Finnish connection proves itself
Covid forces creativity: more and more containers travel from China to Central Europe by rail – via Vuosaari
Zoltan Takacs had a big problem in March 2020. The Transport Manager of the Shanghai-based Euro-Asia Cold Chain, he was used to a certain instability in the international transport market, but the Covid-19 pandemic had turned everything upside down. Getting goods from China to Europe needed to work as before, but how to do it safely, quickly, and cost-effectively?
Ocean freight rates jumped up in the spring of 2020, and there was no guarantee that the containers would arrive in a reasonable time. What about the train option? Tracks to Central Europe seemed to be blocked even before the corona crisis, and the situation was by no means alleviated when the pandemic hit.
"We kept thinking that new solutions are needed now. Finally, in the autumn of 2020, the idea came up that we could export goods from China to Europe by container train – via Finland," says Takacs, who had been interested in the Finnish route already earlier in the spring, when the Covid panic was at its peak.
"The time was not yet ripe then. Within a few months, however, the situation had changed dramatically, and we were ready to give it a try," he says.
Looking at Vuosaari
The idea was to bring a container train from China to Finland and unload the containers onto ships bound for Europe in Vuosaari. Steveco was selected as the partner without much friction.
"Steveco was a natural choice for us because they have a strong operation in Vuosaari."
The cooperation started in earnest in January 2021, and the first train from China arrived at the Port of Vuosaari at the end of the month. The containers continued their journey across the sea to Hamburg on 30 January.
Also, the more you have, the more you want.
"We would like to expand our service further and deliver containers all over Europe," Takacs notes, adding that new plans are constantly being made to make this possible. In addition to Germany, containers are already being exported to the Netherlands and the UK.
Goods of Chinese origin arrive from Hefei, China in the consignor's own containers – so the containers are not owned by any shipping company, which is typical in the industry.
Catching the train from China
Mia Brunila, Sales Director, Steveco Logistics, explains that the import operation in Finland works by Sa-Tu Logistics handing over the containers to Steveco.
"Once the customer's containers have been unloaded from the train, Steveco takes over. Steveco arranges the transport of the containers from the port onwards and prepares the necessary customs documents," Brunila describes Steveco's role.
Heli Härkönen, Forwarder at Steveco, says that as soon as the train from China arrives in Vuosaari, it will be determined immediately which is the first ship to the desired port of destination that can accommodate the containers.
"We contact the shipping companies and try to find the fastest possible transport for the containers," she says, adding that the dialogue with the shipping companies is exceptionally good.
"Flexibility is essential on both sides when arranging the transport and it works very well," says Härkönen. In addition to her, Henna Leskinen, Forwarder, is another person who is "catching" the trains.
"Together, we have already managed a dozen trains from China," says Härkönen, who was interviewed in April.
Mia Brunila adds that it is not always easy to book space on a ship – especially during busy periods – as the arrival times of the trains may change either en route, at the Russian-Finnish border or on the Finnish side. "Especially in the global turmoil of container shipping, the availability of space can vary a lot within a very short time."
Lack of surprises is the biggest surprise
According to Zoltan Takacs, the container train via the Northern Route has got off to a flying start and there are currently two trains a month from China to Vuosaari. Takacs admits he is surprised at how well everything has gone so far.
"Perhaps the biggest surprise is that everything has worked brilliantly. We have had a great start and our Chinese partner Hefei International Land Port has also been extremely pleased with the operation."
The Chinese state-owned company Hefei International operates the container trains and Euro-Asia Cold Chain works closely with Hefei as one of its freight forwarders to ensure a steady flow of goods from one country to another.
"Typically, the train journey takes 15–20 days. There are some challenges along this route, mainly related to the different customs clearance arrangements. We have also had some delays due to the tightening of international freight regulations by Covid-19," Takacs explains.
Online shopping as a joker card
So, what kinds of goods are flowing from China to Europe on the rails? According to Takacs, the containers are mainly loaded with refrigerated storage equipment, tools, and machine parts, but the growing popularity of international e-commerce is also likely to be reflected in the contents.
"E-commerce products are the biggest new trend we have now. Possibly the first containers filled with e-commerce products will leave China for the UK in April," he reveals.
The aim is to develop the operation so that containers emptied in Europe return to China full of goods. There is still work to be done in this respect, because the flow of goods is currently very much from east to west instead of the other way round.
"No one wants to transport empty containers. This is something we are working on," says Takacs.
In fact, Euro-Asia Cold Chain and Hefei International Land Port want to start moving goods from west to east very soon.
"We want to run two trains from Europe to China every month, possibly starting operations as early as the end of April," Takacs says.
The North is calling
Another area for development is accelerating operations in the Nordic countries. According to Takacs, sea freight from China to the Nordics is so expensive that there is no doubt rail transport will become considerably more common at some point.
"In addition to the UK, we are particularly keen to develop transport to the Nordic countries," he confirms.
Mia Brunila also believes that the northern route still has a lot of untapped potential, in terms of both exports and imports.
"There are so many containers heading to Central Europe that the traditional southerly route is heavily congested at times. In this situation, a 'fallback' route through Finland is a good option," she says.
In addition to the geography, the reliability and operational security of the service are of course also important. In Vuosaari, unloading containers from the train and loading them onto the ship goes smoothly, because that is the hard core of Steveco's business.
"The premise is that for every consignment, we find a solution that works. We can forward containers quickly, at competitive prices," Brunila says.
A strong option
Obviously, shipping containers as quickly as possible is especially important now and in the future.
"We have destinations all over Europe, and we always try to find direct shipping connections for our customers' containers, which shortens the transit time."
According to Brunila, Steveco wants to show that the Finnish route is a viable option in all respects.
"Steveco is able to provide an efficient, versatile and flexible service. We hope that deliveries will continue even after the 'exceptional periods'."
Hefei International runs container trains from China
Hefei International Land Port Development Co., Ltd. is a Chinese state-owned port operator based in Hefei Province. The company operates container train services from China to Europe with an integrated logistics model including sea, land, and air.
The company's container trains depart from the Hefeibei railway station and arrive at the European terminal in Vuosaari, Duisburg or Hamburg about 18 days later. The company also offers container trains to Almaty, Tashkent and Dostyk, and has a sea-rail link from Hefeibei station to the port of Ningbo.
In addition, Hefei International Land Port Development offers its customers rail transport services customized for special requirements such as those of the automotive industry.
Text: Sami Anteroinen
Photo: Timo Riihelä, Steveco Oy