Structural elements from three continents

All in all, the Militzer & Münch Group transports almost 190 containers laden with parts for a paper machine to Russia. The German and the Chinese Militzer & Münch organizations are involved in the multimodal transports. The challenging project will be finalized in this summer. 

The Republic of Karelia lies in the Northwest of the Russian Federation. In Segezha, a town of 30,000, a paper mill is being modernized and equipped with anew paper machine. Paper and cardboard are, alongside wood and metals, the main exports of the region. The majority of the parts for the machine come from the Voith Group. Voith St. Petersburg assembles the paper machine in cooperation with the end customer. For the transportation of the machine parts, Voith commissioned, among others, Militzer & Münch.

Complete imports from China and Brazil

Once assembled, the paper machine measures 130 meters in length and 10.5 meters in width. It consists of numerous parts. Militzer & Münch is responsible for the entire imports from China and Brazil to Germany and for the container exports via sea from Germany to Russia. In September 2016 Militzer & Münch began dispatching the first ocean transports of components from Brazil and China to Germany using leasing containers.

First sea shipments from Hamburg to St. Petersburg are planned for April. The goods are then on-forwarded from St. Petersburg to Segezha via road.

 

“The good cooperation and intensive communication between the Militzer & Münch teams in China and Germany have allowed the project to proceed smoothly.”

Thomas Czojor
Manager Militzer & Münch Air & Sea branch Hamburg

 

Different containers used

A planning phase of several weeks preceded the project. “Together with our suppliers, we have to individually adapt the transport mode for each single delivery”, says Thomas Czojor, Manager of the Militzer & Münch Air & Sea branch Hamburg. “For example, many calender rolls for the machine come from China. We transported them to Hamburg with open top containers.”  Apart from open top containers, Militzer & Münch also uses high cube and flat rack containers for this order (cf. box), plus one out-of-gauge box.

The oversize box, measuring 3.45 meters in length, 3.33 meters in width, 4.20 meters in height and weighing 19 tons, had a very long journey. “Due to its height, this break bulk load was a special challenge”, says Thomas Czojor. “We delivered it from Shanghai via Antwerp in a special transport to the customer’s plant in Heidenheim, Germany.” The component for the paper machine will now be transported to Russia on a truck.

 

Customs know-how is a must

Apart from the transport per se, Militzer & Münch is also responsible for part of the customs clearance. “We did the export clearance in Brazil and China, the import clearance in Germany and the export clearance for Russia”, says Thomas Czojor. The import customs clearance in Russia is done by the end customer’s customs broker.

So far, the entire project has been handled to the fullest satisfaction of the customer. “The good cooperation and intensive communication between the Militzer & Münch teams in China and Germany have allowed the project to proceed smoothly”, says Thomas Czojor. The customer has already placed new enquiries with Militzer & Münch; they are being worked on.

 

Karelia

Karelia is located in Europe’s Northeast, between the Baltic Sea and the White Sea. The entire region covers an area of about 200,000 square kilometers. 85 percent of the area is Russian territory: that’s the Republic of Karelia with a population of 700,000. About 30,000 square kilometers belong to Finland; the Finnish part counts 400,000 inhabitants.

 

The Russian part of Karelia is governed as an autonomous republic within the Russian Federation with regional legislation and its own constitution. Among the main export goods are treated and untreated wood, but also paper and cardboard. The major trade partners are Finland, Germany, the USA and Great Britain.

 

The paper machine

As far back as 2,000 years ago, the Chinese knew a method to produce paper. In Europe, paper wasn’t produced until a thousand years later. Before the industrial revolution, it had to be made by hand.  At that time, paper was a precious and expensive raw material.

In 1789, Frenchman Nicholas-Louis Robert invented a machine that produced continuous paper instead of one sheet at a time – a cost-efficient and fast method of papermaking. With this invention, the product became accessible to the public at large.

Some years later, British paper merchants Henry and Sealy Fourdrinier added yet another essential improvement to Robert’s invention with the help of engineer Bryan Donkin. They developed a machine where all the processes follow one after the other without an attendant having to interfere.

The basic principle of the paper making machine has not at all changed since: Cellulose fibers from plants are diluted in water to pulp. A sieve separates the fibers and water; the crude paper or web is formed. The remaining humidity is extracted from the paper sheet via pressure and heat. In the final calendering process, the paper is smoothed.

Today, paper machines produce about 1,800 meters of paper per minute. The quantity produced by a modern paper machine in one hour surpasses the annual quantity a machine was able to manufacture in the 19th century.

 

What containers were used by Militzer & Münch in this project?

 

For lightweight and voluminous goods, high cube containers are the preferred choice. They are about 30 centimeters higher than standard 40-foot containers, allowing for higher piles of palettes. A 40-foot box measures 12.03 meters in length, 2.35 in width and 2.68 in height.

 

Open top containers are mostly used for higher shipments. They can be loaded from the top by crane, if loading through container doors is impossible. Open top containers can be closed with a removable tarpaulin. The 40-foot containers measure 12.03 meters by 2.35 by 2.38.

 

For out-of-gauge or voluminous cargo, a flat rack container is used. Boxes that are larger than a closed container can be loaded onto such containers. The cargo is safely secured with posts and lashing straps according to legal requirements. A 40-foot container measures 12.05 meters by 2.44 by 2.26.

The exciting Silk Road revival

China is well versed in mammoth projects. What the Chinese accomplished several centuries ago with the Great Wall is to be repeated in a similar way now. A gigantic investment package has been dedicated to the improvement of the transport network between Asia and Europe. Benefiting from the opportunities this entails, Militzer & Münch is developing new locations and road transport services in China and Central Asia. In some of the countries Militzer & Münch has already been operating for over 20 years.

The project to revive the Silk Road runs under the name One Belt, One Road (OBOR). For OBOR, China has set aside more than 100 billion dollars for the coming years. With this initiative – for the Chinese government, part economic and part political strategy – the Silk Road, which goes back to 2,100 years ago, is gaining importance again for today’s global transports. In ancient times, the route was already used for the goods trade between China and Europe. Yet it was not, as the name suggests, just one road strictly speaking, rather than a network of paths, major roads and secondary roads. They traversed countries that today are known as China, India, Pakistan, Afghanistan, Tajikistan, Kyrgyzstan, Turkmenistan, Uzbekistan and Turkey.

At that time, selling, forwarding and exchanging goods could take several years. Today, goods can be shipped from one continent to the other in just under 15 days. In ancient times, camels were the means of transport for overland transportation. Nowadays, they have been replaced by trucks and trains. An essential component of the OBOR initiative is the development of infrastructure. It comprises railway lines, roads, pipelines and deep sea ports. Moreover, huge industrial complexes are being built along the Silk Road, in China as well as in Central Asia.

In the Central Asian countries and in the Trans-Caucasian region, Militzer & Münch employs a staff of 200 – in China, the number of employees is 100. Militzer & Münch has a strong presence in China with seven operating branch offices, especially the longstanding branch office in Urumqi is an optimal gate for transports to Kazakhstan and Uzbekistan. The company aims at further reinforcing its presence in China and Central Asia as well as intensifying the traffics between the regions.

Bulking up business in China

By appointing new specialists to the management team, Militzer & Münch China took the first step towards expanding business along the New Silk Road. In September 2016 Glenn Bai was appointed Managing Director of the Chinese Militzer & Münch organization. At the beginning of the year, new colleagues were taken on board. Among them, industry experts Eric Wang, Director Rail Freight China, and Philip Wang, Director North China.

To further support the team, Militzer & Münch China hired Trade Lane Sales Manager Anna Boro in February. The focus of the Russian-born expert is set on the development of business between China, Russia and Central Asia along the Silk Road.

A new product has already been realized on the route from China to Central Asia: A container block train connects Xuzhou in Eastern China and the capital of Uzbekistan, Tashkent. For an industrial project, three transports were handled from China to Uzbekistan in January and February. The block trains carried steel coils in 20-foot -containers. Each transport only took 10 to 12 days from Xuzhou in the Jiangsu Province to Tashkent. On these orders, Militzer & Münch cooperated closely with sister company InterRail. Last year alone, InterRail operated approximately 280 trains from China to Europe along the New Silk Road.

“The One Belt, One Road initiative and the large sums invested in this context, we can expect to see numerous infrastructure projects in and around Central Asia”, says Glenn Bai. “We will take advantage of the opportunities to exploit the full potential of this highly promising market. Therefore we will cooperate with the Militzer & Münch organizations in Central Asia.”

The Silk Road Fund

About a year ago, China, as the world’s second largest economy, founded the Asian Infrastructure Investment Bank (AIIB), and a Silk Road Fund to boost infrastructure in Asia. China contributed 40 billion US dollars to the Silk Road Fund, and 50 billion to AIIB as seed capital. The other member nations also increased the financial means of the bank. Germany for instance contributed 4.5 billion US dollars.

Countries and projects

Militzer & Münch is one of the leading transport and forwarding service providers in Central Asia with locations in Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan. On February 1, Militzer & Münch set up a presence in Azerbaijan, too: A two-man delegation now handles local business. The market has good potential, mainly in standard transport business.

In Tajikistan, Militzer & Münch recently won two big projects. One is a long-term contract that comprises the delivery of the merchandise for a bed and furniture chain with six or more truckloads per month. In the initial phase in December and January, Militzer & Münch Tajikistan handled 17 road transports from Poland to Tajikistan.

The second project is for a hydropower station for which Militzer & Münch transports components. The water power dam is being built on the River Vakhsh that crosses Tajikistan from North to Southwest – it constitutes an important energy source for the country. Militzer & Münch will transport about 180 to 200 truckloads to Tajikistan, 30 of which with an over height of 3.4 meters (cf. “News in brief” in the PROJECTS section.)

In Kazakhstan, the economic situation is turning back to normal after the devaluation of the Kazakh tenge. “The market has become stable again and Militzer & Münch profits from the fact that transports are slowly increasing”, says Nikolaus Kohler, Regional Managing Director Middle East / Central Asia. “We feel optimistic that, especially after the World’s Fair Expo 2017 in Kazakhstan, project business will gather speed again.” In view of big Chinese e-commerce companies, which also count the inhabitants of Kazakhstan among their customers, the B2B business sector is growing. With its own CEP service in Kazakhstan, Militzer & Münch is optimally positioned for a growing number of shipments in this segment.

The logistics industry looks to Uzbekistan with optimism, too. Although owing to currency regulations, so far there has been scarcely any security for foreign investors. One can assume that new paths are opening up for the country under the leadership of the new President who was voted into office in December 2016. “Our hope is for the currently existing capital constraints to be relaxed step by step, which again would pave the way for investments”, says Nikolaus Kohler.

Overland transports save time and money

The Chinese government has already convinced more than 60 countries of its OBOR project. The overland route boasts two clear advantages over sea and air transport: Shipments by train take about 20 days less than by vessel and are much cheaper than by plane.

While precious fabrics, porcelain and oriental spices were transported along the old Silk Road, the New Silk Road is meant for the transport of electronics, branded products, automotive parts, textiles and many more goods. At this time, there are ten departures a week for the full container loads that Militzer & Münch and InterRail are transporting via rail from China to Europe and vice versa.

Projects along the Silk Road

  • Azerbaijan: A natural gas pipeline is to run from Azerbaijan through Turkey to Europe. The 2,000 kilometer pipeline, planned by the “Trans-Anatolian Natural Gas Pipeline (TANAP) Project”, is under construction.
  • Tajikistan: The improvement of the border road from Dushanbe in Tajikistan to Uzbekistan is under way.
  • Pakistan: To improve the connection between Central Asia and the ports of Gwadar and Karachi, the Shorkot-Khanewal motorway section is being completed to become a four-lane wide and 64-kilometer long road. The project is to help guarantee efficiency and safety in the transport corridor.

InterRail – business prospects

InterRail – a company specialized in rail freight and a Militzer & Münch sister company under the umbrella of the TransInvest Group – has defined three important trade routes for its business activities:

  • Along the East-West axis, InterRail aims to become one of the most successful booking agents.
  • Along the so-called “Old Silk Road”, the China-Central Asia-corridor, the pioneer test trains are to be expanded into regular train connections.
  • The same goes for the North-South corridor, where additionally, regular block train traffics are to be set up.

InterRail added diverse new products and routes to its portfolio, especially during the past 24 months. They include open trains to be loaded with single containers or container groups, but also LCL traffics from China to Europe and special wagon transports between Russia and Central Asia. In terms of geography, InterRail introduced new train connections, for instance from China to Afghanistan, the CIS, Latvia and recently also to the United Kingdom.