China planning high-speed rail freight network to help e-commerce sector

Matt Ho
·4-min read

China’s state-owned railway operator is planning to accelerate the development of a high-speed freight network in the hope of bolstering the e-commerce network.

A development plan published in mid-August also includes plans to further expand the passenger network and build an advanced control system that will integrate home-grown technologies such as 5G telecommunications, the Beidou satellite navigation system and artificial intelligence.

China has ambitions to become a world leader in rail transport and earlier this month the Ministry of Transport indicated that it would redouble its efforts to develop a network of maglev trains, which can reach speeds of up to 600km an hour (370mph).

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But the cost of freight transport is currently estimated to be around twice that of countries such as Japan and the United States – something the 15-year development plan published by China State Railway Group is designed to address. President Xi Jinping has also identified high logistics costs as a barrier to economic development.

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Huang Qifan, the former mayor of the southwestern metropolis Chongqing and deputy director of a government think tank, wrote in an article published in an official journal last month that China’s logistics costs amount to 15 per cent of GDP, almost double those of the US, Europe and Japan.

“It’s commonly agreed that high logistical costs in China are one of key factors behind the relatively low usage of railway for cargo that stands at about 9.5 per cent,” Huang wrote in the China Economic Weekly article.

“Increasing the percentage to 15 to 25 per cent would help reduce [China’s] logistic costs significantly,” Huang said, pointing out that trucking accounted for 74.3 per cent of the overall volume of freight and water transport made up the remaining 16.2 per cent.

China already has an extensive network of high-speed passenger trains. Photo: Xinhua
China already has an extensive network of high-speed passenger trains. Photo: Xinhua

While China Railway’s latest blueprint lacks details, a central government transport plan published last year included plans to develop high-speed freight trains that can go as fast as 250km per hour.

China Business Journal reported recently that the planned high-speed freight service would mainly service e-commerce businesses by transporting premium and small sized packages.

China first set out plans to develop high-speed freight trains in 2014, but the plans were shelved twice due to low demand.

The project was revived in late 2017 when China Railway Rolling Stock Corp, the world’s largest maker of freight wagons and passenger carriages, told Science and Technology Daily it was developing high-speed freight wagons designed to let forklifts load and unload goods.

China Railway’s latest plan aims to develop an array of cargo transporters, including heavy duty trains with a 30,000-tonne payload, faster express freight trains and new containers.

It also plans to digitise its logistics facilities in railway stations and warehouses.

Wu Guodong, deputy director of the locomotive and car department of China Railway, said there was great potential for high-speed freight services as online business continued to flourish in China.

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“China’s fast-growing e-commerce provides enormous market potential for the express freight services,” Wu said in a press briefing for the development plan.

“We are actively researching and developing our high-speed freight trains and conducting advanced studies on market demand and operation,” he added.

Speaking at the same media briefing, Mo Zhisong, director of China Railway’s signalling division, said that the new smart control system will be much more efficient compared with the century-old conventional fixed block system.

“Train intervals will be shortened from the current minimum three-minute period to two minutes, resulting in a 30 per cent increase in transport capacity,” Mo said, adding that the new system would also help save energy.

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