Multimodal halfway around the world

On behalf of Fiat, DHL delivers engines from Italy to Japan. The transport is multimodal. The door to door delivery period is just 35 days. How does this work? Since summer 2016, Deutsche Post DHL has organized the multimodal transport of 100 containers with transporter engines from Italy to Japan for the CNH Industrial corporation. CNH Industrial was created following the merger between CNH Global and Fiat Industrial parallel to Fiat Chrysler Automobiles and currently includes twelve brands – among others, Iveco, Case IH, Steyr, New Holland and Magirus. An innovative route was taken for the transport of the engines: the modes of transport road, rail and sea are used along the “new Silk Road”, a large infrastructure project between Asia and Europe that is supported by the Chinese government. The total duration of the door to door transport amounts to approximately 35 days. “This shortening of the transport duration was the main reason for CNH Industrial to decide on the solution to use the land route towards Japan”, explains Thomas Kowitzki, Head of Multimodal at DHL Freight. “By sea route this transports takes up to 60 to 65 days.”

Multimodal Transport

The CNH Industrial transport beings in Naples, where DHL initially inserts empty containers into the process flow and passes these into the CNH Industrial engine plant in Foggia. This is where the goods are loaded into the containers, back at the intermodal-hub in Naples, the Italian railway service provider CEMAT takes over the rail transport of engines to Nuremberg. The rail terminal located there is perfectly suited for the connection towards China, numerous rail transports travel via this hub. In Nuremberg the CNH Industrial engines are transferred to a DHL train that first reaches the Polish terminal Małaszewicze, which is directly on the external EU border to Belarus. This terminal plays a key role for rail transports that are eastbound, from and to China and it is a central hub for many companies. “In Małaszewicze we operate our own office with cargo handling, which coordinates all of our China transport operations and controls them within this entire network”, says Kowitzki. “For the rail transports for CNH Industrial, we use the so-called western corridor via Kazakhstan up to the West Chinese city of Chengdu”. In this case, this proved to be the perfect alternative.

The new Silk Road – more than just a trade route China wants to intensify trade between Asia and Europe with the revival of the old trade route via the Silk Road. In doing so, the Chinese government is promoting a strategy for the traffic engineering of Central Asia, which is to be realised via the overland route (“new Silk Road”) as well as the sea route (“maritime Silk Road”). The objective of the project is to connect 65 countries and 4.4 billion people through train and road connections as well as through a maritime route with deep sea ports from China to East Africa through to the North Sea. Since June 2013, DHL trains have been operating on this route to some extent.

In the Chengdu rail hub, where all trains between Europe and China are consolidated, DHL works together with the Chinese railway service provider CDIRS. The DHL trucks are then used from Chengdu onwards, which transport the CNH Industrial engines to the ports. From there, the journey continues to the ports of Yokohama using the short sea carrier and thus, directly into the main factory of the automotive customer, Kawasaki. “In this project, the main challenge for us is the efficient coordination of all modes of transport involved in the transport process” states Thomas Kowitzki. “Since the topic of speed is critical for the success of this process for all those involved, we need turnaround times for the different locations as quickly as possible.” To plan and organise this hand in hand, so to speak, is under no circumstances banal. “When one mode of transport reaches its destination, the next must be directly available”, states Kowitzki. “Our very big advantage in doing so, is that we are represented in all interfaces and to some extent with our own branch offices and thus, have direct access to the modes of transport used.” Due to the global presence, it would be possible to permanently optimise the network and to cover the increasing demand according to more efficient routing as well as multimodal transports.

40 foot container non-stop

Furthermore, with this holistic approach, one of the main requirements on part of CHN Industrial is met: In this case having a large number of service providers involved in the project was explicitly not requested by the customer – personally controlling the transport chain was a clear priority for the Italian automobile manufacturer. This is so that the communication and interface problems are minimised and a responsible system provider is put in place as a central contact person. “As DHL, we obviously have a clear advantage towards the competitors”, says Kowitzki.

Further expansion planned

“At the moment, business along the new Silk Road is proving to be very positive for us”, says Kowitzki. “The volumes are increasing, we are operating trains in both directions every day”. Rail transport from Europe to China is also extremely interesting for many shippers because large shipments can be transported quickly or rather cost-efficiently on this route as an alternative to sea or air freight. And the more volume that is moved via the relation, the more the shippers and DHL benefit from efficient round trips and achieve economies of scale. Although excess weight in the case of volumes is still on the westward directed route from China to Europe – the share of transport volumes from Europe towards China is said to have continuously increased in the past years. Now this amounts to almost one third. In general, DHL is aware of the growth potential in the region of Central and Eastern Asia. Therefore, the relation Europe – China was more the focus of interest to date, but in the future even the neighbouring states could benefit from multimodal logistics handling. “We are receiving more requests from Vietnam, Taiwan or South Korea”, says Thomas Kowitzki. “Even a possible link with other continents based on the existing core link already stands out today”. Thus, DHL currently realised a relation Taiwan – China – Europe – Tunisia. First the trains are tested on the so-called Southern Corridor from China via Turkey to Europe as a possible attractive route for the future. But there are other modes of transport that also play an important role for DHL: with the hub of the “maritime Silk Road” in the Greek Piraeus, the trade between Asia and Europe is also to be accelerated further – as a multimodal sea freight and road transportation solution for shipments between Europe, Asia, North Africa and the Middle East.

This article appeared in “Der Bahnmanager – the business magazine for rail transport“ (issue 4/2016), www.bahn-manager.de
Author: Thomas Wöhrle

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