China-Europe Freight Trains with the Belt and Road Initiative

2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Key Laboratory for Big Data Application Technologies of Comprehensive Transportation, Beijing Jiaotong University, Ministry of Transport, PRC

)NOTG+[XUVKLXKOMNZZXGOTY]OZNZNK(KRZ PPTGTJ8UGJ/TOZOGZO\Kȍ+T\OYOUTULGTࠥߡЈૺ͹www.1ppt.com/moban/ /TZKXIUTTKIZKJ+[XGYOG

Chunjiao Dong Ph.D. Professor, School of Traffic and Transportation Beijing Jiaotong University 1/30/2018

Outlines

The Belt and Road Initiative China-Europe Freight Trains • Main Corridors and Routes • Main Characteristics • Pricing Rules and Costs • Freight Management • Development Plan (2016-2020) Sichuan International Freight Train Program • Current Developments • Future Challenges Conclusions

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

The Belt and Road Initiative

Chinese Export Trade Flows

• 4.4 billion people • 65 countries • Annual trade could climb to $2.5 trillion USD within a decade

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Outlines

Main Corridors

East Corridor +[XUVK 3GTIN[XOG 'RGYNGTQU[ 'RGZG]6GYY Central Corridor +XKTNUZ 1GYNMGX

1N[TPKXGH 2OGT_[TMGTM West Corridor 11[TSOTM 4GTTOTM .GTUO 8GTMUT

9OTMGVUXK

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Seven Railway Routes

Chongqing Germany YuXinOu 2011, 11200km Alataw Kazakhstan Russia Belarus Poland 14days

Hefei Germany HeXinOu 2014, 11000km 15days

Suzhou Manchuria Poland SuXinOu 2012, 11800km Russia Belarus 15days

Chengdu Alataw Kazakhstan Poland RongXinOu 2012, 9826km 15days

Wuhan Czech Republic HanXinOu 2012, 10800km 15days

Yiwu Alataw Kazakhstan Russia Belarus Poland Germany France Spain YiXinOu 2014, 13000km 21days

Zhengzhou Germany ZhengOu 2013, 10200km 15days

Comparison of Two Routes

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Chongqing—Germany (Duisburg)

• YuXinOu (䅁ޏࠬ): Chongqing-Xinjiang- Kazakhstan-Russia-Belarus-Poland- Germany, 32 railway lines • 3/19/2011, 11200 km • 14 days compared with 20 days by sea • 1 or 2 trains per day, 700 trains in 2017 from Chongqing • Over 5000 trains till Oct 2017 • Go through 28 cities in China and arrive 22 cities in 12 countries of Europe ¾0.7% of containers shipping by sea • 145794 TEU in 2016 ¾1.2 times of cargos shipping by air ¾is 32.8% of total international containers shipping by railway.

Yiwu—Spain (Madrid)

• YiXinOu (Уޏࠬ): Yiwu-Alataw- Kazakhstan-Russia-Belarus-Poland- Germany-France-Spain • 2014 • 13052km • 21 days • 94 trains till Oct 2016

• Five key factors • The longest route • Pass eight countries • Go through six provinces • Three times of track changing • The first county-level city

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Main Terminals in China

“12235(6)N” Characteristics

One agent :]UIUTZGOTKXYZXGTYLKXY -UKYZNXU[MNLO\KIU[TZOKY

:NKZNOXJVGXZ_UX)NOTG8GOR]G_ *OLLKXKTIKYOTZXGIQMG[MK )NOTG8[YYOG8KV[HROIUL(KRGX[Y6URGTJ-KXSGT_=KYZ /TZKXTGZOUTGR3[RZOSUJGR:XGTYVUXZ *UYZ_QYZGZOUTSSSS ROTK]OZN1G`GQNYZGT)KTZXGRROTK]OZN3UTMUROG )U2ZJ

2 3 N 5/ 1 2 6

:]UOTZKXTGZOUTGR 49NOVVOTM ZXGTYVUXZUXMGTO`GZOUTY ZNXKKI[YZUS`UTKY IUSVGTOKY OT\UR\KJ /TZKXTGZOUTGR;TOUTUL8GOR]G_Y;/)IU[TZOKY )NOTG+[XGYOGT)[YZUSY;TOUT+');GTJ+[XUVKGT ,XKOMNZSGTGMKSKTZ NKGJW[GXZKXYOT6GXOY!5XMGTO`GZOUTLUX)UUVKXGZOUTUL ;TOUT)[YZUSY;TOUT+;); 8GOR]G_Y599N*IU[TZOKYNKGJW[GXZKXYOT=GXYG]

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Main Characteristics

Accelerated growth

From inland to coast, from Germany to Spain ……

More and more goods categories

From independent to unified

Unbalanced headhaul and backhaul

Train volume statistics

Train Volume Ratio Year China- Europe- (China/ Total Europe China Europe%) 2011 17 17 0

2012 42 42 0

2013 80 80 0

2014 308 280 28 10

2015 815 550 265 48.2

2016 2191 1599 592 37.01

ՠઋ 3453 2568 885 34.47

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Competition between the Major Cities

300 250 Manchuria, 618, 39% Alataw, 818, 51% 200 150

m China to Europe Erenhot, 95, 6% 100 Khorgas, 68, 4% in 2016 50 Harbin, 30, 2% Shenyang, 68, 4% 0 Xinjiang, 49, 3% Dalian, 142, 9% Chongqing, Xian Yiwu Hefei Xining, 1, 0% 278, 17% Xining Dalian Tianjin Harbin Wuhan Suzhou Nanjing Number of Trains Trains fro of Number Xinjiang Yingkou

Chengdu Xian, 5, 0% Changsha Shenyang Yingkou, Chongqing Zhengzhou Guangzhou Tianjin, 3, 0% 180, 11% Chengdu, 289, 18% Manchuria Erenhot Khorgas Alataw Nanjing, 1, 0% Changsha, 57, 4% Hefei, 32, 2% Guangzhou, 16, Wuhan, 120, 8% 1% Yiwu, 72, 5% Zhengzhou, Suzhou, 119, 137, 9% 7%

Competition between the Major Cities

Erenhot, 5664, Manchuria, 3% 8198, 4%

x 10000 5 Khorgas, 70300, 32% Alataw, 131483, 4 61%

1 Chongqing, 88, Chengdu, 0, 0% Wuhan, 460, Shenyang, Number of TEU in 2016 0% 1% 2788, 6% 0 Harbin, Zhengzhou, 0, 1574, 3% 0% Xinjiang, 0, 0% Xian Yiwu Hefei Suzhou, 10532, Yiwu, 0, 0% Xining Dalian Tianjin Harbin Wuhan Suzhou

Nanjing 22% Xinjiang Yingkou Hefei, 0, 0%

Chengdu Dalian, 10969, Changsha Shenyang Chongqing Zhengzhou 23% Guangzhou Guangzhou, 1178, 2% Manchuria Erenhot Khorgas Alataw Changsha, 4722, 10% Nanjing, Yingkou, 14734, Tianjin, 194, 0% 82, 0% 31% Xian, 0, 0% Xining, 0, 0%

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Pricing Rules and Costs

Same as the sea cargo or a little bit higher

Certain subsidies

China-Europe (Poland, Germany)$0.50-0.6 per km for a 40 ft container in 1520 mm sections, $0.65-1 in Europe, $0.6 in China, average $0.65-0.7; Europe-China, average $0.55 China-Moscow through Alataw, $0.6-0.65 per km for non-domestic sections, China-Moscow through Manchuria, $0.45-0.55 per km for non-domestic sections

For non-domestic sections, through Alataw to Poland or Germany, estimated $3800-4300; through Manchuria would be lower

Freight Management

)NOTG+[XUVK,XKOMNZ:XGOT-UUJY

Western Europe Eastern Europe Russia Central&Western Asia Home appliances, Automobiles & parts, Computer, electronics accessories & Automobiles & parts, home Groceries, luggage & handbags, tires澝fabrics & cloths, viscose fiber, supplies, home appliances, appliances, fabrics & cloths, decorative material, building materials, groceries, luggage & handbags, Automobiles & parts, tires. groceries, luggage & handbags澝 steel, mechanical equipment, PVC, decorative material, building materials, Transfer mainly decorative material, building chemicals & raw materials, tea, steels, mechanical equipment, PVC, materials, furniture ketchup, coffee, furniture. chemicals and raw materials, tea, ketchup, coffee, furniture.

©ERINA 2018 Northeast Asia International Conference for Economic Development (NICE) in Niigata A-DONG

Freight Management

“YuXinOu” Six computer companies in Chongqing. According to the Local service 1 requirements of transport time, quality, safety, and reliability, organize direct train service to Germany. “YingManOu” Take advantage of low shipping fee of ocean transport and Russia 2 Intermodal transport rail, develop intermodal transport between Southeastern coast, Japan, and South Korea. Organize direct train from Dalian, Yingkou to Moscow, Slovakia, Belarus, and Poland. “LianXinYa” 3 Transit rail Take advantage of freight rate policy in transit shipment, organize the goods from Japan, South Korea, and Southeast Asia countries visa China to Central Asia and Europe. “ZhengOu” )UUVKXGZOUT Develop Central China logistics hub. Attract the goods from central 4 Logistics Hub )URRGHUXZGZOUT China and organize the direct train to Germany. Xinjiang Region cooperation Through region cooperation, organize freight train to Central Asia 5 or Europe.

Development Plan (2016-2020)

Developing goals

The development of basic transit corridors will be completed Plan map of corridors development

Basic hubs will be built

Goods gathering effects will start to show

Operate 5000 trains per year

Significate improvement of return train quality

Development Plan (2016-2020)

Attraction Zone of Goods

West Corridors: transit through Lianyungang-Lanzhou, Lanzhou-Alataw 'RGZG] .GXHOT +XKTNUZ ;RGTWGH (KOPOTM Central Corridors: transit through *GROGT 2GT`NU[ Guangzhou-Beijing, Ulanqab-Erenhot 2OGT_[TMGTM 9NGTMNGO

East Corridors: transit through Shanghai- -[GTM`NU[ Beijing, Dalian-Harbin

Development Plan (2016-2020)

Important Hubs & Terminals Inland major freight hubs, two direct trains per week, can attract returning trains, gather and manage freight

Major rail terminals, important station in transport network

Important harbor hubs, provide sea-rail intermodal transport, more than 3 direct trains per week

Entry port nodes, can provide custom services and cargo transfer

Outlines

Sichuan International Freight Train Program

The belt and road initiative promote new patterns and framework Europe +GYZKXTIUXXOJUX ,GIOTM+[XUVK Japan & South “Depart 13 and return Korea =KYZKXT8KMOUT=KYZK 8KM Yangtzee RRiver 10” per week in 2017 Deltata SoutheastSoutheast China-Europe Freight Train 1/2017-11/2017 coast 900 25% PearlPPeearl River 22% 800 DDelta Average loading rate will 700 19% 20% 643 SoutheastSSoouuthheeaasst 600 +GYZIUXXOJUX 539 15% AsiaAAssiaia reach 70% 500 12.60% 400 368 9.20% 10% ,GIOTM9U[ZNKGYZ 300 267 200 5% IUGYZ 0GVGT 100 0 0% 9U[ZN1UXKG Chengdu Chongqing Zhenghzou Wuhan First place (25% train Train number Ratio in China-Europe Trains volume in China) 9U[ZNIUXXOJUX ,GIOTMYU[ZNKGYZ 'YOG'9+'4

“RongOu+” Freight Trains

Develop interconnected freight trains and routes

ZXGOTYVKXJG_ ș 5\KX ZXGOTY Tianjin

ZXGOTVKXJG_ ș ZXGOTY Rizhao ShangHai HuRongOu ș ZXGOTY ZXGOTYVKX]KKQ Wuhan Ningbo YongRongOu 1275 “RongOu+ ” freight trains Shenzhen connected to the 6277 trains from Kunming Guilin Xiamen RongOu express trains in 1/2017- DongGuan 11/2017

Future Challenges

Encourage the migration of industries to 9ZXKTMZNKTK^OYZOTMSGT[LGIZ[XOTM Chengdu > )USV[ZKX > '[ZUSUHORK Drive advanced manufacturing gathering > around Chengdu 9NUKY /SVUXZGTZ > )RUZNOTM OT\KYZSKTZ Develop new trade modes *K\KRUVVUZKTZOGROTJ[YZXOKY

Provide easy & convenient services > 6NUTKYGTJIUSSJK\OIKY > 5VZOIGROTYZX[SKTZY Develop industries and business > :U_Y > 3KJOIGRKW[OVSKTZ

Future Challenges

Outlines

Conclusions

Better freight management • Develop information and resource sharing platform • Develop logistics hub in east, central, and west port corridors managing goods Establish better subsidies policies, increase competitiveness Better balance between quality and quantity Better cooperation mechanism • Simplify transfer procedures • Information exchange & paperless technology • Improving transport regulation, standards and laws Better organization and coordination at border stations

Thank you!! Questions and Comments!!!