The Current Status and Challenges of China Railway Express (CRE) as a Key Sustainability Policy Component of the Belt and Road Initiative

10.29.2021

The research is devoted to the analysis of the current development of Chinese railway express trains, problems, and the search for their solutions.

Under the auspices of the Belt and Road Initiative (BRI), China has been expanding the operation of its CRE (China Railway Express) system that links China and Europe. The CRE is today regarded as an important measure of progress by which BRI-related goals are achieved, and it has the potential to become the most sustainable mode of long-range transport. The system has been growing rapidly thanks to the active support of the Chinese government. As the Eurasian trade and logistics environment changes, CRE will become increasingly important as a third option that complements air and sea transport, with the demand continuing to accelerate among shippers for CRE service.

Block train transportation service (BTTS) is a chartered train transport service consisting of about 50 trains per unit that directly links a rail transport system to the shippers, allowing for non-stop delivery to the destination. BTTS is mainly used to transport containers and is operated according to fixed schedules. In China, BTTS is referred to as China Railway Express (CRE) in English, and these systems are in wide use to connect China with Central Asian and European countries. Since CRE launched in 2011, China’s BTTS has experienced numerous noteworthy developments. While CRE grew relatively slowly from 2011 to 2013, from 2014 onwards, the Belt and Road Initiative (BRI), China’s national vision program, has resulted in a sharp increase in the number of operations and the volume of goods transported.

First proposed by President Xi Jinping in 2013, the BRI aims to build a far-reaching Eurasian economic community that encompasses all nations situated along the two Silk Roads (the Silk Road Economic Belt and 21st-Century Maritime Silk Road). The five-stage connectivity plan guides policy related to infrastructure, international trade, finance, and people. The BRI treats railways as key infrastructure for accomplishing the achievement of a Silk Road Economic Belt, and block train operation using the Eurasian intercontinental rail network has been identified as a core task to be promoted; progress in this area is even treated as a performance metric. Pursuant to the BRI, the Chinese government is currently promoting the cooperating international linking of railway infrastructure and encouraging local governments to actively expand CRE operations. As a result, each local government now competes for the CRE operations to secure a strategic position as a railway logistics hub.

With such enthusiasm by central and local governments, CRE uses breaks records every year. As of 5 November 2020, 10,180 trains were operating between China and Europe, for a total transport cargo volume of 9277 thousand TEU, up 54% from the previous year. Most CREs are managed by China Railway, a national enterprise that operates trains between, among others, such as Chongqing–Europe (Yuxinou), Zhengzhou–Europe (Zhengou), Wuhan–Europe (Hanxinou), and Chengdu–Europe (Rongou). As of 2020, CRE connects 92 cities in 21 countries.

Maersk, the world’s top container liner company, recently began providing a new multimodal transportation service, using block trains connecting East Asia and Europe. Pantos, a representative the logistics company in Korea, also has recently expanded BTTS, using TCR and TSR on its Korea–Europe transport routes. It is predicted that BTTS use will continue to grow as regular services operating these block trains become more predictable and entrenched. From the viewpoint of logistics companies and shippers, BTTS is rapidly becoming a favored alternative transport system, appreciated for its special characteristic as a single mode of a multimodal transport system, while the Chinese government continues to believe that BTTS has the potential to become the most efficient and sustainable long-haul transport system between China and Eurasia.

Despite the growing popularity of this system, few researchers have focused on CRE-related systems, with only a few research studies having been conducted almost exclusively in China. This study was therefore undertaken with the following three research objectives: (1) investigate the current operating status of the CRE, along with the Chinese government’s policy related to CRE development under the BRI; (2) identify problems arising as a result of the rapid increase in CRE operation; and (3) propose the challenges that must be addressed for the sustainable development of CRE, especially as a major transport system, especially in trade with East Asia, Middle Asia, and Europe.

This study was based on a comprehensive review of all publicly available CRE-related materials and data, including articles in Chinese and English journals, as well as government documents. The information thus revealed may serve as a reference for more efficient and rational Eurasian transport networks. It is also expected that this study will stimulate additional research, particularly English-language research, into CRE and block trains.

The CRE is China’s block train transportation service, and it operates regularly according to fixed trains, routes and schedules to transport containers between China, Central Asia, and Europe. CRE transport services have grown rapidly, and are regarded as critical logistics infrastructure to the Silk Road economic belt envisioned by the BRI. In March 2015, “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road”document, which was jointly announced by the NDRC, the MOFA and the MOFCOM, presented and emphasized the importance of the CRE. Since then, the CRE has continued to grow, and it now serves as a barometer of the BRI’s performance. In quantitative terms, the operation performance of the CRE has grown 800x since 2011, as of 2019. Between China and Europe, the CRE connects 92 cities through 21 countries through an Eastern, Central, and Western corridor. Among these, the Rongou, as one of the CRE routes departing from Chengdu, and the Yuxinou, which starts in Chongqing, have seen the most active growth.

Recently, advanced shipping and logistics companies have begun expanding the use of the Eurasian railroad network as a multimodal transportation route that connects sea and block train services. Moreover, as the COVID-19 pandemic has made it difficult to secure shipping, the use of block train services by Russia and China has been increasing. Despite the expanding role and potential importance of the block train system in Eurasia, few academic studies have been undertaken on the relevant CRE policies and status.

This study comprehensively reviewed relevant domestic and foreign academic research, reports and policies, press news articles, and policy proposals related to China’s railroad and CRE-related policies pursuant to the BRI, as well as the operation status of the CRE. Moreover, this study identified some problems associated with the CRE’s rapid growth and conducted a rudimentary study for the design and use of a multimodal transport network incorporating the block train service.

This study presented several known challenges to the sustainable operation of the CRE: (1) resolving cargo concentration and bottlenecks at the CRE’s borders, (2) alleviating competition and subsidies between local governments, and (3) expanding the CRE demand and balancing round-trip CRE cargoes. Each of these challenges may be considered by future researchers interested in railway border-efficiency analysis; economic evaluation in the context of subsidies; the CRE’s logistics hubs; route and network optimization; customs clearance platform with block chain design, realizing the balance of trade cargo between China and Europe; and CRE market creation.

This study may have policy implications for the Chinese government and overseas logistics companies and shippers. First, it may help logistics companies design optimal transport routes and logistics networks, and help shippers understand CRE services, ultimately leading to greater use of the CRE. Second, by showcasing a niche logistics market to overseas logistics companies, the study should help those firms develop entry strategies into the Eurasian railroad logistics business. From the perspective of Korea, if train ferries and TKR (Trans–Korean railways) are connected in the future, this study can serve as reference material for the preparation of policies that will embody Korea’s role as an origin and destination station. As a first attempt at academic English-language research on the CRE’s status and challenge, the author hopes that the study will prompt increased interest in this emerging topic.
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