United States logistics delivery giant UPS announced on Tuesday that it would add six more stations to its multimodal container rail service between Europe and China, saying it was responding to rising demand for goods deliveries along the route and that railway freight services had proved more cost efficient than other solutions.
UPS said it made the decision as Chinese small and medium-sized enterprises pushed to sell their products globally and the Chinese manufacturing industry continued its shift from coastal cities to interior cities.
The six new stations will be at Changsha, Chongqing, Suzhou and Wuhan in China, and Duisburg in Germany and Warsaw in Poland. They will be added to the existing Chinese mainland stations of Zhengzhou and Chengdu, and the European stations of Lodz in Poland and Hamburg in Germany.
UPS said the additional stations aimed to help companies strike a balance between supply chain costs and transport efficiency, by offering more options.
“China and Europe are two of the biggest trading partners in the world, with total trade volumes valued at 514.78 billion euros (8.9 billion) in 2016,” said Richard Loi, president of UPS China.
“China was the EU's biggest trade importer, with a value of 344.64 billion euros,” Loi added.
According to Gu Zhenzhong, vice-president of China Freight Forwarding at UPS China, more Chinese SMEs are going global than ever before, and due to increasing production and labor costs, manufacturing locations in China are shifting from coastal to inland cities.
Currently, Chinese companies' average logistics costs account for about 30 percent of total costs, while their competitors in developed countries have kept costs between 15 percent and 20 percent.