Interview – Mr. Hans Reinhard, Chairman of InterRail Group

New Silkroad Discovery: 2020, the outbreak of the epidemic (Corona-19) has given new opportunities for international rail transport. In the first half of 2020, the number of China-European trains increased by 36% year-on-year. You must have felt this change, what has your company achieved in the field of China-EU rail freight this year?

Mr. Hans Reinhard: As the China-Europe trains are considered as a complementary to air and sea freight, and as the airfreight sector were hit the most during the last months, we indeed observed an increasing demand on the China-EU tradelane since China’s return to production.

Where as China was the first country hit by the pandemic, it originally was also the first country to (suddenly) reduce the numbers of trains thus the start in 2020 was extremely slow – then China re-started once the pandemic became controlled in China but at same time, COVID brought Westeurope into complete lockdown thus again March and April were very slow months as far as train departures between China and Europe were concerned.

As of May however, we could feel an increasing demand which even included regular blocktrains of postal shipments and since May, the numbers of trains has permanently increased reaching the peak in June/July. InterRail could face an increase of about 35% compared to figures of same period in 2019 were we operated approx 4 trains weekly.

New Silkroad Discovery: Could you please describe the markets that your company currently focuses on? What are your advantages compared to other European competitors?

Mr. Hans Reinhard: With rail-focused services, InterRail addresses customers across the entire Eurasian region respectively along the New Silk Road. To support its freight brokerage services, InterRail draws on its own container fleet, and in the CIS, on its own and leased rolling stock. As a neutral service provider, the group moreover operates container block trains between Western Europe, Russia, the other CIS countries, Central Asia and China. We also operate our own block trains and individual wagons within the CIS/Russia. In addition to container transportation, our competence also includes the transport of goods in conventional rail wagons, like project and bulk cargo (cotton/fertilizers).

Among InterRail customers are forwarding and transport companies as well as ocean carriers and shipping lines.

InterRail has direct contracts with all the national railways in the CIS (Commonwealth of Independent States) and is specialized on CIS transit. The service portfolio also comprises end-to-end freight rates, documentation management, pre- and on-carriage, tracking and container provision.

For the smooth transport of rail freight between Europe and Asia, it takes a partner that is at home in every culture. That’s the strength of InterRail, due to its presence of long years in all the major states along this trade lane, with locations in Belarus, China, Germany, India, Kazakhstan, Poland, Russia, Switzerland, Ukraine and Uzbekistan. We are on site at all critical interfaces with our own employees. As an affiliate of the TransInvest Group (St. Gallen, Switzerland), InterRail can additionally rely on the dense TransInvest network.

With the competent expertise of its staff and its long-time market presence, InterRail stands for top excellence in service.

New Silkroad Discovery: Last year you stated that the future growth of China-European shuttles would be significantly affected as the Chinese government subsidies are reduced year by year (to 30% in 2020 and 20% in 2021). Has this year’s outbreak of the epidemic changed many things, and how do you see the future growth of the China-EU rail freight?

Mr. Hans Reinhard: We believe that due to the pandemic, the reduction of the subsidies has not yet affected the number of train departures yet as there was a large backlog demand on different goods and commodities which the rail transport could benefit from. Secondly, the suboperators, ie. the state railways have positively supported this kind of transport by further reduction of their rates and tariffs to absorb part of the missing subsidizes, and secondly, by creating longer trains on CIS territory, ie linking 3 chinese trains into 2 CIS trains.

We however can also observe that some Chinese platforms have already started to focus more on shorter distances/destinations, ie mainly to Russia and Central Asia where less subsidies will be necessary.

On the long run, we still expect that present boom will not continue on long term base but volumes will stay solid on about 2019 average figures.

A further effect we can notice is the fact that due to less subsidies, the elbow fights between the different operators on rates and conditions have increased and the demand on intermediate financing by western operators has also increased.

New Silkroad Discovery: At the end of June and into July, there was a backlog of cargo and congestion in Alashankou, China, which led many Chinese shuttle companies to reduce their schedules and cancel some trips. Recently, there have been reports of congestion in Małaszewicze, Poland, and Bres, Belarus. Could you please introduce more about the relevant situation?

Mr. Hans Reinhard: The situation at Alashankou / Dostyk has meanwhile get partly relaxed again where as Brest/Malascewicze has indeed become a extremely troublesome interface which is due to huge volumes of trains but also due to present construction works on both sides. InterRail still benefits from using private railway undertaking thus we can offer our “own” wagons and traction where as some state railways are also focusing lack of empty wagons. We are afraid that the situation at Brest / Mala will not come to former quality within short thus new routings will certainly profit from present situation (other border crossings, intermodal solutions via Russian, Baltic or German ports etc).

New Silkroad Discovery: Finally, please reveal your company’s next business development plans. What can the market expect from InterRail in the next 2 to 3 year？

Mr. Hans Reinhard: InterRail is basically focusing on three corridors ie East/West, China – Europe,

but also Asia – Central Asia thus we want further growth and expand our existing blocktrain traffics via Vostochyn into Central Asia but at same increase the numbers of trains on Trans-China traffic from / to Central Asia.

Secondly, we are presently extending our services between Asia (mainly China) and Turkey, and last but not least, we want to further expand our already very strong position in the North/South corridor, ie to serve India and the CIS states.

To reach this targets, we shall further invest in own or leased rolling stock to be able to offer “one package deals” out of one hand.