Deutsche Bahn and the Georgian Railway company signed a strategic partnership agreement for strengthening the European and Asian multimodal transport corridors. Their upcoming cooperation is based on market studies forecasting fast rising rail transports across the New Silk Road linking the Far East with Europe.
At the signing ceremony, managers of both rail companies spoke of a “strategic alliance of mutual benefit.” Cooperating closely with Georgian Railway “will help us to further grow our business as
it puts us closer to the Asian market and opens up new perspectives for future endeavors,” emphasized Alexander Doll, Member of the Board of Management for Freight Transport and Logistics at
Deutsche Bahn on the occasion of the signing ceremony at DB’s Berlin headquarters.
CEO David Peradze of Georgian Railway emphasized that his company is very active in developing Europe-Asia rail corridors. “Therefore, it is logical that we partner up with Deutsche Bahn. Together with DB we are going to foster international freight transportation and offer competitive products,” stated the manager.
Work sharing model
According to the agreement, DB will be responsible for rail carriage of freight within the EU, while its logistics subsidiary DB Schenker’s role is to take care of multimodal transports. Conversely, Georgian Railway takes care of cargo transports destined to the Middle Est and India, as well as freight traffic to East Asia crossing the Caspian Sea by ferryboat.
Rail transports across the Eurasian land bridge first started in 2008. Ever since, a lot of stumbling blocks like different and time-consuming customs procedures at the borders were solved. This led to greater market acceptance evidenced by the sharp increase of cargo trains crossing the transcontinental land bridge either on the northern or southern route. Consequently, transporting goods via rail between Europa and China has become an increasingly rewarding business for a growing number of logistics firms. In 2016, 40,000 TEU were railed across the east-west corridor, both ways. By 2020, at least 200,000 standard containers are expected to be railed. Although prices are not revealed by the railroad companies, it is estimated that transporting one 20-foot standard steel box from China to Germany costs €4,000.
On average and depending on whether they take the northern (Siberia) or southern (Kazakhstan) route, trains need 14 to 16 days from start to finish. Mostly, garments and capital-intensive goods
such as automotive parts or electronic items are traveling on board the cargo trains. Although ocean freight is about 50 percent cheaper, railed goods can be marketed much faster in comparison,
sharply reducing the high capital lockup caused by lengthy sea transports.
Fast growing volumes
In view of the positive forecast and considering the steady growth of the Asian-European rail cargo market, the recently inked partnership between Deutsche Bahn and Georgian Railway to up container transports on the southern route of the News Silk Road seems to make much sense.
In a separate statement, the municipal government of Hamburg, Germany has expressed its determination to strengthen the city’s role as starting point and final destination of cargo trains running across the Eurasian land bridge. Currently, there are several scheduled train services connecting Hamburg, inter alia, with Zhengzhou, Hefei, and Wuhan.