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Germany

Slow Train To China: European Freight Traffic To Far East Rising As Economy Skids

German automakers already use trains to roll their products to market thousands of miles away in China. Europe’s economic storm clouds are compelling other German producers to follow suit. The German National Railways is making plans for a surge in train

Train tracks in nothern Germany
Train tracks in nothern Germany

*NEWSBITES

BERLIN -- In the logistics sector, the use of air freight is considered an early indicator of how well the economy is doing. When a growth phase is coming to an end, and the need to save money becomes a priority, many users switch from air freight to cheaper transportation alternatives.

At a time like this, even long-haul alternatives to air freight are sought, says Karl-Friedrich Rausch, the board member in charge of transport and logistics at Deutsche Bahn (DB), the German National Railways.

Rail freight to and from China is a good example. According to Rausch, German car manufacturers regularly use rail freight to ship between Leipzig and the People's Republic. Some test runs with trains carrying electronics components are on track out of Duisburg. And come Spring, trains between Germany and the Far East will be regularly scheduled.

The DB logistics unit, with a turnover of nearly 19 billion euros, accounts for over one half of the National Railways' total earnings. According to DB's own information, the company is number one (measured by volume) in European land traffic, world number two for air freight, and three in seaport freighting.

Parallel to increasing freight train runs to Asia, DB will be raising prices for rail freight on average from 5% to 8% -- a significant rise in the transportation sector -- due to higher costs, said Rausch.

A fundamental problem in rail freight, the logistics chief added, is increasingly lower margins as fixed costs rise. "You're seeing higher salaries and energy prices, higher track access prices, not to mention higher cost for maintenance of the railcars," said Rausch.

Read the full story in German by Nikolaus Doll

Photo – liebeslakritze

*Newsbites are digest items, not direct translations

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