Emergence of Rail Freight as Competitive Alternative for Trans Eurasian Transportation

Shippers majorly prefer ocean cargo for the inter-continental cargo trade between Asia and Europe. With the emergence of rail infrastructure in the central Asian region, rail transport mode offers better alternative to ocean and air mode for Trans Eurasian shipments. The whitepaper highlights the potential benefits with respect to cost and transit time reduction that shippers can achieve by shifting to rail mode. What?s in it for Shippers? Major shippers prefer ocean mode for transporting high value, heavy weight cargo while air mode is used for transporting high value, time sensitive cargo between China and Europe. Rail mode accounts for around 3% of the total cargo transported between Europe and China. The emergence of rail infrastructure in the Central Asia presents an opportunity for shippers to shift to a cost effective and sustainable mode of transport while the modal share of rail mode is expected to increase from 3% to 5% by 2016. Which product type is applicable? Major automobile and Hi-tech manufacturers such as HP, Fujitsu Siemens, BMW, Audi, and Volkswagen have initiated a shift from ocean and air mode to rail with emergence of rail freight services by 3PL providers like DHL and DB Schenker. Initially manufacturer had to engage with multiple rail service providers which would lead to delays due to customs clearance at transshipment points.3PL providers offer a direct end to end rail service by engaging in partnership with rail service providers in China, Russia, Poland and Germany.