(ATF) China plans to invest 200 million yuan ($28.5m) to build China-Europe railway distribution hubs in five cities.
The project aims to make better use of the railways and reduce costs, according to the National Development and Reform Commission (NDRC) earlier this week.
Chengdu, Zhengzhou, Chongqing, Xi’an and Urumqi will also host the hubs and are already nodes in freight train services to and from Europe or key logistics channels.
The construction of China-Europe railway hubs will break the current separate status of the cities and better serve freight, said Wang Guowen, director of the Centre for Logistics and Supply Chain Management at the Shenzhen-based think tank China Development Institute, according to a 21st Century Business Herald report on Wednesday.
Rail freight services have increased as coronavirus lockdowns and reduced sea trade has cut global shipping. The city of Xi’an, alone saw a 42% surge in freight carried from its station to Europe in the two months through June, according to local media. Other regions, including Shandong province, are adding services to the West to cope with increasing demand.
As more cities start to run freight rail services to and from Europe, intensive competition has emerged in transportation prices, said Wu Jingyu, director of the Asia-Europe land bridge International Freight Train Coordination Service Centre at the China Communications and Transportation Association.
According to Wang, most China-Europe freight trains pass Urumqi without stopping and the establishment of the new hub will enable domestic and foreign goods to travel on the trains at the same time to reduce costs.
Wang also suggested part of the funding will be used to build platforms for information sharing and coordinate trains running among the five cities, according to the report.