DHL, Rail Cargo Group, expand China’s ‘Belt-Road’ plan with new Chengdu-Vienna route

In a deal spanning six countries and two continents, DHL Global Forwarding (DHL-GF), the airfreight forwarding arm of the Deutsche Post DHL Group, has signed a memorandum of understanding (MOU) with Austria’s Rail Cargo Group (RCG) to develop an intermodal rail network between Austria and China, extending China’s “One Belt, One Road” initiative to redevelop the ancient Silk Road route between Europe and Asia.

“Austria’s economic relations with China are growing steadily and, at the same time, Vienna is an important hub for trade flows to and from Eastern and Southern Europe,” said Christoph Wahl, managing director of DHL-GF in Austria.

The new route, covering 9,800 kilometers between Chengdu’s Qingbaijiang Railway Station and the Vienna South Freight Centre, has carried one direct test train so far in an April test of the railway connection. The new route runs through China, Kazakhstan, Russia, Ukraine, Slovakia and Austria in a relatively short 15 days; other trains currently plying the Belt-Road network often take 17 days to complete the journey.

Under the MOU, DHL-GF and RCG, the freight division of Austrian Federal Railways, will work together to boost railfreight capacity and jointly develop alternative routes to existing China-Europe connections. DHL-GF also said it would provide “door-to-door services” on the route, including last-mile trucking between Qingbaijiang and other parts of China; and between Vienna South Freight Centre and other European rail stations in its network, including customers’ final destinations for delivery.

China is pledging to do its part by investing 1 trillion yuan into an industrial cluster in the city of Chengdu, focusing on biomedicine, automotive equipment, intelligent manufacturing and e-commerce services by 2022.  Rail containers in the multimodal network come equipped with remotely monitored temperature controls, real-time tracking, fully-managed customs clearance and consolidation, and enhanced security.

“In order to further increase the efficiency in our network and thus ultimately for our customers, we are continuously working on expanding the railway connections,” said Felix Heger, head of China rail and oceanfreight Europe at DHL-GF.

Thomas Kargl, a board member at RCG, said, “the Chinese market holds enormous growth potential for Europe, and we intend for this route to support trade volumes that grew nearly 16 percent last year – and that shows no sign of slowing or decreasing in the future.”