Rail-Air Connection Can Bring Goods from China to Europe Quickly

In December 2014, the KTZ Express joint stock company implemented the Rail-Air project to transport goods from China to Europe quickly. In an interview with this newspaper, President of KTZ Express Sanzhar Yelubayev discussed the results of the project.

Rail-Air Connection Can Bring Goods from China to Europe Quickly

Do you think that this project is a landmark for multimodal companies, such as KTZ Express?

Certainly, Rail-Air is a unique decision on cargo transportation. This is the first multimodal transportation pilot project [to bring goods] from China by railway to Almaty airport and then by air to Europe. Jointly with our logistics partners, we implemented a successful transfer of electronic equipment from China to Europe, a distance of 9,900 kilometres, in just seven days!

Previously, air and road transport were used to implement such schemes. There are also ocean-air connections; for example, when goods are sent to Dubai by sea and then to Frankfurt by plane.

For the first time, we found a solution using a regular container route from Chongqing to Duisburg as a component. The pilot project is carried out in a single customs-transit regime, which was approved by the airport, the Customs Committee and our company. This is necessary in order to avoid customs clearance operations while taking the rail cars with cargo to the airport.

The operation started in Chongqing, where one special 45-foot container maintaining a certain temperature was connected to the train. At the Dostyk border station, the railcar was disconnected and sent to Almaty. There it was unloaded at the temporary storage warehouse and afterward sent by cargo flights to Amsterdam.

In terms of transit time, the potential of this pilot project is six days, which is a good indicator. For example, air delivery would have cost about $50,000; rail transportation takes 14 days and costs $10,000. Rail-Air costs about $30,000.

Of course, the cargo could reach the destination by air in one day. But it would have cost more. In our case, the difference between one day and six days was not so critical for the shipping company, when compared with 30 days if the goods were sent by the ocean-air scheme.

Rail-Air includes reorientation and a good alternative to air transportation in terms of reducing the price and introducing an important option for cargo that needs to quickly get to the market.

I believe this approach is the perfect solution for freighters who are interested in the prompt arrival of goods to the market. We are the first to work out such a scheme with the railway, customs, airport and airline. No doubt, it is quite troublesome in terms of documentation and technology development. The cargo is assembled in refrigerators in Chongqing. Our representative in Chongqing observes the process. At the Dostyk station we load the container, which is kept closed until it reaches the final consumer. This is one of the advantages of the scheme.

We managed to fully ensure the security and safety of cargo on the route. I think this trend has a great future.

You noted the profitability of the scheme for customers. Is there a loss of profit on railway transport turnover for KTZ Express?

In this case, goods are not diverted from rail transportation, but from air transportation. It is an alternative to air transportation. If we did not introduce this service, the cargo would pass straight by plane from Chongqing to Europe.

In winter, from October till summer, container trains from Chongqing to Duisburg do not run by rail. In the cold months, simple containers holding electronic equipment freeze while crossing the northern regions of Kazakhstan, Russia and some parts of Europe. Therefore, during this time, freighters traditionally switch to marine transport, or to air transport in urgent cases.

What measures have been taken by KTZ Express to transport goods that are temperature sensitive?

In order to accomplish cargo transportation year-round, we obtained a special type of rolling stock. These are specialised 45-foot refrigerated containers with climate control Unit-45 systems, which can operate in autonomous mode for up to 22 days. For any sub-zero temperatures in winter and above zero temperatures in summer, we can maintain the temperature essential to our customer.

Since our pilot project was carried out in winter, refrigerated containers with expensive electronics sensitive to temperature conditions were kept at about plus 5 degrees.

By the way, at the moment, new combined trains with both refrigerated and universal containers are being formed. Laptops can be stored in the refrigerated containers, while less sensitive printers can travel in the universal ones.

Are there negotiations underway on using this method commercially?

At the moment, the pilot project is being evaluated. Then negations will be held with our freighters [and] major manufacturers of sensitive electronic equipment. In January and February we will work through all the issues relating to the volume of project technology.

It should be added that a similar product is being worked out with the provinces of Zhengzhou, Wuhan and Chengdu. Let me note that the monthly volume of the Rail-Air scheme is not very large – from five to 30 containers. However, in marginal commission it exceeds the forwarding of cargo by railway transportation by several times.

I emphasise that the multimodal scheme is one of our demonstration products. Of course, there are other logistics solutions. But the effectiveness of Rail-Air can be demonstrated by our results.

 

KTZ Express, an international multimodal transport and logistics company, was created in June 2013 within Kazakhstan Temir Zholy. The company oversees the international Aktau trade seaport, the Khorgos-Eastern Gate Special Economic Zone and 11 airports across Kazakhstan. It integrates rail, sea, air and road transport, port and airport infrastructure and a network of terminals and logistics centres.

KTZ Express is directly involved in the development of container transport through Kazakhstan. By the end of 2014, the company had transported more than 2 million tonnes of cargo. As a whole, over the past year, the company’s gross income comprised 10.9 billion tenge (US$58.69 million); income of operational activities reached 1.1 billion tenge (US$5.9 million).