable. At the same time, the current China-Europe Express is congested. The same problem as delays needs to be resolved. Stabilizing the supply chain and international trade requires the joint efforts of all parties. Shippers and forwarders must make long-term psychological preparations.” Shao Fei said that as part of the service trade, Jinhua Iron Group will follow suit. The pace of the country has contributed to the improvement of services for the “Belt and Road” construction.

Mr. Liu said that the company has already received many orders for the fourth quarter, coupled with the increase in shipments brought about by Christmas, it is difficult to change the situation of the extension of the transportation time limit. Therefore, foreign trade companies also need to make reasonable arrangements for the delivery time in advance.

"At present, the sea freight price that has continued to rise has been comparable to the land price. From a trend point of view, the prices of both will remain high at least in the fourth quarter. This is due to the increase in logistics costs caused by the repeated epidemics and the increase in the cost of raw materials such as fuel. Impact. As the recovery of global demand accelerates, it is expected that the tight supply and demand of transportation capacity will be difficult to change in the short term." Liu Xiangdong believes. In addition, despite the rapid growth of China-Europe Express, shipping is still the main force in the transportation of bulk commodities.