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Asia-Europe rail shippers can save time and costs by offloading cargo in Prague

OFFLOADING cargo in Prague in the Czech Republic, instead of Germany can help Asia-Europe rail shippers needing to transport freight to Austria, Romania and Hungary reduce costs by EUR1,300 to EUR1,500 (US$1,529 to $1,765) per container and shave up to five hours off the transit time.

Around three-quarters of Asia-Europe rail cargo finishes its transcontinental journey in Germany, according to data from the Russian Ministry of Transportation. Cargo typically reaches its final destination via trucking, which is where the transit time and cost savings can be realised, reported IHS Media.

For example, the distance between Prague and Vienna in Austria is estimated to be 293 kilometres compared with 600 km from Berlin to Vienna. The distance from Prague to Budapest, Hungary, is only 524 km and five hours, compared with nine hours and 872 km to reach Budapest from Berlin. As a result, shippers can save between EUR1,300 and EUR1,500 per container on both routes.

Furthermore, offloading for distribution in the Czech Republic offers shippers greater access to the markets of Croatia, Austria, and Italy, while offloading in Germany is better for accessing markets in Belgium, the Netherlands, and France.

Shippers can take advantage of these savings via the new Asia-Europe routings with a service by OTLC, an intermodal rail operator active in Russia, Belarus, and Kazakhstan that said it is interested in developing additional routes linking Central Asia to the Czech Republic.

The first train terminating in Prague departed from the Chinese city of Yiwu on July 19, and regular services is scheduled to commence in November, according to corporate affairs director of OTLC, Maria Teterina, who added the new service will have an annual capacity of 100,000 TEU and the company aims to raise capacity to 300,000 TEU by 2020.

Demand for China-Europe rail that passes through Russia is expected to grow until at least 2022, according to the Russian Ministry of Transport. That is because the Trans-Siberian Railway Line's capacity of 450,000 to 500,000 TEU annually is quadruple the capacity of the alternative Baku-Tbilisi-Kars rail route.

Using the Baku-Tbilisi-Kars route to reach Germany is about 1,000 km longer than the Trans-Siberian route, with a cost of $8,000 to $8,500 per container and a transit time of 16 to 17 days. The Trans-Siberian costs between $6,000 and $7,000 per container with a transit time of 10 to 12 days.