Hyundai Glovis, a logistics unit of Hyundai Motor Group, said it will set up a railroad cargo company in Chengdu, the largest trade center in western China, to expand its logistics business between China and Europe.
This is the first time for a Korean logistics company to establish a railroad logistics business in China.
The company’s strategy for its local business named Chengdu Glovis SCM is to operate the express freight trains of China’s state-run railway operators based on the capital of Sichuan Province and secure a logistics base for import and export of finished vehicles in mainland China.
TCR is a railway route that connects from Chengdu, Xi`an, Chongqing, and other parts of China to European regions via CIS countries such as Kazakhstan and Russia. Chengdu is a railway transportation hub with the second highest number of TCR departures (2,800 times) in China as of 2020. TCR shipments from Chengdu to Europe increased from 82,000 forty-foot equivalent units (FEUs) in 2019 to 123,000 FEUs in 2020.
Hyundai Glovis plans to conduct business by participating in the operation of express freight trains departing from Chengdu. Express freight trains are faster than sea transport and cheaper than air transport.
Among Chengdu`s European TCR customers, there are many global manufacturers of electronics and semiconductors. The company also will target Chinese automakers as there are more than 400 finished car and auto parts companies in Sichuan Province.