Urumqi to open new cargo routes to Central Asia, Europe

Goods from Urumqi of China's Xinjiang could soon enjoy lower logistics costs and shorter travel time to arrive in Azerbaijan, Georgia, Iran and Turkey, as the country plans new cargo routes that are expected to start this September as part of its larger Sino-Euro connectivity efforts.

The new cargo routes, a part of Sino-Euro Cargo Railway project and linking China with Caucasus and Middle East, are now piloting, according to He Jun, deputy general manager of Xinjiang Sino-Euro Logistics Co Ltd in charge of routes management of Sino-Euro Cargo Railway.

"The new routes will further boost trade between China and countries involved in the Belt and Road Initiatives, and beyond," said He, "and make Sino-Euro Cargo Railway project forerunner of China's opening-up."

He also noted that the company is now seeking clients that are willing to join a trial run. "Most of the clients we are currently looking for are in the home accessory sector, which we found is of great demand in countries in Caucasus and Middle East areas," said He.

He added that the new routes were proposed at a time when logistics networks fell short of meeting the growing demand of China's cross-border trade with these areas.

Currently, the Sino-Euro Cargo Railway project has 19 routes departing from Xinjiang Uygur autonomous region, China's inland transit hub facing an international market, and reaching 17 countries including five Central Asian countries such as Kazakhstan, and European countries such as Germany and Spain.

Initiated in March of 2014, the cargo trains have made a total of 1,739 trips up to this July. In 2017, total shipments achieved 809 times, up 261 percent from that of 2016. According to Liu Qi, a government official at the Economic and Information Commission of Xinjiang that regulates the trains' daily operations, this year the commission expects 1,400 single trips departing from Xinjiang.

"The Sino-Euro Cargo Railway project is becoming a vital artery to strengthen trade ties between China and countries involved in the Belt and Road Initiative, and beyond," He said.

He said that as the Sino-Euro Cargo Railway trains use standard shipping containers, it can save clients about 20 percent time, compared with the past when they used regular freight trains and had to wait for the train to be fully loaded from other clients before departure.

"A reduced shipping time can lead to a drop in cost," said Xiao Guodong, chairman at Ba Yi Steel Co Ltd, a Urumqi-based steel group operated under Baosteel Co Ltd.

Xiao said it takes about 30 days for their steel to be shipped to Moscow, but now the shipping time is 10 days and costs have been cut by 5 percent due to the shortened shipping period.

"We are confident to sell about 7 metric tons of steel in Russia this year and plan for over 20 tons next year," Xiao said.

Xiao also said the company is now eyeing more markets to develop, especially those involved in the Belt and Road Initiative, as those countries have preferential policies to encourage mutual trade, and the increasing routes linking China with those countries guarantee a less costly logistics.