China Railway Operator Leases Cargo Trains to Drive Profits

(Beijing) – China Railway Corp. (CR), operator of the world’s biggest rail system, has rolled out eight new express cargo trains for lease, targeting mainly couriers as it tries to reduce debt and improve profitability in the era of air travel.
In late April, CR began calling for bids to lease four “units” that travel between Beijing and Shanghai and another four between Beijing and Guangzhou, according to a statement it released Wednesday.
Delivery companies and other customers can opt for either a whole unit, most of which have 16 or 17 carriages, or for individual carriages, said a CR employee who oversees the issue.
Qualified clients include all companies incorporated on the Chinese mainland with registered capital of at least 2 million yuan ($290,000) by the end of last year.
Bidders and their proposals will be announced on May 25.
The move is one of many reforms CR has conducted to improve its financial status. Since it was spun off from the Ministry of Railways in 2013, its lack of experience as a commercial entity has hindered its ability to adapt to unexpected market changes.
CR’s revenue from freight service, its most profitable area, has declined to 257 billion yuan in 2016 from 266 billion yuan in 2013, while its debt reached 4.7 trillion yuan last year.
The delivery sector in general has seen significant growth in recent years, due largely to shipments from e-commerce, and this isn’t CR’s first foray into the area. In 2014, it launched its first batch of e-commerce cargo trains running between Shanghai and Shenzhen, Beijing and Shanghai, and Beijing and Guangzhou, which were leased by leading couriers SF Holding Co. Ltd. and Shentong Express Co. Ltd.
A CR employee told Caixin that since this 2014 launch, there has been some successful cooperation between rail-system management and couriers, and that CR will continue allocating resources to deepen the collaboration.
Rail freight grew in the first quarter of this year, with goods packed in containers up 51% to 2 million 20-foot equivalent units. Cold-chain (temperature-controlled) shipping rose 84% to 206,000 tons, and 920,000 automobiles were transported an increase of 51%.
Contact reporter Coco Feng (renkefeng@caixin.com)
-
Apr 09 05:51 PM
-
Apr 09 04:54 PM
-
Apr 09 02:08 PM
-
Apr 08 07:01 PM
-
Apr 08 07:00 PM
-
Apr 08 05:11 PM
-
Apr 08 01:30 PM
-
Apr 07 06:52 PM
-
Apr 07 02:03 PM
-
Apr 06 06:55 PM
-
Apr 06 05:03 PM
-
Apr 06 01:50 PM
-
Apr 02 06:28 PM
-
Apr 02 05:42 PM
-
Apr 02 03:55 PM
- 1Call of Duty Mobile Developer Outplays Games Publisher as Timi Studio Earns More Than Activision Blizzard
- 2Huawei Deactivates AI and Cloud Business Group in Restructuring
- 3China Services Expansion Hits Three-Month High, Caixin PMI Shows
- 4China Signals Willingness to Further Open Up Its Military-Controlled Skies
- 5Cover Story: How a Gigantic Ship Shows the Fragility of Global Trade
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas