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            october 15, 2019

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Intermodal sea-rail services on the rise in Europe, not so in Asia


Shippers using sea-rail intermodal connected ports in most major markets are benefiting from faster transit times and a reduction in overall cost, especially holding and inventory cost, according to Shipping Gazette.
Contship's La Spezia Container Terminal (LSCT) has come up with a niche service for the landlocked Swiss market and boosted volumes on its flagship LSCT to Basel route from almost nothing in 2013 to an expected full-year number of almost 12,000 TEU this year and increased the number of block trains from just one a week to three this year and five trains weekly from next year.
LSCT has boosted its volumes through this strategy and earlier this year passed the 1 million TEU mark for the first time, Colchester's Seatrade Maritime News reported.
Its sights are set squarely on Asian volumes, especially time-sensitive, high value cargoes. Contship Italia marketing and corporate communications director Daniele Testi said that with an average five-day saving in transit times from Asia to Basel, high season and high value products are a good combination for LSCT.
Mr Testi said that statistics from May 1 show that over 42 per cent of LSCT's total volumes are from the Far East and Southeast Asia. In terms of imports 74 per cent of volumes come from Asia and about 30 per cent of total import volumes go on to Contship's intermodal network.
While there is potential to push the envelope on established rail logistics networks in Europe, the dynamic in Asia is very different. Major port operating groups such as PSA International see the medium's potential and have recently tied up intermodal rail transport deals in India and China.
PSA's Bharat Mumbai Container Terminals (BMCT) and Container Corporation of India (Concor) recently sealed a deal to launch dedicated shuttle trains running between BMCT and Concor's Rail Transshipment Hubs (RTH) at Kathuwas and Jakhwada to consolidate rail-borne containers between BMCT and North and West India which will better utilise the rail network while offering better service to the lines.
PSA International last year also took steps to get into the China intermodal market, taking a 15 per cent stake in China United International Rail Containers (CUIRC), the only global terminal operator with a shareholding in the company which has been mandated to develop and operate 18 railway container terminals in China.
The investment in CUIRC, which currently has 10 terminals in operation, is PSA's first foray into the China container rail sector and complements and extends its network beyond its 11 coastal container terminals in Dalian, Fuzhou, Guangzhou, Tianjin, Dongguan, Lianyungang and Guangxi Beibuwan (Qinzhou).
"The CUIRC project is a game changer for PSA and fits into our overall strategy for China. With our current presence in major China gateway ports, PSA is well-positioned to develop synergies with CUIRC to grow integrated sea-rail intermodal operations across the world's second largest economy," said PSA International group CEO Tan Chong Meng.
The potential however is currently overshadowed by the fact that the railway container sector in these two Asian giants is relatively undeveloped. Just 12 per cent of Jawaharlal Nehru Port's volumes go on to rail trains and China is even more undeveloped, with rail currently only carrying about 2 per cent to 3 per cent of the country's seaport container volumes.
This compares unfavourably with other markets such as Europe and the US where the rail sector takes up 15 per cent to 40 per cent of container volumes.
The challenges vary between the different markets. Multiple competing options in Europe must be balanced against price and speed set amidst the backdrop of a wider Trans-European transportation policy.
Meanwhile, China's railway container sector potential has remained just that, despite the promise of ongoing initiatives such as the Belt and Road Initiative and Western Region Development Programme and progressive railway reforms.

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