LCL via rail from China to EU

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1 5 star Logistics via rail from China to EU Grzegorz Zdybel DB Schenker Poland RLF East

2 services services from China to Europe Deconsolidation and clearance of cargo at Malaszewicze Malaszewicze Rail On-carriage Truck Less than Container Load features: Door-to-door lead time: days Frequency: weekly service Consolidation in warehouse Chengdu and Shanghai EXW or FOB incoterms Pre carriage in CN on request Deconsolidation in Malaszewicze and export to Europe Delivery to any location in Europe Dedicated groupage service Multi-customer groupage service

3 services Deconsolidation and on-carriage through groupage network ex Poland into Europe DK NO SE FI LT EE IE GB NL LV Export groupage line CH BE DE FR Malaszewicze BY RU 5 dep per week 4 dep per week 3 dep per week 2 dep per week 1 dep per week PT ES UA CZ AT SK IT SI RO BG GR HU ASIA HR RS BA YU TR

4 FCL services Distribution options from Malaszewicze gain of time! Transshipment under customs inspection (Malaszewicze, Warsaw, Lodz, Krakow, Poznan, Wroclaw) Rail and truck services: container trucking, standard trucks, box trucks, high value goods (FTL, LTL, FCL, ) T1 Additional cargo insurance Full process by DB Schenker PL/BY border transit every 2hours Daily groupage truck departure to EU Shorter Transit Time: Delivery within 24h Delivery within 48h Delivery within 72h

5 services Distribution options from Malaszewicze shipments Precise delivery time at: -> scheduling SE FI FI NO SE FI NO 1-2 days 2-3 days 3-4 days 4-5 days 5-6 days 6-7 days 7 days 8 days & more PT ES ES IE GB GB FR FR BE NL CH DK DE IT IT SE EE LV LT BY PL CZ UA AT SK HU MD SI HR RO BA RS BG MK IT AL RU GR TR Anticipated delivery time out ouf European Union means delivery to Customs Office

6 Warehouse in Malaszewicze Warehouse security: Warehouse located in Free Customs Zone (24h/7 service) Free Customs Zone fully surrounded by security fence, with regular security patrols Security post located at the entrance to Free Customs Zone Security post located at the entrance to warehousing area Entry to the area only possible with authorization Check-in and check-out of all arriving and departing trucks by the security personnel at control posts DBSL Poland employee and DB customs agent present during transhipment 6

7 Warehouse in Malaszewicze RAILWAY CAPACITY 2 levels ramp adjusted to Russian wagons 3 trains to Russia loaded simultaneously 1154m of European (1435 mm) and 1257m Russian (1520 mm) standard / railway gauge (to be extended) 7 block trains / week dispatch

8 Warehouse in Malaszewicze BASIC INFORMATION 800 containers (yard capacity) 2 own reachstackers 1 own locomotive Surface: sett and asphalt Capacity TEU per year Loading/unloading 1 Russian block train and 2 European block trains simultaneously Double deck loading/unloading ramp for Russians wagons Capacity 70 car wagons per day Cooperation with national railways RUS, PL, BY

9 Warehouse in Malaszewicze Warehouse of 8000 sq.m. Services: lifting on/off truck wagon & v.v. wagon wagon stuffing & unstuffing palletizing & foiling distribution individual logistics solutions free customs zone complexity of documentation CCTV High Value goods transshipment

10 Convoy from PL/BY boarder to final customs clearance Convoy Only trusted carriers selected to provide trucking service PL/BY boarder crossing - starting point of mandatory armed truck convoy for high-value cargo Mandatory convoy organized by BY customs office Trucks guarded to final customs clearance in Russia Convoy is a car with armed customs agents following trucks

11 DB SCHENKER security product DB SCHENKERsmartbox provides full visibility Audited Security Concept 24/7 Monitoring & Intervention Monitored in real-time Door Movement Temperature Humidity Tilt Impact (Shock) Light Vibration

12 DB SCHENKER security product DB SCHENKERsmartbox we are offering our proven security product option DB SCHENKERsmartbox GPS Real Time Monitoring DB Schenker offers a proven and unique door-to-door security concept: Originally developed for Ocean Freight, but now also applied for rail logistics DB SCHENKERsmartbox offers: 24/7 Container monitoring along the complete rail route Highest level of transparency of the supply chain Real-time alert system Rapid response in case of open door alerts by local railway units and police

13 services Basic documentation required Commercial invoice received from the Company in China Packing List CE Certificate (electronics) Certificate of origin (clothes, textiles) Manuals (occasionally) To avoid phytosanitary inspection only fumigated pallets to be used

14 In fact we are twice as expensive as Sea freight but therefor double as fast. Air freight is faster but four times more expensive. Example: Freight & Capital Cost for High Value Goods Chengdu-Berlin door-door 1) 51,918 1,918 50,000 22,872 15,342 7,500 18,671 7,671 Capital cost 11,000 Freight Rail is the cheapest option among the 3 transport modes, if freight and capital cost are considered Rail is superior to ocean. Whether rail or air should be used depends on time-cost preferences Air 5 days Ocean 40 days Rail 20 days 1) USD/Container; 7% capital cost; 1 Container = 10,000kg, 2.0 Mio USD value of goods

15 After adjusting for capital cost savings and time benefits rail can be cheaper than ocean Calculation scheme to make prices for Rail and Ocean freight comparable?? The adjusted Rail Freight will be higher or lower than Ocean Freight depending on cargo value and customer time preference Price Rail Freight Capital Cost Saving Time-to-market Adjusted Advantage Price Rail Freight Price Ocean Freight Capital Cost Savings Transported cargo is inventory that must be financed and therefore generates capital cost Especially for high value cargo capital cost can be substantial Time Benefits Market opportunities might be lost to competitors (lost sales) if goods arrive late Production might be negatively affected or even stopped if urgently needed input parts arrive late

16 Green Logistics: Apart from economic advantages Rail offers the most environmentally friendly transport mode We split carbon dioxide-emissions from transport growth CO 2 emission example: Door-to-Door transport from Chongqing to Duisburg Transport growth CO 2 emissions kg CO 2 / ton Source: GSL Rail Ocean Ocean +Air Source: Eco Transit tool DB Schenker Air From an environmental perspective Rail transport is the preferred choice for shipments between China and Europe Rail is not only the most ecological mode of transport in terms of CO2 emission but also regarding other pollutants 1) Rail service between China and Europe makes sense from an environmental as well as a business perspective 1) e.g. PM (particulate matter), NMHC (non-methane hydro carbons), SO2 (sulphur dioxide), NOx (nitrogen oxide)

17 services Consolidation methods 1 MULTILATERAL CONSOLIDATION OF PRODUCT SHIPPER 1 CONSOLIDATION POINT RECEIVER 1 SHIPPER 2 FCL RECEIVER 2 CONSOLIDATION POINT SHIPPER 3 RECEIVER 3

18 services Consolidation methods 2 CONSOLODAITION FOR RECEIVER SHIPPER 1 CONSOLIDATION POINT RECEIVER FCL SHIPPER 2 FCL SHIPPER 3

19 services Consolidation methods 3 DECONSOLIDATION FOR RECEIVERS RECEIVER 1 SHIPPER FCL FCL RECEIVER 2 DECONSOLIDATION POINT RECEIVER 3

20 services Diagram of the pallets in container 20 DV 10 palet (1,20x1,00m) 40 DV 21 palet (1,20x1,00m) 20 DV 11 palet (1,20x0,80m) 40 DV 24 palet (1,20x0,80m)

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