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The freight rate has jumped, why are companies willing to "take" the train?

2021-07-29

In the context of the massive demand in the Asia-Europe freight market and the hindrance of global shipping, the safe and efficient transportation advantages of China-Europe Express have been highlighted. As shipping prices continue to rise, the freight rates of China-Europe Express have also shown a linkage effect.

"At present, the sea freight price from coastal ports to Europe has exceeded US$10,000/40-foot container, and the China-Europe Express has also risen to about US$10,000/40-foot container.” Deputy Manager, International Transportation Department, Sinotrans Chongqing Branch Xie Yuanpeng has been serving customers of shipping and China-Europe Express for a long time, so he is more sensitive to the price changes of China-Europe Express and shipping.

Xie Yuanpeng said that before the epidemic, the price of most China-Europe express lines remained at US$3,000/40-foot container to US$5,000/40-foot container. After the outbreak of the epidemic, the price of shipping “hard to find” has skyrocketed, the China-Europe freight train market has grown substantially, space has also been tight, and prices have risen.

Nevertheless, in the face of the continuous setting of historical records for freight rates on European and American routes, and the epidemic caused congestion and delays in important ports around the world, more cargo owners have chosen China-Europe Express.

The leading construction machinery company, Zoomlion, used to ship by sea. Now, in order to be able to catch the China-Europe freight train, it has specially modified and adjusted the size of large-scale machinery and equipment to meet the size requirements of the freight container. According to Ye Hongbin, the general manager of Hunan Zhongnan International Dry Port Co., Ltd., the operator of the China-Europe Express (Changsha) route, the logistics plan of the Changsha-Minsk special train has shortened the logistics time of Zoomlion by nearly two-thirds.

The faster the goods are shipped out, the less liquidity it takes up. The company knows very well how to calculate this account. "The current train price is understandable and acceptable as a user." The person in charge of the brand in the southwest region of ASUS Computer said that the cost of railways was originally higher than that of sea transportation. Under the background of the epidemic, sea transportation to Europe will take at least two months. It is also "hard to find a box". It usually only takes about 15 days for the China-Europe Express to arrive in Europe. When the prices are similar, companies are willing to choose the China-Europe Express.

"As long as the difference between the China-Europe Express and sea freight does not exceed US$1,000 per 40-foot container, everyone will use the China-Europe Express." said Yin Guofeng, the person in charge of Zhejiang Yiwu Boya Balloon Co., Ltd.

One of the reasons for the increase in freight rates of China-Europe express trains is the increase in rail transportation costs caused by the epidemic and changes in the supply and demand markets. "The off-season is not short, and the peak season is more congested. The epidemic has changed the cargo delivery cycle and logistics methods." Jin Lixian, secretary general of Yiwu International Freight Forwarding and Warehousing Association and head of Yangxiang International Logistics Co., Ltd., told reporters that many seaborne cargoes have been transferred to China-Europe trains. .

“A period when the market is in short supply is suitable for cultivating the true sources and enterprises of China-Europe Express trains.” Zhou Xiaoqian, senior manager of the Supply Chain Division of Sinotrans Co., Ltd., said that low-value products gradually withdrew after the jump in freight rates, giving way to the railway profession. The high value-added products of transportation give way to the long-term loyal customers of China-Europe Express.

The pace of market-oriented reform of China-Europe freight trains has continued. In the case of space shortages, all regions have insisted on developing specific markets and products and cultivating specific customer groups. Such as Yixinou "Chunli" Shengzhou tea train, Chengdu China-Europe train cross-border e-commerce B2B export train, Yuxinou electronic product train, etc.

The opening of special trains makes it easier for enterprises and markets along the railway to reach them. In 2020, the “Yixinou” Geely special train will open 101 trains to realize point-to-point land transportation from the factory, so that the logistics of Geely factories passing by the China-Europe train will become a network, reducing costs and driving production and sales. The Geely factory in Belarus is one of the beneficiaries. Cheng Wenan, leader of the Geely Group's Belarusian large-scale project team, said that Geely's market share in Belarus' new car market will increase to 20% in 2020.

On the other hand, changes in market supply and demand have also contributed to the normalization of the return of China-Europe freight trains, attracting more local export and manufacturing companies in Europe.

Finnish Minister of Development Cooperation and Foreign Trade, Ville Skinnery, stated that since the opening of the first China-Europe train between Kouvola and Xi’an in 2017, Finland has many routes connected directly to China. Important cities. "Even companies in Finland's neighboring countries Sweden and Norway have discovered these new routes, and the increase in transportation routes brings more flexibility to Chinese and Nordic companies." Ville Skinnery said.

At the same time, operators of China-Europe Express trains in various regions have accelerated their "going global" deployment overseas, actively participating in competition in the international transportation market through cooperation in the construction of overseas hubs, overseas warehouses and end-haul logistics, and improving the overall operating capabilities of China-Europe Express overseas. .

"I believe that there will be more space for railways in the large-scale logistics tenders in the future." Lin Huihuan, general manager of Yitong Europe Logistics Co., Ltd., the main freight forwarding company of Yixin Europe China-Europe Express, said that railways will become a major logistics enterprise. Necessary choice, railway, air transport, and sea transport together form an international logistics supply chain.


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