On Sunday, the Chinese government launched a rail freight service between China and London. This is the first direct rail link between China and Great Britain. The route of the service will traverse from Beijing, across Asia and Europe, before terminating in London.
The route is actually not new at all. It is part of the old Silk Road, which commenced in 200 BC, through which Chinese silk caravans carried wears to Europe and Africa. The trail provided much wealth and prestige for the Chinese Empire of the day.
Now, Beijing is aiming to resurrect this historic trade route by using rail power.
The journey is as much an engineering challenge as a logistical problem. Freight must swap trains along the way, as railway gauges vary between the connecting countries. In its 18-day journey, freight will span 7,456 miles of railways, crossing Kazakhstan, Russia, Belarus, Poland, Germany, Belgium, France and the UK.
The new route unlocks a new option for shippers. Currently, the choice is two-fold. One, take an ocean-bound route, which, although cheap, can be slow. Two, use an air carrier that is considerably faster, but much more expensive.
A direct rail link between Beijing and Western Europe enables manufacturers to explore new means to lower transport costs. The line may not provide a suitable alternative to all producers, but canny negotiators can leverage the new market entrant to lower prices of their established pathways by boat or plane.