DHL Global Forwarding has become the first international forwarder to launch a two-way rail freight service between Kunming, China and Vientiane, Laos.
The first-of-its-kind rail service in this market was enabled by the newly opened China-Laos railway and shortens transit time between Kunming and Vientiane from two days via road to about 20 – 24 hours.
Leveraging the new railway, DHL’s scheduled service runs in both directions between China and ASEAN markets, including Thailand, Vietnam, Cambodia, Malaysia, Singapore and Indonesia, providing what it says is “an attractive, highly cost-efficient alternative in a time when logistics costs are at an all-time high.”
The service promises up to 50 per cent cheaper shipping costs with similar or faster transit times than air freight from China to ASEAN.
“The China-Laos Railway is a historic moment for the region,” says Steve Huang, CEO, DHL Global Forwarding Greater China. “It strategically places Kunming as a hub for the Indochina market as the gateway to ASEAN economies.
“ASEAN has a combined GDP of USD 2.55 trillion and is predicted to be the fourth largest single market in the world by 2030. We see a very bright future for trade and economic activity in the region, which will translate to increased demand for logistics,” Huang adds.
The two-way service combines trucking from all over China to the hub in Kunming, running through the China-Laos railroad, then onward with DHL’s established road network service and back, with significant cost savings and competitive transit times, providing a viable transportation alternative.
DHL gives examples of the services, including:
- Chengdu – Bangkok – road/rail services are 78 per cent cheaper and 2 days faster than airfreight;
- Kuala Lumpur – Chengdu – road/rail services are 70 per cent cheaper, same transit time compared to airfreight;
- Shanghai – Singapore – road/rail services are 38 per cent cheaper, 4 days longer compared to airfreight.
“China is ASEAN’s largest trading partner, growing close to 40 per cent year-on-year,” says Thomas Tieber, CEO, DHL Global Forwarding Southeast Asia. “The new rail service connecting China and Laos will transform Laos from a land-locked country to a land-linked hub, creating closer trade linkages between Laos and China, and to all economies in the Belt and Road Initiative (BRI), including ASEAN.
“Businesses moving goods between China and ASEAN countries now have a strong viable alternative between air and ocean freight, and can tap further into DHL’s robust road freight and multimodal network in the Southeast Asia region.”
The brand new China-Laos Railway is one of the six international economic corridors under China’s Belt and Road Initiative (BRI). The Laos section of the railway is 414-km that connects Kunming (China) to Boten, Laos’ northern border with China, to Vientiane in the south, on its border with Thailand.
The route will cut the journey time from Vientiane to the Chinese border to less than four hours, compared to 15 hours by road. At Boten, the railway will connect with the BRI network at Kunming, China, through another 595-km railway link, providing Laos with a land link to global and regional supply chains.