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Japan-Update

Nippon Express eyeing rail cargo service to Europe via China

China's new Silk Road to offer Japanese manufacturers a third shipping option

Cargo trains like this one now connect China and Europe regularly as part of the Asian country's Belt and Road infrastructure initiative.

TOKYO -- Nippon Express seeks to capitalize on China's Belt and Road Initiative to offer speedy, low-cost transport of autoparts and other cargo between Japan and Europe via trans-Eurasia trains.

The Japanese company now offers either air or marine shipment of cargo between Japan and Europe. Around this coming spring, it will add service combining air or marine shipment between Japan and China with train transport between China and Europe for moving goods from Japan to Europe and vice versa.

This new business will use regularly scheduled cargo train service out of Shanghai, Wuhan and elsewhere in China, as well as such European localities as Hamburg and Duisburg in Germany. Shipments from Japan will go to the port or airport closest to a Chinese train station. Following train transport to Europe, the cargo will be trucked to its final destination.

Marine-only shipping costs only a tenth as much as air but takes around 40 days via a route including the Suez Canal.

The new third way will shorten the time to between 20 and 30 days. Sea-train service will slash costs by 50-60% compared with air-only shipping, and the air-train combination will save 30-40%.

Nippon Express sees the new service moving autoparts and electrical equipment components, among other items. It initially targets 20 large-container shipments a month.

Cargo traffic between Japan and Europe has picked up on the back of brisk global economy. Companies looking to ship their products are having a tougher time securing cargo space with logistics companies. And even in air shipping, the supply-demand balance has tightened as airlines increasingly employ smaller craft.

Meanwhile, China has been actively adding direct cargo train service to and from Europe as part of Belt and Road. Such train runs numbered roughly 3,000 for January to November, double the full-year tally for 2016.

Nippon Express has negotiated with Chinese customs authorities to enable smooth transfers of cargo to and from trains. It will consider similar arrangements for rail cargo shipment between Southeast Asia and Europe via China as well.

(Nikkei)

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