The silk railroad of China-Europe trade

silk road

Multinationals operating in China have been setting up factories deep in the interior in search of affordable labor. These plants can be more than a thousand kilometers (621 miles) from the coast. For companies exporting to Europe—still one of the largest markets for Chinese goods—shipping by air from Chongqing or other inland cities is too expensive. Trucking or carrying goods by train to the ports of Shanghai or Shenzhen’s Yantian and then shipping them to Western Europe can take 40 days.

There’s an alternative; an “international freight-train network” linking China to Europe. It starts in Chongqing and traverses Kazakhstan, Russia, Belarus, and Poland before reaching Duisburg, Germany. A separate line from China’s northeast links up with the Trans-Siberian Railway, which runs 9,288 km from Vladivostok to Moscow.

Shipping one container by train costs about $10,000, one-third the price of air transit. Although the train is about twice the cost of shipping by sea, it takes only 21 days for products from a factory in Chongqing to reach Western Europe by rail. The carbon footprint of rail, meanwhile, is about one-thirtieth that of airfreight.

The Chinese are enthusiastic about the rail connections to Europe. The government is considering financing track construction in its Central Asian neighbors of Uzbekistan and Kyrgyzstan. Premier Wen Jiabao has referred to the China-Europe rail link as part of a new Silk Road, the land route that connected western China to the eastern Mediterranean for more than a millennium.


About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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