China's plunging coal freight has pushed state-owned China Railway to diversify -- by including the transportation of break-bulk cargo.
Zhao Jiapu has worked in the transportation sector for 15 years. He contracted the freight transportation for a railway last year.
Zhao said, "Railways used to transport exclusively bulk goods. Breakbulk was not its business. We did not have any chance to work with the railway. Since 2014 when China Railway expanded its business, we had the opportunity to work with the railway for breakbulk transport. The cost is 30 percent lower than before."
Zhao shipped 300,000 tons of goods. That number is expected to rise to 500,000 tons this year, including break-bulk cargo. That's cargo that's too big to fit in containers and must be transported as individual items.
"Our trucks used to run five long trips on average monthly. But that was reduced to 2 or 3 as the market turned down. To give an example, from Huhhot to Beijing, railway transport accounted for the most mileage after we worked with China Railway, the rest becomes short-distance transport by trucks in urban areas. Now our trucks can run 2 or 3 trips daily, both drivers and the company make more money," said Zhao.
China Railway has allowed its regional offices to have more power in fixing prices as a measure to counter falling freight volume. The prices can be cut by as much as 30 percent. This makes it easier for the salesman of China Railway's Hubhot office to promote railway transport.
Besides, China Railway has also built a large logistics center close to its Shaliang station, facilitating the load of goods.
"Railway used to feed on transport of bulk goods. But large coal consumption which characterizes China's economic development will change along with a new growth model. Under this circumstance, China Railway has to think of a new way to grow its business. The company should no longer focus on quantity but the quality of services provided to breakbulk goods," said Ji Jialun, professor of Beijing Jiaotong University.
