March 28 (Bloomberg) -- China and Germany plan to boost a railway route between their countries as President Xi Jinping prepares to welcome a cargo train packed with laptops and electronics in Duisburg, the world’s biggest inland port.
The 700-meter Yuxinou train takes 16 days to travel more than 6,800 miles (11,000 kilometers) from China via Kazakhstan, Russia, Belarus and Poland. Xi will meet the train tomorrow in a visit to Germany. It’s one of up to three weekly services leaving the industrial hub of Chongqing, where companies such as Hewlett-Packard Co., Acer Inc. and Apple Inc. supplier Foxconn Technology Co. have production sites.
“The Chongqing-Duisburg route has great potential and a daily service is definitely a goal, also from the Chinese side,” said Julian Boecker, a port spokesman, by phone. “We started off with one train per week from Duisburg two years ago, and now we have up to three weekly services, which underlines that it is not an ephemera.”
As China promotes industrial hubs in central cities such as Chongqing and Chengdu that are further away from the coast, freight trains to Europe are gaining importance because it would take several days to reach the nearest ports.
“The train is twice as fast as seaborne transport, but only half as expensive as airfreight,” said Boecker. The overland route is particularly interesting for the electronics and automotive industries because the value lost on goods such as engines and computer components during the longer sea journey is relatively high, according to Deutsche Bahn AG.
China is Germany’s third-biggest trade partner. The countries imported and exported goods and services valued at 140 billion euros ($192 billion) last year, according to the Federal Statistics Office. Deutsche Bahn also started a route in August from the Chinese industrial hub of Zhengzhou to Hamburg, Europe’s third-biggest port.
The Yuxinou train is operated by Trans Eurasia Logistics GmbH, a joint venture between Deutsche Bahn and Russian Railways. It carries as many as 50 40-foot-long containers, Boecker said.
“The trains from Chongqing to Duisburg are better utilized than the other way,” said Boecker. The visit of China’s president may help to promote the service among German companies, he said.
“For companies such as car producers that want to ship ‘made-in-Germany’ quality parts to their assembly plants in China, the rail route is a good alternative to seaborne transport,” Boecker said. Volkswagen AG inaugurated a logistics center of more than three times the size of a soccer field in Duisburg on March 20, according to a port statement.
While goods insensitive to temperature such as clothes and building materials can be transported all year long, electronic products may face travel restrictions in very hot or cold periods, said Boecker.
Deutsche Post AG’s logistics unit DHL began offering temperature-controlled containers on its China-Europe rail service between Chengdu and its logistic hubs in the Polish cities of Lodz and Malaszewicze in January, according to spokeswoman Juliane Ranft.
Trans Eurasia Logistics is working on a similar service to be able to transport temperature sensitive goods, including medicine, on the China-Europe route, according to the company.
Duisburg increased container volumes 16 percent to more than 3 million standard 20-foot containers last year, including shipments by rail, ships and trucks.
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