New Silk Way Logistics:

New Silk Way Logistics: "Equipment determines your success"

20 June 2019

New Silk Way Logistics has now had its own fleet of approximately one hundred conditioned, modified 45ft containers for more than six months. Totally adapted to the conditions on the New Silk Road and the result of three years of experience with conditioned transport to China. You can have the knowledge and business, but your equipment determines your success, the company believes. New Silk Way Logistics is a collaboration between KLG and H. Essers, two logistics companies from the Venlo region. The companies got together in 2016, when Royal Wagenborg was also still at the table. Who can divide, can multiply, was the philosophy. Ultimately, the two companies continued together.

45ft

Both partners already had high demand for freight transport to China in 2016. At that time there was a surplus of empty containers in Europe. "Freight traffic by train was mainly in a westerly direction. The containers had to be returned to China, "says Oscar Vermeij, Managing Director of the joint company.

The problem was that China mainly worked with 40ft containers, and here the sector fell short, according to the logistics service providers. "If you transport goods by train, it doesn't make sense to do this in 40ft containers. This format is common for ocean shipping, but you need larger equipment on a train, "says Hanno Reeser, Director of Strategic Development at H.Essers. So New Silk Way Logistics searched for a larger container.

Failure

However, it did not stop here. The customers of the two family businesses were mainly pharmaceutical and technology companies. The load consists of high-quality products, which must be transported under a certain temperature. Above all, the quality of the products had to be guaranteed, and that is a challenge when the railway leads right through countries such as Kazakhstan. "The available reefer containers were shut down every 10 minutes. Then your product is exposed to temperatures of -20 degrees. That was impossible, "says Reeser.

"The reefer containers from China were actually only used in the winter. In the other seasons they were not used or maintained. The quality deteriorates. Nobody was responsible for maintenance, "explains KLG CEO Erik Loijen. And so the company wanted its own fleet. "Since we have our own containers, we have little to no problems."

The product

The temperature controlled container works on a climate-neutral basis. It consumed fossil-free fuel, something that was not possible before because this type of fuel becomes sticky when exposed to extreme temperatures. The product has now been adapted to this.

The container is additionally equipped with frost protection and a unique internal system that prevents the fuel will freeze. If it is necessary to refill fuel on the route, this is detected thanks to various sensors in the container.

And so the container has multiple gadgets, such as an extra air duct that ensures that the temperature is the same throughout the container, and protection against theft of the tank and battery. "These were regularly stolen," says Reeser.

Intervention plan

New Silk Way Logistics not only invested in the container, but also in the intervention plan. The units are monitored 24/7 by means of an Orbcomm satellite system. "If something happens to one of the containers, an alarm is going off. There are several intervention points along the route, from here we can respond ”, Reeser explains. "On average, we can respond within 24 hours."

According to the logistics service provider, it is precisely the intervention option that is important. "The pharmaceutical industry is known for achieving liability. This way the chance of damage is much lower. But even if something happens, things are well organized, "he adds. The company has designed the Multimodal Railway Bill, a document in which it assumes responsibility for the entire journey.

Good price

The investments of New Silk Way Logistics indicate that they have confidence in this concept and the transport on the New Silk Road, despite the expectation that Chinese subsidies will decrease significantly after 2020.

"Rail is particularly interesting for cargo that previously was transported on a plane. There is a longer delivery time, but for a much better price. It is precisely because we work together and bundle the cargo that we can keep prices attractive, "says Vermeij.