Courier services delivering boost to rail sector

By Wu Yiyao in Shanghai (China Daily) Updated: 2014-08-01 07:09

The first special trains for e-commerce freight delivery services between Shanghai and Beijing will start running on Friday, marking the initial step of opening up rail services to commercial clients, China Railway Corp said Thursday.

CRC has reached an initial agreement with courier service providers and postal services authorities that the fast trains for e-commerce freight delivery may extend to the Yangtze River Delta, Pearl River Delta and Bohai Rim, according to the 21st Century Business Herald.

The report also said that SF Express, one of China's largest courier services, contracted the first fast freight delivery train between Beijing and Shanghai.

SF Express confirmed the information with China Daily on Thursday, saying that the company intends to take advantage of rail deliveries in the future.

Other e-commerce platforms and courier services also are in negotiations with CRC to contract trains for parcel delivery, according to CRC.

Market insiders said the launch of the services will benefit multiple parties involved in commercial shipping, as rail delivery is faster than road transportation and much cheaper than cargo shipping.

"Current air freight from Shanghai to Beijing may cost more than 0.8 yuan (13 cents) per kilometer, while train freight is under 0.4 yuan per kilometer. Intercity freight by train may be both cost-saving and time-saving," said Huang Zhijun, a freight agent in Shanghai.

According to Shi Jianjun, manager with Shanghai Yuntong Shipping Consultancy Service Ltd, railroad freight may be attractive to shipping service providers for several reasons.

"Train freight is stable and safe, and a train's capacity is much larger than a vehicle for road transportation or a cargo plane," Shi said.

But for long-term cooperation and smooth operations, railway services must improve current warehousing and their flow management. Developing solutions to meet courier services' needs is needed, including adjusting to their schedules and linking up railway and couriers' outlets, said Shi.

Launch of the service may also help railroads to generate more revenue and turn around the slumping performance of commercial shipping.

According to a report by CRC, in the first half of 2014, combined parcel delivery volume by rail in China totaled 770,000 metric tons, a 23.4 percent year-on-year drop.

As commodity freight has been dropping over the past few months, CRC has been working to develop potential capacities for parcel freight, the CRC report said.

CRC launched special fast-train freight delivery in the Inner Mongolia autonomous region, transporting milk and construction materials to other parts of the country, according to railway authorities.

More fast trains for e-commerce and courier clients running between Beijing, Shanghai and Guangzhou will be launched by the end of August, the 21st Century Business Herald reported.