Overland gains traction on Asia-Europe trade

Date Added: 13 February 2019

International freight forwarding company Davies Turner & Co Ltd offers less-than-container-load (LCL) and full-container-load (FCL) overland services from Wuhan, China to Dartford, United Kingdom.

The service involves an 18-day rail transit from Wuhan to Duisburg, Germany. The container is then trucked from Duisburg to Rotterdam, Netherlands, where it is put on a ferry destined for Purfleet, United Kingdom. If the cargo is LCL, the container is then trucked from Purfleet to Davies Turner’s warehouse in Dartford, which is only a 15-minute drive. Davies Turner’s overland offering takes about 22 days in total, from departure at Wuhan rail terminal to arrival at its Dartford depot and provides greater security of goods. Traditional LCL rail services have required cargo to be unloaded and restowed in mainland Europe, but Davies Turner’s direct service eradicates this need with goods only being discharged upon arrival at its CFS warehouse in Dartford.
LCL departures destined for Dartford are offered from Wuhan each Friday (Monday cutoff), while FCL departures destined for the U.K. (or mainland Europe) are offered from Wuhan each Friday (Tuesday cutoff) and Wednesday (Sunday cutoff).

“Our aim is to increase our weekly LCL volume so that we are in a position to offer two departures per week and add a Wednesday departure,” Tony Cole, head of supply chain services at Davies Turner told BlueWater Reporting in January.

Davies Turner’s overland offering appears to be faster than any ocean liner service providing transits from Mainland China to the United Kingdom. Data from BlueWater Reporting’s Country to Country Transit Analysis by Service tool shows the quickest ocean liner transits are from Yantian to Felixstowe at 23 days port/port (plus an additional three to four days for discharge from vessel and unpack) on the OCEAN Alliance’s FAL5/LL1 service. However, of the 37 point-to-point origin and destination options from Mainland China to the United Kingdom offered by ocean liners, average transit time clocks in at 32.5 days port/port (plus an additional three to four days for discharge from vessel and unpack for LCL), according to BlueWater Reporting. This data does not include ocean liner services that involve transshipment.

In terms of rates, Cole said that Davies Turner’s LCL offering from Wuhan to Dartford is sold at a rate of $115 per cubic meter or 500 kilograms (whichever is the greater). This rate excludes a U.K. destination, terminal handling, customs clearance and door delivery charges. However, these rate levels are very similar to destination charges for ocean shipments, he said. In comparison, LCL freight shipped by sea from mainland China ports to U.K. ports usually costs about $40 per cubic meter or 1,000 kilograms (whichever is the greater).

“In light of the fact that many factories are located west of the main ports of China, further transit time, as well as cost savings are provided. Our origin partner in China (Air Sea Transport Inc.) offers a competitive tariff of origin collection charges,” Cole said.

Cole added, “Goods shipped using Davies Turner’s overland service from China to the U.K. (LCL and FCL) arrive ‘in bond’ in the U.K., and therefore, customs clearance is arranged upon arrival at the company’s warehouse in Dartford (LCL) or upon arrival at Purfleet’s ferry port (FCL).”

Comparing rail and air freight costs, Cole said, “the percentage savings via China rail versus air freight is very much dependent on the density of the cargo — the greater the density, the greater the financial savings via China rail. From our comparisons, the savings offered are up to 60 percent.”

Although rail freight transport from Asia to North Europe has been gaining traction over the years and the outlook for rail continues to look bright on the trade, trucking goods on this route also may become a more feasible option since in May China officially started Transports Internationaux Routiers (TIR) operations. The TIR Convention, which has more than 70 contracting countries around the globe, basically streamlines customs procedures. The International Road Transport Union’s (IRU) map, which may be found here, shows TIR acceptance around the globe.

TIR “enables goods to transit from a country of origin to a country of destination in sealed load compartments that are controlled by customs via a multilateral, mutually recognized system,” the IRU explained “TIR streamlines procedures at borders, reducing the administrative burden for customs authorities and for transport and logistics companies. It cuts border waiting times significantly, saving time and money.”

Extract from the American Shipper written by Hailey Desormeaux.
Read the full article here

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