Davies Turner has added an air freight pricing mechanism for its direct, fixed-day, weekly Express China Rail service from Xi’an to the UK, such is the growing interest in the service from importers and shippers that have traditionally used airfreight.
Tony Cole, head of supply chain services at the UK’s leading independent freight and logistics company says: “Since we launched the service in 2016, we have used the standard overland freight industry pricing technique, which is USD per cubic metre. To make pricing more comprehensible for the airfreight sector, we are now additionally quoting per kilo rates, which is the language that airfreight importers are more used to dealing with. It makes a comparison between the relative costs of the intermodal rail service and airfreight more immediately obvious.
“At the current rate of just $0.24 per kilo or 2,000 cu cm (with a minimum cost of $120), it is no surprise that our direct Express China Rail service is becoming of great interest to the airfreight sector, which is facing sky high air freight rates out of China, with costs of $10 to $15 per kilo now being seen.
“Importers that traditionally move freight by air only need to factor in the slightly longer lead times for delivery by rail, to see what a massive cost saving they can benefit from by using our direct rail alternative. Importers that are able to remodel their supply chains to use the rail freight option may do so on a permanent basis.”
Davies Turner says that to date the rail freight service from China to Europe has been around 70% cheaper than air freight. But that price differential has rocketed as air freight rates reach record levels.