Last July, logistics giant DB Schenker pioneered a new westbound combination of rail-road-air shipping, starting in China and ending in Brazil. Nearly five months later this innovative product seems to have prevailed in the market.
This has happened really fast: What commenced as an experiment has meanwhile entered the status of established program. Astonishingly enough, it took DB Schenker less than a half year to gain the
support of shippers for utilizing the capacity offered on the new transcontinental rail-road-air link from Chongqing in Central China to Viracopos near Sao Paulo. “Actually, we are speaking of a
truck-rail-truck-air-truck solution for getting China produced electronic components to the final consignees located somewhere in Brazil,” specifies Daniel Wieland, DB Schenker’s Senior VP Rail
Logistics and Forwarding.
From July until now, ten transports have been accomplished. “We are not speaking of entire cargo trains but single 40 foot containers that we forward from Chongqing to Viracopos, meanwhile very consistently,” states Herr Wieland.
Which client it was that approached DB Schenker months ago to give these runs a try he does not reveal. He says however that it’s a global producer of electronic equipment that has a major plant in or near Chongqing and who distributes his goods worldwide.
24 to 27 days
So what are the first results of this new trade lane spanning from the Far East to the eastern part of Latin America? “Positive in all aspects,” states manager Wieland. “The door-door lead-time is 24 to 27 days, including feeding and de-feeding and customs clearance.” Time-wise it clearly beats ocean freight that needs 55 days on average and in terms of costs it’s much more attractive than pure air freight from China to Brazil.”
The shipments are picked up at the consignee’s production plant by truck, brought to the Chongqing railway station, where they have to stay for 24 hours due to Chinese customs requirements. After having been cleared they start their train journey across the vast Eurasian land bridge that ends at Duisburg station in Germany. Trucks again come into the picture for bringing the shipments from Duisburg’s freight terminal to Frankfurt Rhine-Main airport. There, the interior of the large steel boxes are deconsolidated and bundled to new shipments before the consignments are loaded on board one of LAN Cargo’s freighter aircraft and flown across the South Atlantic to Viracopos Airport in Brazil. After having been cleared by the local customs officials it’s again trucks that transport the items to the final Brazilian consignees.
What has started with one major customer might be put on a broader basis soon. “Lately, we got a lot of inquiries of potential customers concerning these multi-modal transports,” confirms DB Schenker’s Daniel Wieland. With some of them “we have entered the stage of advanced negotiations.” If successfully completed with more shippers utilizing the chain linking China with the Atlantic side of South America rail transports starting in Shanghai, Zhengzhou or other production centers in Far East might complement the transports, Wieland reasons. This then would be a further step, reaching the next level of this particular and somewhat unusual intercontinental trade lane that seems to increasingly interest market participants.
Hellmann is next to jump on the bandwagon
And also some multinational logistics players like Hellmann for instance. According to their Head of Project Management, Matthias Magnor, his company is driving a multi-modal rail-truck-air project forward routing China produced and rail transported goods via Hamburg to Frankfurt and from there to Brazil, similar to DB Schenker’s approach. “This plan we intend to put into practice in 2015,” Matthias announces.