NewSilkroadDiscovery Dialogue(3) – Kopf & Lübben: rail service particularly affected and possibility of subsidy extension

After experiencing the lockdown of the pandemic and the blockage of the Suez Canal, who would have thought that the global supply chain would face the challenge of war in 2022? “At the beginning of the year, we were very confident that we would be able to benefit from the momentum of the last year, with space remaining tight and rates consistently high. However, with the current development in the Ukraine, we suspect that volumes will drop. Particularly affected will be the rail service, with customers concerned about the safety of their cargo.” A spokesman for Kopf & Lüben Cargo Services expressed his opinions to New Silkroad Discovery.

Kopf & Lübben Cargo Services was founded in 1976 in Bremen, Germany. With offices in Hamburg and in Frankfurt, they provide ocean and air freight forwarding, road freight and customs clearing services since years. Rail freight between China and Germany is one of their core competencies.

Besides the factor of war, from the perspective of long-term impact, they are also concerned about the Chinese government’s policy on the China-Europe freight train. “As per our information, 2022 will be the last year for rail carriers receiving direct funding from Chinese government, but we don’t think the changes of subsidy will change the trends of Eurasian rail transport. Possibly Chinese government will adopt other financial measures to continue its support to Eurasian rail transport, such as coordinating banks offering interest-free loans or provide bank guarantee service to rail carriers, etc.”

From the perspective of long-term development, the German forwarding and logisticis services provider would pay more attention to the routes linking Chengdu, Zhengzhou, Chongqing, Xi’an and Urumqi with Europe. “In 2020 China announced to invest in supporting these cities in becoming New Silk Road hubs. We take it as a clear message to the market which cities will have the priority in the future, especially after subsidy ended.”

“We hear and believe that the Chinese government subsidies will be decreased in order to phase them out entirely. We do not see this as a problem. Rail freight rates will rise as a consequence, but there will still be customers and situations that will require the rail service – both for economical as well as environmental point of views. As a complement to the global supply chain, the development of Eurasian rail transport is closely related to maritime transport. In the past two years, ocean market keeps hot with tight space and high freight rate, rail operators have launched various of new services”, said the spokesman.

But in the shadow of war, some goods were shifted to the ocean shipping and Eurasian rail transport is facing huge market challenges. “We suspect that there could be an extension of rail subsidies in this year.”

According to Kopf & Lübben Cargo Services, they meet the needs of customers for individual and innovative solutions in the intercontinental transport of goods and in the seamless execution of logistics processes. Reliability and trust, together with their wide experience and know-how in this business, they delivery tailor-made, highly professional solutions to customers.