The development for Eurasian freight train needs promotion, and even in a more market-oriented way. Some cities are exploring their own way. Until now, there are two railway platform companies in cities such as Xi’an, Zhengzhou, Guangzhou, and Jinhua-Yiwu. Amongst them, the platform companies in Xi’an and Zhengzhou belong to the same superior management unit. Why should two platform companies be established under the same superior management unit or in the same city? What are the pros and cons of this model? New Silkroad Discovery did some market surveys from the perspective of freight forwarders and clients.
A freight forwarder in Shenzhen, who provides booking service on behalf of Xi’an’s Eurasian freight train, believes that whether there is competition between two platforms in one city mainly depends on whether there is overlap on operational lines. If there is overlap, there will be competition. One advantage of competition is that customers will have more choices.
“On the same route, which platform provides more operational schedules? Which one offers cheaper price If there is no uniform fee standard? Which one has the better service quality? Clients will have more choices in this situation and tend to select the one who provides lower price and/or better service .”
More routes and hubs, more choices for clients
The freight forwarder said that the current model of “dual platforms in one city” basically have a distinction between lines, and the timeliness of the line depends on their railway routes. “Another advantage of the dual platforms is that the routes are complementary, which can eventually radiate more hubs in Europe.”
Another one who is an old client of Xi’an’s Eurasia freight train explained that there is indeed competition between two platforms, but more aspects of the dual platforms are complementary on operational lines. The benefits are also obvious.
“Different platforms have different support to the market. Freight forwarders and clients can select platforms with greater support and more opportunities for cooperation. Currently, Xi’an ITL Group, one of the platform companies, has cheaper prices and more operational lines. However, cooperation with them also has a higher threshold.”
“Single-choice question” may be the problem
Are there any disadvantages to this model of “dual platforms in one city”? Does it cause any inconvenience to clients?
Shenzhen freight forwarder believes that there may be a problem of seizing operational lines at the beginning of the dual platforms. The Shanghai freight forwarders interviewed stated that, the main inconvenience caused by the dual platforms contributes to increase the company’s operating costs. There is usually an exclusive agreement between platforms and clients . It depends on how the superior authorities allocate resources scientifically and rationally to reduce resource waste, and move toward high-quality development.
A freight forwarder with business offices across China believes that the main consideration of superior authorities is to create healthy competition for cities with dual platforms. “Healthy competition is good. Everyone competes on service and competitiveness which provides more choices to clients and market, and the benefits are obvious.”
“However, there are still quantitative assessments. The government originally envisaged healthy competition. Now it seems that things went athwart what was initially expected. Clients were forced to tick ‘single-choice questions’.” He added, “It is necessary to create healthy competition for providing ‘multi-choice questions’ and high-quality services to clients. the nature of railways being faster than shipping requires final approval from clients.”
Aiming for healthy competition and marketization
A manager of one platform company believes that the positive significance of “dual platforms in one city” lies in the realization of “task decomposition, pressure splitting”. The two platforms work together under the guidance of unified goals to jointly construct the assembly hub and promote high-quality development.
A manager of another platform company said that there will be competition under the “dual platforms in one city” model, but it is not so obvious. “Currently, the dual platforms are mainly set up for encouraging competition and to enable the Eurasian freight train to achieve marketization as soon as possible.” How to evaluate the performance of the platform? “If it is not quantitative, it can be relatively pragmatic. Such model can help the government to build a good platform and provide good service to the market, and utilize the hub function of the China-Europe and China-Central Asia freight train to stimulate trade through the train, and finally feed back to the industry.”
He believes that “dual platforms in one city” model is not necessarily designed and planned in advance, but should be slowly developed by nature. “There is something unspeakable. All I can say is, this is a better trial model at present.”
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Reporter: Qiaonan Zhang / Gong-Wei Lou