All aboard the China-to-London freight train

Abroad Train Freight

On 3 January in Yiwu in eastern China, a bright orange locomotive pulling 44 containers laden with suitcases, clothes and an assortment of household goods set off on a 7,500-mile (12,000km) journey to western Europe.

Ten containers were taken off at the German cargo hub of Duisburg. The rest made up the first cargo train from China to arrive in London at Barking’s Eurohub freight terminal.

Market demand

The UK’s biggest supermarket, Tesco, doesn’t have any goods on this particular train but does use rail to carry toys, electrical goods, homeware and clothing from China to European rail hubs such as Bratislava in Slovakia and Krasnaje in Belarus.

Alistair Lindsay, Tesco’s head of global logistics, says the supermarket prefers shipping its goods because this is the most environmentally friendly way, as well as offering the best value for money, but that “where we need to move products quicker we have that option to do it by rail”.

This decision would normally be driven by customer demand for particular products, he says.

Trade route

For centuries the fabled trade route from the ancient capital of Xian provided a link to the bustling markets of European cities such as Istanbul and Venice.

In the 21st Century China has become the world’s biggest exporter, with the export of goods totalling $2.28 trillion (£1.85tn) in 2015.

This rail expansion is part of President Xi’s “One Belt, One Road” (OBOR) trade policy. For Beijing it offers another way to sustain its economic growth.

Kazakhstan is one of the countries on the route and it was there that Mr Xi first outlined his vision in a speech in 2013 saying, “This will be a great undertaking benefiting the people of all countries along the route.”

Extolling the virtues of globalisation was a theme he repeated again at Davos this week.

For some, this is as much political as economic, offering Beijing the chance to project soft power as well as demonstrating it has the influence to thread disparate nations from Russia to Spain together.

Growth potential

For UK companies facing up to the reality of Brexit, China is an attractive proposition and the train carries new opportunities.

Brand Avenue is a company that already exports British-made goods including cosmetics and jewellery to China, and chief executive Jody Jacobs says he’s exploring moving to rail.

“We deal a lot in goods which weigh a lot in comparison to their volume [which is] where airfreight becomes expensive, such as cosmetics and baby food.

“So for us a service which is quicker than sea and cheaper than air is a great middle ground.”

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