The longest railway line in the world brings tons of products from China, but fails to fill up on the return trip.
The Chinese authorities spared no effort recently in Madrid to promote the project of the longest train in the world that was born with high hopes almost a year and a half ago but the Spanish side of things has still not been fulfilled. The 13,000 kilometre line connects Madrid with Yiwu, the world’s largest supermarket from which products from China’s bazaars are shipped and aims to serve as a land alternative to shipping. It traverses China, Kazakhstan, Russia, Belarus, Poland, Germany, France and Spain and draws a new silk route, of strategic importance for China. It was the current president, Mariano Rajoy, who during an official visit to Beijing sealed the agreement with his counterpart Xi Jinping with the idea of boosting Spanish exports.
Since the opening at Abroñigal station at the end of 2014, 39 trains loaded from China have arrived in Madrid and only eight have returned, according to Timex, the company that manages the freight. Transporting goods by rail is faster (21 days) than by boat (35-40 days), but it is also more expensive. A train container can cost about 2,000 euros; a shipping container oscillates around the 1,300 euros. The price puts off some Spanish companies, along with lack of knowledge and confidence. Mao Wenjin, president of the Foundation for Exchange between Yiwu and Spain explained that “it is necessary to settle some legal matters such as permits to export ham with bone or the transit of food through Russia”
Santiago Vivanco, president of the winery Vivanco has exported red wine to China by train three times. He is compensated because they sell in the Zheijang province, where Yiwu is located. Arriving at the port of Shanghai, overcoming the customs formalities and transporting the merchandise would mean more time and money. Vivanco thinks it is “a problem of mistrust. In Spain people use trains very little to transport goods; Nor does it occur to them. “ Many wagons are filled during the journey, in northern Europe. “If Germany was not at a strategic point, this train would not be viable,” he estimated.
From China arrives Christmas products, stationery, tupperware, cutlery, everything. China mainly receives wine, oil and sparkling water. The Secretary of State for Trade, Jaime García-Legaz, explained that the train could be especially beneficial for fresh food products such as grapes or fruit that can be refrigerated on the train. He considers that the project at the moment works and that it is normal that more merchandise arrives than leaves due to the asymmetry of the commercial relations with China.
Sheng Qiuping a representative of the Communist Party said in Madrid that the thirst for Spanish products in China is huge despite the slowdown in the Asian economy. “In the next five years we are going to dedicate ourselves to promote the importation of Spanish products, “he explained. The idea is that from Yiwu imported products are distributed throughout China. He also explained that they plan to build a Spanish town in Yiwu to promote Spanish commerce. Business life in Yiwu is outstanding. As Mao explained during the presentation in Madrid, if a person spent eight hours a day buying for three minutes in each Yiwu store, it would take more than a year to visit all the shops in this southern Chinese city with a GDP that represents 8% of all Portugal and that receives ten million merchants a year.
The Administration is aware of the need to disseminate the project and from the ICEX they organize seminars to make the project known to the entrepreneurs. “From the outset, the Yiwu-Madrid rail line has been supported and we are confident that it will be consolidated, in particular in the direction of Spain’s return to China, as an additional logistics option for Spain’s exporting companies,” explained Francisco Javier Garzón, CEO of ICEX.
Hermanos Rubio is another of the 15 companies that have dared to use the train with two shipments of red wine. The first was in winter and they had to wrap the container in thermal blankets to protect the goods from the Russian cold, but outside of these dates they don’t need protection. “I learned about the train on television, but it was our customer who decided on this transport,” explained José Agustín Rubio, export manager of this family business. The customer is called Mao and his company distributes Spanish goods in China. “It is true that the price is expensive, but for the Chinese Government this train is a priority. If we take the goods by train, the government guarantees us free publicity on state television. “