China sees imminent opportunity in railway supply-chain logistics

If China perseveres in emulating North American rail practices, it could witness substantial growth in the transportation of containers by rail, recent research by the World Bank showed. 

Certain operating practices and regulatory reforms have proven to enhance railway development on our continent, the study revealed. The capability of rail operators to adapt service offerings such as price, route and delivery timing for individual client needs, along with “mainstreaming” specialization along the value chain, can enable China to experience the type of growth previously achieved here in North America.

“A more intense use of rail as part of the country’s containerized freight delivery logistics system could be a game-changer for Chinese manufacturers and consumers alike," Luis Blancas, a World Bank senior transport specialist and lead author of the paper, said.

Blancas cited the overall transition of manufacturing to China’s western provinces as an impetus for the potential change. With increased distance in international and domestic shipments, better transportation is needed, the paper stated. Additionally, China’s highways have becoming increasingly congested, hindering efficient trucking.

Freight container traffic in China has grown quickly since 1998, although that growth is specific to trucks and ships rather than trains. When the U.S. faced similar challenges, it responded by deregulating the rail transport industry.

Now, China stands to gain by adopting the American approach, according to the research, in part because the country shares economic geography characteristics with the U.S.

The World Bank has supported numerous railway development projects in China.