WHILE the launch of China-Europe railway services on the southern route via Kazakhstan have made headlines, moves are afoot to develop the northern rail link through Russia.

Russian Railways Logistics CEO Pavel Sokolov and Zhengzhou International Land Port Development and Construction Co CEO Zhao Wenmin have signed an agreement to start container train services between Zhengzhou in eastern China and European destinations.

The container train service will use the existing terminal network along the trans-Siberian route, and the possible use of a Moscow logistics hub building.

Both sides will develop rail routes to and from Europe through Russia, including the use of a unified railway consignment note, reports Newark's Journal of Commerce.

Rail services between China and Europe are growing in popularity as shippers of high-tech goods and auto parts look for alternatives to costly air freight and slow ocean shipping. From a pricing perspective, rail is a 10th the cost of air freight and 30 days faster than ocean shipping.

Late in November a new service was launched between Yiwu near Ningbo, and Madrid, the latest route to be opened as part of China's "New Silk Way" initiative launched by Beijing and Kazakhstan that seeks to expand overland trade links with Central Asian economies and those of Europe.

China has invested US$40 billion in rail and logistics infrastructure to spur development of the rail projects and reduce dependence on air and ocean transport.

A key part of the Russian Railways agreement dealt with the transportation of temperature-sensitive goods through China, Russia and Central Asia in winter. Because of the cold, a situation also faced in Kazakhstan, containers will be reefers.

DHL Global Forwarding Asia Pacific CEO Kelvin Leung said rigorous tests had been performed before the service was announced.

"During the winter season when average temperatures can dip to minus 20C (-4F) and more along the rail route, customers can pre-define the temperatures for their shipments in the exact range of -25C (-13F) to 25C (77F)," he said.

The Russian Railways Logistics statement also highlighted the demand from multinational high-tech manufacturers that it said were "highly interested" in the service as it would offer reduced transits, improving competitiveness and inventory management.

So far this year, rail services have been opened between several Chinese manufacturing hubs and European cities such as Hamburg, Duisburg, Rotterdam, Lotz and now Madrid and Chengdu.

An uninterrupted rail link has been created between Kazakhstan and Liangyungang on the coast near Shanghai that the Central Asian nation uses as its de facto seaport.

The two companies also agreed to cooperate in the transport and logistics market of Russia and the Republic of Belarus. The rail company launched a container train service between China and Poland and has made the development of cargo train services through Russia a key goal.

It is already developing its China connections, working with several companies in the central Chinese city of Chongqing, as well as with DB Schenker with its own rail services linking Asia and Europe.

Source: Shipping Gazette