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German port operator sees opportunities in new Chinese-European trade routes
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WORLDWIDE discussions are underway regarding the future of foreign trade and free trade agreements. In 2011, Germany and China celebrated the opening of the North Silk Road, which started originally in Chongqing and terminated in Duisburg city, Duisport. Duisport is the biggest inland port in the world.
The Rhine-Rhur region became iconic in the last century for its iron, steel and charcoal production industries, and, back then, its smoggy air. Following a downturn in Germany’s heavy industries that began in the 1990s, the region is now also known for its high unemployment rates. Duisburg is working hard to transform itself, and is focusing on service industries and knowledge-based economy.
Erich Staake, CEO of Duisport, has offered some insights about new Chinese links to Europe, including the North Silk Road and the New Silk Road, and their importance to the region and the port’s 45,000 employees.
Q: Mr. Staake, why is the New Silk Road important?
A: The New Silk Road is of remarkable importance for Duisport. The “One Belt, One Road” initiative of the Chinese government has developed new perspectives and possibilities for trade routes, logistics and industries. It is of great importance to the Southeast-Asian and European economic relationship and transactions for an optimized commodities exchange.
The transcontinental container route, the North Silk Road, originally started in Chongqing. Today we serve more than 12 cities in China. Duisburg has actively contributed to the development and structuring of the New Silk Road and we intend to further develop the network.Duisport connects with all European logistic-trade corridors. We concentrate all commodity streams that are necessary and important for export to China and the distribution of all imports from China in Europe.
Our business is logistic services. It is crucial for us to offer our European clients solutions and to include essential industry clusters in China.
Q: What are the further development plans for the port and the New Silk Road?
A: We are contributing our knowledge, especially where we see new infrastructure and new trade routes emerging, like in the “One Belt, One Road” initiative.
Currently we are contributing our knowledge in Urumuqi and consulting on future entrance and exit gates for the “One Belt, One Road” train system, which will become the world’s largest logistic system.
In 2017, we will open new logistic centers with our partners in Turkey and Belarus, and we are reviewing further expansion plans elsewhere, such as in India and Iran, while other regions along the New Silk Road are as well of great importance.
We are an expansive medium-size enterprise group. Before we invest in emerging markets along the New Silk Road, we investigate and decide if they are of economic importance for us. In general, the New Silk Road is of great importance for the revitalization of the economy and it offers huge chances for all countries along the route, in particular the Trans-Eurasian region, the Caucasus region, Belarus, Kazakhstan and Iran.
We see positive growth potential for the next 10 years. We are contributing our know-how and our new technologies as a central logistic hub in Europe.
Q: How is the capacity utilization of trains on the return route to China?
A: Regarding exports from Duisport to China, we see an imbalance when it comes to utilizing trains. We are working to improve utilization in both directions by fully loading trains, and by enabling additional customers and industries.
For example, over the last few months, we have been consolidating trains at borders, so that commodities from Poland, Belarus and from other logistics centers can be loaded and transcontinental container trains will have better capacity utilization. Further, we consider e-commerce to be very important to attract more customers in new industries and to move customers away from the relatively expensive airfreight to cheaper and faster rail freight.
Lead time is very important for our customers. That’s why the transcontinental container train route provides a great alternative with its new logistic centers along the route.
Q: How will the current situation along the New Silk Road influence its further development?
A: On the Northern Silk Road we have no restrictions. Eastern European countries and Russia are very interested in the further development of the New Silk Road. Concerning the South Silk Road, it is still under construction. There is not only one southern route; there are several options.
After the Bosporus tunnel in Turkey is completed, we will have more options. Whether it will be the Balkan route or other possibilities, this we will decide when the time is ripe.
The author is a researcher and consultant on Chinese investment in Germany. She has been working in China in executive positions and for Chinese investment companies for many years. Shanghai Daily condensed the article.
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