While consumer demand is hampering growth of the rail freight volumes between China and Europe, there is one product that is considered to take advantage of the current market conditions. LCL shipments – less than container load shipments – is currently the number one choice of customers on the New Silk Road to Europe, says Chinese forwarder TIEDADA.

On 19 January, it signed a strategic cooperation agreement with Duisport Agency. It is not limited to, but has a strong focus on LCL shipments from China to Duisburg. “The two parties are the core agents of each other, and jointly serve the two-way railway business from China to Duisburg”, TIEDADA noted.

Solid partnership

While full container load shipments are the main product on the corridor to Russia, the picture of the China-Europe Express is slightly different. “We all agree the LCL has more potential in the next three years, when the economy is stagnating and orders are becoming smaller. We want to contribute more to the product, by using the advantage of both parties”, explained Frank Shao, owner of the Chinese firm.

The LCL product was always the “advantage product” of TIEDADA, so it has the experience. Duisport Agency is looking to offer more complete products to their key customers, and LCL is one of these solutions, the logistics professional explains.

The LCL advantage

“Compared with the rate structure of LCL shipments by ocean, LCL shipments by rail have a more simple rate structure which is more like air freight”, explains Shao. “TIEDADA actually designed the rate structure in 2015 when we first started the product. The rate structure is simple and transparent.”

In addition to this, 2023 has the potential to be the year when transit times on rail are something to brag about. “Due to the low price of ocean shipping, low-value cargo is moving back to the ocean, which leaves more space and less congestion on the railway. The stability of the transit time would bring some valuable and quality clients back to rail. Compared with air freight, the cost savings of rail freight are obvious.”.

Duisburg main distribution hub

The cooperation with Duisburg is however not only based on the LCL product. It is a yearly cooperation, where the partners aim to give “full play to their respective advantages to jointly develop the international railway logistics business and improve customer service. This cooperation is a good voice in the current sluggish railway market environment”, TIEDADA says.

Duisburg is still the main hub when it comes to rail freight that is distributed in western Europe, the Chinese forwarder believes. Apart from LCL, it wants to work out a distribution center for specific cargo which needs the network of Duisport, especially for electronic cars from China, Shao concludes.