Austrian logistics giant LTE is making use of the new Silk Road and plans to have 4,000 trains transporting goods between China and Europe in five years time.
Until recently, when a technology producer wants to move a new device from its factory of origin in Shenzhen to a car producer in Stuttgart, they had very few options.
“Traditionally giant container ships with 15,000-20,000 cargo units would be transported across the Suez Canal and then target the various European ports, usually Rotterdam, Hamburg, Antwerp” Andreas Mandl, General Manager of LTE, explained on a rainy day in April. The company has grown from a private regional transport company out of Graz in 2000 to a global player in rail logistics. As the manufacturing and transportation industry change at an ever-faster pace, Mandl is always looking for ways to save his customers time and money.
From the moment the products are loaded into a container at a factory somewhere in inland China to when they reach their final destination in Europe, they have been loaded from rail and truck to ship and back again, with the trip taking up to seven or eight weeks. When it comes to the release of new technology, as for example in the automotive industry, every day counts.
The Silk Road of the future
Today there are various routes across the so-called CIS countries, straight across Russia, though Kazakhstan and Ukraine, or via Georgia then with a ferry across the Black Sea to Constanta in Romania and on to Western Europe. All in all Mandl says these overland routes cut their delivery time in half. “Two to three weeks, door to door,” he says.
These routes have opened up new opportunities for both European and Asian industries. The Chinese government is very much in favor of this shift and sees the growth potential it brings, says Mandl. “The Chinese government gives financial support to any company that chooses land routes for their logistics concepts.”
Harmony on the rails
But change is never easy. Rail logistics and transport companies like LTE are at the mercy of the regional infrastructures in the countries in which they work. “Railways are roughly 200 years old; through the national partitioning of the countries, the system has developed differently across the continent and around the world,” says Mandl.
Some efforts are being made to reconcile issues like varying rail widths, different electrical systems in overhead wires and different signaling systems. LTE is at the forefront of these developments and is doing its part to modernize its equipment, making trains quieter and faster.
Protecting the environment is one of the main arguments in favor of rail transport. “To compare,” Mandl explains, “to transport a container 100 km, a ship needs 1 liter of fuel, a train needs 3 liters and a truck needs 30 liters.” Of course a ship has to travel much farther than a train, so “that’s how you have to imagine the energy consumption and CO2 emissions.”
Austria has long realized this and has launched various incentives for rail transport, likes subsidizing train cars to help containers travel the last mile by rail, even to rural and hard-to-reach areas.
There are also EU initiatives, like the Marco Polo program seeking to promote greener transport to fight pollution.