Freight challenge ahead for railways

Poor service standards have long been a problem with freight transportation by rail. In the planned-economy era rail transport was a scarce resource, and enterprises had to request or even scramble for freight to be transported by rail. But facing fierce competition from road and air freight carriers the CRC knows the importance of raising its standard of service. The first requisite for a market-based operation is providing a customer-friendly service. The railway corporation's reform means a better service for customers as it simplifies the acceptance procedure and optimizes the transport mode on demand.

Sheng Guangzu, general manager of the China Railway Group Ltd, stressed the significance of a "door-to-door" freight transportation logistics service at a CRC meeting on April 12.

There is already successful international practice of "door-to-door" rail logistics service that the CRC can look to for inspiration. In the 1990s, the German railways holding company Deutsche Bahn AG established a German rail freight company and began to explore a combined freight transportation mode. It has gradually created a "door-to-door" railway-highway service, which has made the company one of the leaders in global logistics.

A "door-to-door" logistics strategy and transportation of goods besides coal, petroleum, minerals and construction materials will be crucial if the CRC is to compete successfully in the logistics market.

The reforms show CRC's willingness and determination to make a market-based transformation, but several challenges lie ahead. Transportation of "the last kilometer" by highway is the CRC's weak point, and it directly determines the efficiency and quality of a "door-to-door" logistics service. Moreover, although the CRC's reforms this time will not raise the price of freight transportation by rail, fluctuating prices are both reasonable and unavoidable if the CRC really plans to operate according to market forces. The market and society are waiting to see the reform's effect and the CRC's next moves.

The author is a writer with China Daily.

E-mail:wangyiqing@chinadaily.com.cn