Northern Italy and China will be linked by another cargo rail service from September. Faster than maritime shipping and cheaper than air freight, the service is set to be a boon for the fashion, food, automobile and hi-tech industries. EURACTIV’s partner Milano Finanza reports.
The new rail link is designed to provide an alternative to maritime and air services. Operated by Chinese company Changjiu Logistics, it will connect the northern Italian town of Mortara with the capital of Sichuan province, Chengdu.
The initial plan is to run one service a week in both directions and double the frequency in 2018, if the market conditions justify it.
German rail company DB Cargo will run the service in Europe, which will be largely dedicated to transporting cars at first. But Changjiu Logistics eventually hopes to branch out into other sectors like fashion, furniture, electronics and food.
For Mortara, a small town near the city of Pavia, this is a huge opportunity. Its logistics hub currently shifts around 50,000 intermodal units a year thanks to freight between Italy and northern Europe.
China’s Belt and Road Initiative is a massive development strategy focused on connectivity and cooperation. Although the EU and China did not see completely eye to eye at a recent summit, Beijing is keen to increase trade and this train service fits nicely into its plans.
It is not the first rail link to connect Italy with the business of East Asia. The Far East Land Bridge (FELB), operated by Russian company RZD, has already linked Milan to China via Germany this year.
FELB Italy manager Nicola Cavasin explained that “many Italian companies now ask their shipping partners to send freight by rail between Europe and Asia as an alternative. The train is faster than a ship and cheaper than a plane.”
Currently, textile products (and the fashion sector in general), cars and electronics (imported from China) are the biggest users of the rail link. Furniture and food produced in Italy are the main products to be sent back the other way.
Germany was the first to take the leap and experiment with a rail link to China. Last year, DB Schenker shifted more than 40,000 containers along the route and hopes to hit 100,000 by the end of the decade.
Over the years, terminal-to-terminal transport times fell to just 14 days in 2014 from 26 days in 2010. Plans are in motion to cut this further to just 10 days.
The improvements have already made the train competitive against the ship, which takes around 20 days to make the same journey. Further reductions will only increase its attractiveness as a transport option.
DHL Global Forwarding Italia’s Mario Zini lauded the rail option as a “secure system and an excellent compromise between time and cost”.
DHL, one of the first to exploit the rail link, moved 50,000 containers between the two continents last year, which was a 119 percent increase on the previous year.
Zini added that rail freight costs compared with air freight can be up to 50 percent lower. He estimated that shipping a laptop from central China to the Netherlands would cost DHL $1.90 by boat, $3.80 by rail and $18 by plane.