Rail services a major challenge to air in central Asia

One of the major challenges that the air cargo industry in the CIS and central Asia regions faces is the growth of rail services from the Far East, according to DHL Global Forwarding’s chief executive eastern Europe.
Speaking at the Caspian Air Cargo Summit, DHL’s Kerem Inanc said there were a growing number of rail services from China looking to compete with air and sea services.
While these catered for Europe, they also offered services to the CIS and central Asia region and were “finding acceptance with customers”.
He said it was not only low margin goods that were being transported using the rail services, but that life science and healthcare supply chains were also taking advantage of the new services.
As well as cost savings when compared with air transport, rail services were also secure, as the containers typically had electronic seals and GPS tracking, as well as being temperature controlled.
Services were also reliable and more environmentally friendly than airfreight, he said.
“[These rail services] are a major challenge for air cargo,” he said. “From my personal relationships with supply chain managers at our larger customers, everyone is looking for new opportunities and reviewing supply chain options.”
Other challenges faced by the air cargo industry were infrastructure issues in some areas, the flow of information, poor ground handling operations and price competitiveness.
He added that while there were demand challenges, domestic growth would provide opportunities.

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