China Railway Corp to improve its freight logistics
June 20, 2013 Category Logistics, Railway transport
China Railway Corp said it will revamp its freight transport business. Many factors have hindered the growth of CRC’s transport business, such as complicated procedures for customers in making orders, as well as problems with deliveries and a lack of standardized rates for its services, said Cheng Xiandong, Director of the Transport Bureau of CRC. The reform of its freight transport is the first substantial move since CRC was established in March. CRC plans to become more streamlined by cutting red tape for customers and enhance cooperation with its clients, which the former Ministry of Railways (MOR) failed to do. Procedures for customers will be made simpler, transport will be tailored to customers’ needs, charges will be standardized and a network for a pickup and delivery service that goes from door to door will be set up, Cheng said. CRC will transport goods that range from coal and oil to cars and chilled fresh food.
The central government plans to reform its railway freight industry to boost efficiency and drive down costs in the fragmented logistics sector. The reforms are expected to simplify railway freight procedures and provide customers with better service. The move is the first of a series of measures planned by China Railway Corp (CRC) for the next few years as it faces pressure to boost demand for railway freight services and turn itself into an efficient and profitable business following the abolition in March of the Ministry of Railways (MOR). While China continues to invest in high-speed railway networks, the railway freight business is shrinking. Ministry of Transport statistics show railway freight volume dropped 0.7% to 3.9 billion tons last year because of economic weakness and less demand for coal. The trend continued this year, with freight traffic falling 0.8% in the first quarter. “We must turn from being a bulk-goods-focused transport service provider to being a full-service logistics provider,” Sheng Guangzu, General Manager at China Railway, said last month. Railway freight services in China are notorious for their complicated application procedures, long waiting times and inefficiency. Under the reform plan, customers will be able to arrange cargo delivery through a hotline and online platforms, in addition to traditional counter services. China Railway, while guaranteeing sufficient transport capacity for bulk goods, such as coal and petroleum, also promises to offer prompt service for customers with goods such as electrical equipment and daily necessities. It also plans to make pricing more transparent. The company’s subsidiaries in provinces such as Guangdong, Hunan and Hainan are among the first to launch door-to-door services that include the collecting, loading, packing, processing and delivering of goods. Previously, clients were required to deliver and pick up their goods at train stations themselves.
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