International Guest Speaker Alan So speaks at the 5th China International Logistics Development Conference in Changsha

1. China Europe
Railway
Benefits &
Challenges
By Alan So

2. China Europe Railway, Benefits & Challenges
b y A l a n S o
Alan So
CFR RINKENS LLC
Little Background
• 20 years freight and logistics experience in HK and China
• Start work in the China Europe railway since 2014 after
join KTZE, Kazakhstan state own company
• Currently work for CFR Rinkens who is a US company
specialize on the finished vehicle logistics, base in
Chongqing at the moment
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3. China Europe Railway, Benefits & Challenges
b y A l a n S o
Logistics
Between China
and Europe
Sea Freight, air freight and Rail Freight
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4. China Europe Railway, Benefits & Challenges
b y A l a n S o
Connect East and
West
In an efficient way
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5. China Europe Railway, Benefits & Challenges
b y A l a n S o
Chongqing was the top one in consecutive year from 2014, railway solution help a lot on the trading in Chongqing, for
those cities have block trains go to Europe, highlighted as below.
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GDP Growth in 2014-2016
List of GDP Growth 2014 List of GDP Growth 2015 List of GDP Growth 2016
Rank Cities Billion Change Rank Cities Billion Change Rank Cities Billion Change
1 Chongqing 1426 11% 1 Chongqing 1610 11% 1 Chongqing 1755 10.70%
2 Tianjin 1572 10% 2 Hangzhou 1010 11% 2 Hangzhou 1105 9.50%
3 Shenzhen 1552 10% 3 Changsha 860 9.70% 3 Shenzhen 1949 9.00%
4 Wuhan 1017 10% 4 Tianjin 1720 9.40% 4 Tianjin 1788 9.00%
5 Chengdu 1005 9% 5 Nanjin 960 9.20% 5 Guangzhou 1961 8.20%
6 Guangzhou 1670 9% 6 Shenzhen 1750 8.90% 6 Nanjin 1050 8.00%
7 Wuxi 873 8% 7 Wuhan 1100 8.80% 7 Qingtao 1001 7.90%
8 Suzhou 1350 8% 8 Guangzhou 1810 8.30% 8 Wuhan 1191 7.80%
9 Beijing 2133 7% 9 Qingtao 940 8.20% 9 Chengdu 1217 7.70%
10 Shanghai 2311 7% 10 Chengdu 1080 8% 10 Suzhou 1547 7.50%

6. China Europe Railway, Benefits & Challenges
b y A l a n S o
Number valid to 2018
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Number of Block Train
Year Number of Block trains Remarks
2011 Started Trial
2012 Less than 50 Under Trial
2013 80 increase 90%
2014 308 increase 285%
2015 815 increase 165%
2016 1702
increase 109% in total and
increase 116% for return
2017 3673 increase 116%
2018 3500 Forecast
2019 4000 Forecast
2020 5000 Forecast
0
1000
2000
3000
4000
5000
6000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
NUMBER OF BLOCK TRAINS

7. China Europe Railway, Benefits & Challenges
b y A l a n S o
With the China Europe railway…
• Provide a shorten transit time than sea freight
• Cheaper solution than air freight
• Help for inland factory and consumer while normally
inland transport always expensive
• Provide a logistics solution for a product for new market
• Shorten cycle time for financial benefit
• Environmental friendly
Benefits
For the trade, logistics and end
users
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8. China Europe Railway, Benefits & Challenges
b y A l a n S o
What China Europe railway
faces…
• Speed is key in railway, still need to shorten the time to
enhance the benefit for railway solution.
• Customs among different country now is not a big
problem, but need to make sure all the documents are
fit for railway requirement, still have few cases happen
in Poland and China.
• Route in Europe still not cover too much points, mainly
Duisburg and Hamburg (Madrid, Munich)
• Imbalance trade, cost for wagon and containers.
• Subsidy was the hot topic when we talked about China
Europe Railway. (Drop/Phase Out)
Challenges
Technology, customs, route, trade
balance and subsidy
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9. China Europe Railway, Benefits & Challenges
b y A l a n S o
FROM THE EUROPEAN PERSPECTIVE
• Customs
Documents
Communicatio
n
 X-Ray in
Poland
• Routes
Infrastructure
(Terminal/Cont
ainer)
Trade support
Truck subsidy
Cooperation
between
platforms ?
• Imbalance
Trade
Container/wag
on
More
eastbound ?
Cooperation
between
platforms ?
Reefer
container
• Subsidy
Last for ?
Provincial
government
suffer ?
What is
healthy ?
Concern from
European.
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Open discussion on the challenges
• Speed
Infrastructure
(terminal and
railway track)
Change gauge
Management
in peak time
Weather
10 days ?

10. China Europe Railway, Benefits & Challenges
b y A l a n S o
European
Perspective
Hesitation ?
• Not widely to use ? Price ? Service ?
• LC boundary ?
• Habit ? Culture ?
• No idea about inland service in China ?
• Have solution from service provider ?
• Concern the cost is high from logistics perspective but
no from financial perspective ?
• Subsidy ? Drop or phase out ?
• Case sharing on example, OEM, European railway
operator
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11. China Europe Railway, Benefits & Challenges
b y A l a n S o
• Provincial government
• Railway platform company
• National railway operator
• Container leasing company
• Railway terminal (international)
• Service provider (GPS or other equipment)
• Customers
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Technology
Sharing of Data

12. China Europe Railway, Benefits & Challenges
b y A l a n S o
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Chongqing, 814 (14 Aug 2014), Mercedes, BMW and Volvo
Benefit to
Eastbound
• Eastbound
• Supported by
Chongqing
provincial
government
• Start of finished
vehicle customs
entry

13. China Europe Railway, Benefits & Challenges
b y A l a n S o
CARs in Container
Professional Finished Vehicle Logistics
Service Provider
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CFR RINKENS LLC Business Entity
 3PL formed in 1994
 200 Employees
 Forwarding, Warehousing, Trucking
Head Offices
 Los Angeles, USA
 Bremen, Germany
 Chongqing, China
CFR Compounds & Offices
Los Angeles, Oakland, Houston, Miami, New York,
Bremen (Germany), Chongqing (China)

14. China Europe Railway, Benefits & Challenges
b y A l a n S o
BY Railway from Germany to China
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Finished Vehicle Tender Case sharing
• 8,000-10,000 Cars per year with 5
years contract
• Using railway moving the cars from
Germany to Western Part of China,
change from sea freight
• Price has to be competitive
• Lead time has to be competitive
• Using block train preferable
• Has to fulfil the requirement in the
peak time
• Empty container provided at origin

15. China Europe Railway, Benefits & Challenges
b y A l a n S o
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Suggestions against hesitation ?
• In view there is some challenges, any action ?
What we might can do
• Cooperation between platforms
• More professional promotion in Europe
• Connect with more shipping line on container
management in order to lower the container cost
• Speed up the transit time
• Discuss with trader on the incoterm
• Discussion with provincial government on subsidy
The Belt and Road Initiative development
• Supervise by China Railway with all the platforms ?
• Take the lead to have more professional road show in
Europe ?
• Talk with the big trader on this logistics solution ?
• Coordinate with all national railway company ?
• Trade Balance ?
• Speed ? 10 days ?

16. China Europe Railway, Benefits & Challenges
b y A l a n S o
China’s high-speed rail vision
Connect all over the World
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17. Thank You
Alan So
+86 138 0889 5545
Alan.so@cfrrinkens.com.cn
www.cfrrinkens.com