The China-Laos Railway, a landmark project of high-quality Belt and Road cooperation, has boosted regional connectivity and economic cooperation since it started operation three months ago.
As of Thursday, the railway has handled more than 350 international freight trains which transported over 250,000 tonnes of cargo, according to the China Railway Kunming Group Co., Ltd.
Driven by the increasing demand for transportation, the types of goods have expanded from fertilizers, fodder and vegetables at the beginning to electronic products, monocrystalline silicon, daily necessities and communication equipment, said Xu Chao, deputy general manager of the Kunming branch of China United International Rail Containers Co., Ltd.
In order to better serve train operation and improve efficiency, local authorities have coordinated efforts between epidemic control and transportation service, and facilitated the customs clearance at ports.
“Our train service has become more diversified, from traditional international cargo trains to Lancang-Mekong Express and cold chain trains,” Xu said, adding that the Lancang-Mekong Express only takes 26 hours from Kunming, capital of southwest China’s Yunnan Province, to the Laotian capital Vientiane.
Opening to traffic on Dec. 3, 2021, the China-Laos Railway runs over 1,000 km and links Kunming with Vientiane. It is the first overseas railway jointly constructed and operated by the two countries.
International trade companies are among those who benefit from the railway. Laos is embracing modern logistics services including road-rail combined transport and one-stop customs clearance, which improves the timeliness of cargo transportation and largely reduces costs, said Wang Lijun, chairman of Haofeng International Transport Co., Ltd, a Chinese joint venture rooted in Laos for over a decade.
Wang said the development of his company has entered into the fast lane, with business growing rapidly.
“The China-Laos Railway saves us about 30 percent of logistics cost from Kunming to Vientiane. The rail transport is more punctual and can reduce damages to the goods,” said Yang Jie from Shanghai Rencheng Supply Chain Management Co., Ltd. “We are more confident to expand Southeast Asian market.”
“The launch of the railway has not only promoted economic development along the route but also accelerated the construction of the China-Laos Economic Corridor and the community of a shared future between the two sides,” said Ma Yong, head of the institute of Southeast Asian studies under the Yunnan Academy of Social Sciences.
As the Regional Comprehensive Economic Partnership (RCEP) agreement entered into force in January, the destinations of international freight via China-Laos Railway have been expanded to more countries and regions including Thailand, Malaysia and Cambodia.
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The sale of DB Schenker, Deutsche Bahn’s logistics arm, might have found its suitor. Danish shipping giant DSV signed an agreement with two investment banks to gather enough funds to conclude the purchase. On the other hand, DHL officially withdrew from the race.
DSV is cooperating with French BNP Paribas and the British-Chinese credit institution HSBC to draft an acquisition offer, as various Danish media outlets mentioned. If DSV would end up taking over DB Schenker, it would become the world’s largest forwarder. One of the other possible buyers was DHL, which decided to continue with its strategy of bolt-on acquisition, which entails the purchase of smaller companies.
The sale process
Deutsche Bahn officially put DB Schenker up for sale in December 2023, after consulting with financial institutions throughout the past year. Their ears were open to offers between 19 December and 12 January. Dozens of parties showed their interest in taking over DB Schenker, which remains the most profitable asset of the DB Group. It now seems to be a clear frontrunner, DSV, but it is not yet quite clear how long the process will be.
German rail freight operator Kombiverkehr is launching a new service between Rotterdam and Cologne-Eifeltor. The service will run three times a week and is available for nearly all types of goods, except dangerous goods of class 7.
The new route will launch on 12 March and allows for intermodal transport with P400 loading units. It will run on Tuesdays, Thursdays and Saturdays in both directions. Trains will depart from the Rail Service Center in Rotterdam Waalhaven and take twelve hours to reach their destination at Cologne-Eifeltor. According to the company, all types of goods can be carried on the route, with the exception of class 7 dangerous goods.
Kombiverkehr stresses the interconnectivity of the route to other destinations. “This new train product shows how we are capitalising on our network advantage. Köln-Eifeltor is one of our biggest hub terminals in Germany, with many options for onward transport both nationally and internationally,” says the company’s Benelux Sales Manager.
The Cologne-Eifeltor hub is one of Kombiverkehr’s biggest, and offers options for further transport to other destinations in Germany and internationally. In Germany, freight can continue its journey to Munich, Ulm, Kornwestheim and Basel in Switzerland. Beyond Germany, the rail operator offers connections to Slovenia, Italy, Spain, Turkey and Greece. In Rotterdam, the company offers optional transfers to nearby parts of the port.
China looks set to ramp up its investment in logistics infrastructure, following premier Li Qiang announcing what analysts called an “ambitious” economic growth target.
Among the investments announced this week were plans by Dalian to pump more than $33bn into its north-eastern transport network, including growing its port infrastructure and constructing a number of new rail bridges.
The ministry of transport noted that funds had been earmarked for a total of 187 projects, with Dalian “striving” for a 12% year-on-year increase in container volumes.
It added: “[Dalian] will actively open ocean routes in the Americas, Middle East, India and Pakistan, adding five new container routes through the year, and unblock large sea and land channels to create new China-Europe routes.
“[It will] realise a 3% increase in sea-rail intermodal transport volumes and improve the port collection and capacity of the North Grain South transportation channel.”
While the largest investment announced so far since the start of Chinese New Year, the news from Dalian reflects a wider push towards growing the country’s supply chain connectivity, with Shanghai’s regional government focused on increasing Yangtze River Delta flows.
This will include starting construction of a new container terminal, called Xiaoyangshan, at the city’s port, announced in 2022 at an expected cost of $7.3bn.
Furthermore, the ministry noted: “Shanghai will continue to promote the construction of the Shanghai section of the second phase of the Shanghai-China Railway and the Shanghai section of the Shanghai-Chongqing-Chengdu high-speed railway.”
Other regional rail projects include the construction of lines and launch of new services to provide better connectivity with Pudong International Airport.
In total, the country has set aside $173bn for transport projects over the coming 12 months, representing an increase of some $3.5bn on 2023’s budget, as China looks to rebound from a range of economic challenges, including deteriorating foreign direct investor confidence.
That – despite FDI accounting for 3% of total Chinese investment – seems to have been playing on the minds of the country’s leadership for months. At a Beijing supply chain conference in November, Mr Li urged the international community to rebuff what he described as a movement towards protectionism and uncontrolled globalisation – taken as a thinly veiled comment against the rise of India and Mexico.
Although forecasting 5% GDP for 2024 to some 3,000 delegates gathered in the Great of Hall of the People in Beijing, Mr Li nonetheless acknowledged it would not come easily.
He said: “The foundation for the continuous recovery and improvement of our country’s economy is still not solid, with insufficient demand, overcapacity in some industries, weak societal expectations and many lingering risks.”
And in direct response to investor concerns, the Chinese cabinet office said “all market access restrictions on foreign investment in manufacturing will be abolished”.
