Hyundai Glovis Connects China-Europe Logistics Iron Silk Road... First Domestic Logistics Company to Establish Specialized Corporation

Securing Over 400 Automotive Clients and IT·Electronics Companies
Leveraging Affordable Transport to Dominate Eurasian Rail Logistics

[Asia Economy Reporter Dongwoo Lee] Hyundai Glovis is establishing a railway transportation corporation in Chengdu (成都), the largest economic city in western China, to expand its logistics business between China and Europe.

On the 29th, Hyundai Glovis announced the establishment of "Chengdu Glovis SCM Co., Ltd." to lead the Eurasian railway logistics market. This is the first time a domestic logistics company has independently established a corporation specializing in railway logistics business in China.

The company expects this corporation to serve as a foothold for business expansion. Hyundai Glovis noted that export and import volumes via the Trans-China Railway (TCR) are rapidly increasing due to the economic revitalization of Chengdu.

The TCR is a railway line connecting various parts of China such as Chengdu, Xi'an, and Chongqing to European regions through countries of the Commonwealth of Independent States, including Kazakhstan and Russia. The volume of TCR shipments from Chengdu to Europe increased from 82,000 FEU (1 FEU = one 40-foot container) in 2019, before the COVID-19 outbreak, to 123,000 FEU last year. As of last year, Chengdu ranked second in China with about 2,800 TCR departures annually, establishing itself as a railway transportation hub.

Through the corporation, Hyundai Glovis plans to operate block trains (express freight trains) with China's state-owned railway operators, secure a logistics base for export and import of finished vehicles in inland China, and expand W&D (Warehousing & Delivery) business utilizing infrastructure. Initially, it plans to participate in the operation of block trains departing from Chengdu and engage in forwarding sales targeting large global shippers.

Leveraging its automotive logistics expertise, Hyundai Glovis intends to focus sales efforts on over 400 finished vehicle and auto parts companies located in Sichuan Province, where Chengdu is situated, as well as on non-affiliated container cargo moving between Europe and China, including electronics, chemical products, parts, machinery, and equipment.

Synergies with Adampol, acquired by Hyundai Glovis' European subsidiary in 2014, are also anticipated. Adampol operates a train terminal equipped with a railway freight transshipment system in Malaszewicze near the eastern border of Poland.

This is expected to be advantageous for shippers in terms of cost reduction and schedule management. Due to the difference in rail gauge between China and Europe, cargo must be transshipped at the Kazakhstan border and again upon entering Europe. If trains operated by Hyundai Glovis' Chengdu corporation exclusively use Adampol's Malaszewicze transshipment system when crossing the European border, the logistics area is expected to expand to Western Europe, including Poland, Germany, and the United Kingdom.

The company anticipates that the Chengdu TCR corporation will have high competitiveness as rail transport has emerged as an alternative for European logistics amid the recent surge in ocean freight rates caused by the COVID-19 pandemic. A Hyundai Glovis official stated, "With the establishment of the Chengdu corporation as a starting point, we will expand the scope of China-Europe railway logistics and lead the Eurasian logistics market."

This content was produced with the assistance of AI translation services.