Penang City Zone Express (CZE)-based transport and logistics company has launched road freight service between Malaysia and Europe.
Fed up with delays and capacity shortages in transporting containers on the road, CZE deployed its fleet of 150 trucks as an inland alternative, connecting to Europe via Chongqing, China.
Managing Director Raj Selvarajoo said CZE already transports around 500 containers a month between Shenzhen and Hong Kong to Southeast Asia, where it has offices in Malaysia, Singapore, Thailand, Vietnam, Laos and in Myanmar.
“After the trade war, the pandemic, the Suez lockdown and container shortages, we decided to push the service further,” he said. The Loadstar.
CZE’s truck service departs from Chongqing, crosses the border at Alashankou, before transiting from Kazakhstan and Russia to Germany.
Mr Raj said the delivery time was around 28 days and although the freight rate by road was 20-30% higher than by sea, the speed and reliability more than made up for the additional cost.
“Sea freight is a big mess and air freight is way too expensive,” he noted.
Trucking from China to Europe gained momentum last year when Covid began to seriously impact supply chains and it became clear that container shipping networks could not coping with the surge in volumes linked to blockages.
Major players such as DHL, Ceva and DSV have all noted the potential for using a China-Europe road freight land bridge, easing the pressure on rail.
However, trucking routes have also had their problems, given Covid testing for drivers and extra customs checks, which Mr Raj said could sometimes cause traffic jams and delays, especially at Chinese border crossings.
CZE offers the service to and from Southeast Asia, but until now the bulk of the demand has been for German exports of raw materials and electronic components used for manufacturing in Malaysia.
Mr. Raj says one customer carries lithium batteries, which he sees as a big opportunity for future growth.
“Batteries for electric vehicles have enormous potential for ground transportation, and not just as an interim solution, given the cost and time advantages,” he explained.
Meanwhile, with Malaysia still under control, Mr Raj said there had not been too much of an impact on cargo operations so far. However, manufacturing output in some areas has fallen by 80% due to the restrictions, with the main effect being an increase in demand for warehousing.