The first China-Europe freight train from Shanghai launched last month. So far, 4 trains have launched from Shanghai to Hamburg, and 1 train from Hamburg to Shanghai. In the future, the westbound and eastbound trains between Shanghai and Hamburg will gradually complete the goal of 500 trips per year.

Wang Jinqiu, the chairman of Board of Shanghai Dongfang Silk Road Intermodal Transport Co., Ltd., the platform company responsible for the “Shanghai Express” operation, said that the new connection between Shanghai and Hamburg has attracted a large number of local and foreign trade companies.

The China-Europe freight train has been in operation for 10 years. Why does the first Shanghai train launch at this time?

Shanghai has the world’s largest container port, Shanghai Port, and the largest domestic cargo port, Pudong Airport, with developed sea and air transportation. According to the Shanghai Municipal Commission of Commerce, in the past, foreign trade companies and freight forwarders often ignored the important supplement of cross-border railway transportation.

Freight train departed from Shanghai, not a temporary solution

Extreme market conditions have led to skyrocketing prices of air and ocean freight. A large number of goods floods in railway transportation. But the market will eventually return to normal. When the ocean freight rate drops and the China-Europe freight train loses its price advantage, will cargo owners and freight forwarders turn back to ocean shipping?

The question that needs to be answered is, what exactly should be transported by the railways?

Industry insiders pointed out that China-Europe freight train should focus on high value-added products, such as precision instruments and chips. These goods have certain requirements for timeliness and are relatively insensitive to prices.

In the westbound transportation, manufacturing companies such as Mecerdes-Benz, Audi, BMW, Tesla and SAIC have become new exporters. Some companies have proposed their needs to export EV by rail.

“We need to find our own target customers. Our positioning is market-oriented. There are many customers in the manufacturing industry in Shanghai and its surrounding areas, which are suitable for the Shanghai freight train.” Wang Jinqiu said that a group of customers have negotiated with his platform company to sign a long-term contract. Obviously, for these companies, the China-Europe Railway Express is by no means a temporary alternative.

According to Wang Jinqiu’s analysis, this is because the China-Europe freight train has been in operation for 10 years, and the gradual elimination of subsidy dividends is the general trend. On the other hand, Shanghai Port has a large export and import volume. “For this reason, the Shanghai train will not only compete for price, but for quality and service; Shanghai will also carefully select customers and establish a deep binding relationship.”