New silk route brings countries together

When the Chinese government wants something, it happens. Industry is developing rapidly in cities such as Chengdu. Manufacturers of premium electronics are relocating there. This has the knock-on effect of boosting the standard of living in the area, which in turn promotes demand for goods from Europe. This is the basis on which the BRI can achieve success in Europe. One company to make this realisation early on was Tilburg based synchromodal logistics provider GVT. Following a visit from a Chinese delegation, one of the company's employees stepped up to the plate and took an impromptu visit to Chengdu. "I wanted to see if we could do business by shipping goods for the Netherlands by train. We had it all sorted out in just two days," said General Manager Roland Verbraak.
"Dell, Hewlett Packard and Apple are based there and have offices in this area, so it was an interesting proposition for them.

The Chinese prefer to work with privately owned partners in the west. We initially negotiated the entire contract ourselves with the local authorities in China, like the mayor of Chengdu. The city has 17 million inhabitants, which is almost as many people as the entire population of the Netherlands. We also spoke with the vice governor of the Sichuan province; trade decisions are made at the top in China."

The westbound GVT Transport & Logistics trains are completely full."We are at 70% capacity on the journey back to Chengdu, and we are increasingly using groupage solutions", says Verbraak. "Russia is something of a problem due to the EU boycott — we can transport meat from South America on the train but not from Europe, or only pork belly. But we also export machinery, luxury cars, hydroculture products, wine and beer and flower bulbs via this route."

GVT is something of a pioneer for BRI in the Netherlands, prompted by the advantageous pricing of train transport. "Air freight costs four times as much and it can still take seven days due to a shortage of capacity. Train transport is not much slower by the time you've factored that in.

It's also important to note that sea freight is not necessarily cheaper per se. The train often comes out on top for freight from here to Chengdu. This is due to the onward transport that must be considered — if the goods arrive by boat in Shanghai, they then need to be transported a further 2,000 km to Chengdu. That is something of a sore point because transport costs in China are really quite high at EUR 1.30/km. I can't quite put my finger on why it costs so much, because China has no regulations on driving times and salaries are lower."

For this reason, GVT plans to set up its own transport business in China in May, in the form of a wholly foreign-owned enterprise. "We believe that
employing Chinese workers who have been trained in the Netherlands can make the difference. That in itself is pioneering, and it remains to be
seen whether our transport expertise can be brought to bear in China."

This is something of a passion project for GVT, which last October opened the Dutch Pavilion in Chengdu. "We work on behalf of European manufacturers to establish whether a product can be imported into China, we make sure all the paperwork is in order and the labelling is correct, and then we present it in what you could call an ongoing exchange. Then there are the Chinese customers who place orders. We take care of the logistics again, helping to ensure that the eastbound trains are full. There are mutual benefits for trade — really it's like the trading posts of centuries ago."