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Location: Home > Research > Research Progress
How to Operate the China-Europe Railway Express without Subsidies?
Update time: [November 14, 2018]
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Facilities connectivity is a priority area for implementing the Belt and Road Initiative (BRI). The "China-Europe Railway Express" (CER Express) scheduled high-speed freight train services between China and countries along the "Silk Road Economic Belt" (mostly in Europe) utilizes a "five fixed-point scheduling system" (fixed locations, fixed routes, fixed train numbers, fixed time, and fixed price) for shipping containers or fully-laden carriages along the whole route. Due to its fast speed, high level of safety, and short transport time, CER Express provides a novel channel for transporting commodities on the Eurasian continent and plays a key role in driving cross-border organization and agreements in BRI countries.  

In the past six years, the total number of CER Express services has increased rapidly from 17 trains in 2011 to 3673 in 2017. However, the eastbound service trains are much less than the westbound service trains, which results to a lot of container cases have to be sold out in Europe or be shipped back to China by maritime transport. Imbalanced CER Express transport as well as twice transshipments between China and European countries because of different rail gauges, result to a relatively high transport cost for CER Express services. As a result, CER Express services has to rely on subsidies from local governments to cover losses. 

Prof. WANG Jiaoe at the Institute of Geographic Sciences and Natural Resources Research (IGSNRR), Chinese Academy of Sciences and his team propose a reasonable organizational model for CER Express services, namely a hub-and-spoke system crossing the borders.  

The model combines a “central hub” and a “network of spokes” with a variety of modes of communication to ensure that “flow” costs are minimized. Based on the three transportation channels from China to European countries, Alashankou in the west, Erenhot in the center, and Manzhouli in the east are selected as the border ports, and Lanzhou, Zhengzhou, and Harbin are therefore identified as West, Central and East corridor hubs.  

The study finds adopting a hub-and-spoke network model for transportation, setting up collection and distribution hubs, creating a unified brand, and bringing about an organized system for supplying freight for return journeys to China will help create economies of scale and expand the scope and viability of CER Express services, thus decrease the transport cost of CER Express services and help it operate normally.  

In the end, the study emphasizes along with the development of west China and the movement of some enterprises from the coastal to the inland areas of China, the demand of CER Express services will surely have a large increase in the near future. Nevertheless, it is imperative the local governments clearly realize the objective fact that CER Express services will only ever serve to supplement ocean shipping and can never replace it.

The departure and destination cities of China-Europe Express trains (Image by WANG Jiaoe)

 

 Distribution of rail track gauges by size in BRI countries (Image by WANG Jiaoe)

Reference:

Wang, J., Jiao, J. & Ma, L. An organizational model and border port hinterlands for the China-Europe Railway Express. Journal of Geographical Sciences (2018) 28: 1275. https://doi.org/10.1007/s11442-018-1525-6.

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