- Rail based transports between China and Europe

DB Schenker
RLF
Kelsterbach, June 28, 2012

Agenda

Introduction DB & DB Schenker

China-Europe train activities
Rail advantage
DB Schenker advantage
Our offer today
Discussion

DB Schenker | June 2012

A rail freight company operating in Germany has

become a global transportation and logistics group
Until 2001

Today
Global transportation and
logistics network

National
rail freight network

Acquisitions,
organic growth

19.8 EUR bn1 revenue

Solutions along the whole
logistics chain

3.5 EUR bn revenue

Rail freight network

Global network with intermodal

services

Primarily national services

1 as

of: 31.12.2011

DB Mobility Logistics AG, Transport and Logistics division

d
rove
app 2011)
(DB

Today around 95,000 employees represent DB Schenker

worldwide in 130 countries

DB Schenker locations and employees

Europe (incl. Russia)
approx. 71,500 employees

Employees according to BU

34%
66%

America
approx. 9,200
employees

Own locations
Partners

DB Schenker Logistics
DB Schenker Rail
Asia-Pacific
approx.
12,500
employees

Near Middle
East / Africa
approx. 1,200
employees

Date: 31.12.2011, FTEs

DB Mobility Logistics AG, Transport and Logistics division

d
rove
app 2011)
(DB

Global transport networks for all modes of transport

strengthen the market position of DB Schenker

Worldwide land, sea, and air transport networks

Rail Freight

CL/SCM
Air

Rail Freight
No. 1 in Europe1)

Land transport
No. 1 in Europe2)

Air
No. 2 worldwide3)

Ocean
No. 3 worldwide4)

CL/SCM
No. 6 worldwide5)

Ocean
Land
transport

Source: DB 1) according to tkm 2) according to revenue 3) according to t 4) according to TEU 5) according to revenue
DB Mobility Logistics AG, Transport and Logistics division

d
rove
app 2011)
(DB

In our network we move tons of freight - worldwide,

24 hours a day
Rail freight transport

412 m t
Transport volume p.a.
Air freight

1.1 m t

Twice as much as Germanys

coal production in 2010

Weight of 240,000
elephants

Length of a row of
containers stretching
from Hamburg to
Shanghai

2 shipments
per second

1,100 football fields

Transport volume p.a.

Ocean freight

1.8 m TEU
Transport volume p.a.
Land transport

95 m
shipments p.a.

HH

SHA

Contract logistics

> 6.0 m m2
of storage area
Source: DB ML AG, figures rounded
1) Twenty-foot Equivalent Unit
DB Mobility Logistics AG, Transport and Logistics division

d
rove
app 2011)
(DB

Agenda

Introduction DB & DB Schenker

China-Europe train activities
Rail advantage
DB Schenker advantage
Our offer today
Discussion

DB Schenker | June 2012

There are currently two main rail routes used by

DB Schenker between China and Europe
ILLUSTRATIVE

Overview of main rail routes

Explanation
1435 mm gauge
1520 mm gauge

RU
Gauge change

PL

BY

1
KAZ

MN

Manzhouli (CN) Zabaykalsk (RU)

Alashankou (CN) Dostyk (KAZ)

Brest (BY)
Malaszewicze (PL)

CN

= Northern Route (lead

time: 26 days)1
= Southern Route
(lead time: 22 days)1

1) Based on block trains

DB Schenker | June 2012

DB Schenker has been investigating regular China-Europe

train services since 2007 service professionalization since 2011
Track record DB Schenker China Train
Number
of trains

First train between

Beijing
and Hamburg 2007

Test services on
Northern and
Southern route in
2010

Until
2010
DB Schenker | June 2012

11 company trains
run on a non-regular
basis from
Chongqing to
Duisburg (IT
products)
Start of regular
company train
service (Automotive)
on the Northern
route from Leipzig to
Shenyang
(eastbound)

2011

Since March regular

company trains run
on westbound route
on weekly basis

Further trains
planned on
eastbound route

Additional efforts to
realize a multicustomer train on the
Northern route from
China to Europe
2012

Time

Case study: Chongqing Duisburg train for IT customer

Operated since spring 2011, weekly service March 2012

Dedicated train for a customer from the IT industry with

reliable door-to-door time of 22-23 days

1 pilot train and 4 qualifying trains followed by 6 weekly

trains in August / September in 2011

Regular weekly service since March 2012
DB Schenker | June 2012

10

Case study: BMW trains Leipzig to Shenyang

In operation since late 2011

Packing of containers with Completely Knocked Down (CKD) parts in new logistics center in Leipzig

Block train transportation from Leipzig to Shenyang in North-Eastern China

Capacity of 40 containers (40`) per block train

Transportation time of 23 days (door to door)

Use of 40 feet high cube containers

Currently exclusive service for BMW

Daily trains planned

Approx. 40 containers per train
Transportation time < 25 days

DB Schenker | June 2012

11

Agenda

Introduction DB & DB Schenker

China-Europe train activities
Rail advantage
DB Schenker advantage
Our offer today
Discussion

DB Schenker | June 2012

12

Customers chose from different transport modes according

to their needs cost and time as major decision factors

Available trade lanes Asia-Europe (lead times1))

Comparison of transport modes CN-EU

Cost
USD/FEU

Transsibirische Eisenbahn
Trans-Siberian Railway (20 days)
S ou
ther
n

40.000
Rou
te

(16
day
s)

Air

30.000

(4 days)
Air route

Sea/Air

20.000
Se
ar
o
da ute (3
ys)
5

(
te
ou
r
a
Se

Rail

10.000

)
ays
d
5

1) Terminal-to-terminal lead times

DB Schenker | June 2012

Sea

13

15

25

35

Transit
time
Days

Rail is positioned between Ocean and Air offering

customers an interesting alternative to traditional modes
Comparison of transportation costs / lead time door-door
One notebook from Chongqing The Netherlands

USD / notebook
Lead Time

Ocean/Air

Rail

Ocean

1.41)

4.31)

38 days

22 days

Air

9
22 days

16
4 days

Ocean  Rail

Rail offers a 16 day lead time advantage. However, price is three times that of ocean

Air  Rail

Rail offers > 70 % price reduction. However, lead time is 18 days slower

Ocean/ Air  Rail

Rail offers > 50 % price reduction with same lead time

1) Depends on number of units per 40 Ct Assumption here is 2.500 units

DB Schenker | June 2012

14

Apart from economic advantages Rail offers the most

environmentally friendly transport mode
Example: Door-to-Door transport from Beijing to Duisburg
CO2-Emission

From an environmental perspective

kg CO2 / ton

5.727

Rail transport is the preferred choice for

shipments between China and Europe

Rail is not only the most ecological

mode of transport in terms of CO2

emission but also regarding other
pollutants1)

4.052

270

391

Rail

Ocean

Rail service between China and Europe

makes sense from an environmental as
well as a business perspective
Ocean+Air

Air

1) e.g. PM (particulate matter), NMHC (non-methane hydro carbons), SO2 (sulphur dioxide), NOx (nitrogen oxide)
Source: Eco Transit tool DB Schenker
DB Schenker | June 2012
15

Agenda

Introduction DB & DB Schenker

China-Europe train activities
Rail advantage
DB Schenker advantage
Our offer today
Discussion

DB Schenker | June2012

16

DB Schenker is in an excellent position to develop

rail services from China to Europe and vice versa

Vast distribution
network by rail and truck

Excellent relationship
with railway operators

Outstanding
operational expertise

Well-established block train

Participation in railway

Deep operational insights

system in Europe

Pre- & on-carriage by truck

feasible in China and Europe

based on dense branch
network

DB Schenker | June 2012

conferences (CN/EU land

bridge)

Three joint ventures with

China and Russian Railway

TEL (RU)

CRIntermodal (CN)

YuXinOu (CN, RU)

17

regarding booking, container

provisioning and customs

Comprehensive security

concept from container

loading to unloading
destination

Our joint venture CRIntermodal provides us with direct

access to a large terminal network in China

Terminal locations
Terminals (as of October 2011)
Planned Terminals

Offers intermodal container

transportation in China

5 shareholders that combine local and
Harbin

overseas expertise in transport and

logistics (CRCT, NWS Holding, CIMC,
Luck Glory and Deutsche Bahn)

Shenyang

Urumqi

Beijing
Tianjin
Lanzhou
Xi'an

Zhengzhou

Chengdu
Chongqing
Kunming

9 terminals already completed, 9 more

Dalian
Qingdao

Wuhan

planned)

Shanghai
Ningbo

Guangzhou
Shenzhen

Source: CUIRC China, DB Intermodal Services 2010, DB Schenker Logistics China 2010
DB Schenker | June 2012

18

Agenda

Introduction DB & DB Schenker

China-Europe train activities
Rail advantage
DB Schenker advantage
Our offer today
Discussion

DB Schenker | June 2012

19

In rail transportation there are two transport modes:

Single wagon and block train transportation
Comparison single wagon versus block train

Single Wagon

Block Train

Container is transported

Key feature

in several trains from

shunting station to
shunting station longer
breaks and detours likely

Booking of a single

Advantages

a single train without

unnecessary stops and
on the shortest route

Short transit time with high

reliability

container possible

Departure possible every

day

Lower price per container

than single wagon

Long transit time with

low reliability
Disadvantages

Container is transported in

Minimum of 41 x 40

containers required

Higher price per

Low frequency (e.g.

container than block train

perhaps only once per week)

Fixed departure dates

DB Schenker | June 2012

20

Currently we offer single wagons and company block trains

multi-customer trains are still under development

Product

Single Wagon

Company Train
(Block train for one
customer)

Multi-customer
Train
(block train for
several customers)
DB Schenker | June 2012

Availability

Available
(for CN-EU only
on Northern route)

Available

Not yet
available

21

Comments

Single containers or container

groups do not have prioritized
transit as complete block train

Block train consisting of at least

41-50 FEU containers from one
customer

Block train consisting of at least

41-50 FEU containers carrying
volume of several customers

All along the route, the respective railways have a vast set
of modern security measures in place
Overview of selected security measure along the route

Modern terminal facilities with qualified staff

Terminal areas are fenced in

The railway police are mostly located directly at the terminals

The terminal and station areas are under video surveillance

Entry to the terminal only for customs, railway stuff or with authorization (identification card)

The cargo on the terminal territory is guarded by the local railway police and security

personnel

Armed guards partially on the train, in terminal and stations

DB Schenker | June2012

22

Temperature can affect cargo safety - sensitive goods

require a solid winter solution for year-round transport

 Often, temperature
sensitive goods
transported

RU
Brest Ost
BY
PL

Ilezk

Duisburg

KAZ
Dostyk

Chongqing
Chengdutemperatures
Minimum

Kazakzhstan

Russia

B
Belorussia

DB Schenker | June 2012

Dostyk
Beskol
Karaganda-Sort.
Kandyagach
Aktobe
Akto
Ilezk-1
Orenburg
Kinel
Rusaevka Penz. Park
Kustarevka
Rybnoe
Bekasovo
Vjazma
CN
MN
Smolensk
Krasnoe
Orsha-C
Baranovichi-C
Brest Ost
23

-35
-40
-43
-45
-48
-40
-37
-30
-28
-29
-28
-27
-27
-26
-25
-23
-22
-23

 Extreme low
temperatures on the route
from China via Kazakhstan
and CIS during the winter
months
 Winter container solution
required to avoid the
temperature falling below 20 C
 DB Schenker is actively
working on a winter solution
and already well advanced

Advantages of the DB Schenker China train product at a

glance

Speed Much faster than Ocean freight

China train

Costs Less expensive than Air freight & Sea-Air products

Environment Environmentally most friendly transport

mode

Excellent relationship with railway operators along the

DB Schenker China train

key success factors

route

DB
Schenker

Well-established distribution system in China and

Europe

Outstanding operational expertise based on past and

current solutions

Foto: Rdiger Nehmzow

DB Schenker | June 2012

24

SMGS Waybill for test container from 2007

Progress in paper work has been made since then

DB Schenker | June 2012

25

Agenda

Introduction DB & DB Schenker

China-Europe train activities
Rail advantage
DB Schenker advantage
Our offer today
Discussion

DB Schenker | June 2012

26

Rail A new product for DB Schenker in China with

large potential

DB Schenker | June 2012

27