Forbes Asia August 2017

AUGUST 2017 FORBES ASIA | 77

FORBES ASIA

LUXURY GOODS

Bordeaux to Yiwu

How European wine is now going to China on Silk Road trains.

T

he first direct-rail shipment of

European wine has success-

fully crossed the expanse of

Eurasia and arrived in China,

opening up a new way for the

wine producers of Europe to get their bot-

tles onto the tables of the world’s fastest-

growing market for wine consumption.

This first shipment of European wine

by rail to China was ultimately a test con-

ducted by JF Hillebrand, a freight forward-

er that focuses on alcoholic beverages, and

Groupe InterRail, an operator of contain-

er block trains between Europe and Asia,

to determine if the wine could be securely

transported without damaging the product

or its packaging. The train departed on May

5 from Duisburg, Germany, and arrived in

the Chinese city of Yiwu 28 days later, tra-

versing six countries and 11,400 kilometers

in 8 fewer days than it takes to get between

these two points by sea.

One of the main challenges for ship-

ping a sensitive product like wine by rail

across Eurasia has to do with climate. Cen-

tral Asia is prone to extreme weather fluctu-

ations, and containers moving across such

open expanses are prone to heating up like a

closed car on a hot summer day or freezing

solid, depending on the season. So this ini-

tial test shipment had its temperature moni-

tored throughout the journey, to ensure that

the wine was becoming neither too hot nor

too cold.

Researchers had found that in the mid-

dle of May, the temperature outside a typi-

cal container throughout the journey var-

ied from 6°C to 35°C, while on the inside it

ranged from –2°C to 58°C. Wine cannot be

successfully shipped at these temperatures.

However, the containers that JF Hillebrand

and Groupe In-

terRail used were

equipped with a

special foil liner,

called VinLiner,

which regulates

the temperature

and humidity of

the contents in-

side. It worked,

keeping the tem-

perature inside the

liner between 9°C

and 32°C and the

temperature of the

liquid in the bot-

tles at a comfortable 25°C to 29°C.

The result: no damage to either the wine

or the packaging. Success.

However, the foil liner that was used for

this shipment can only be reasonably uti-

lized for wine shipments in the spring and

the autumn. For year-round service, Euro-

pean wine producers would need to rely on

temperature-controlled reefer containers —

such as those made by Unit 45.

Another thing that JF Hillebrand and

Groupe InterRail were monitoring in

this test shipment was how much force

the bottles of wine would be subjected to

along the 11,000-plus kilometers to Chi-

na—a trip that would require two rail-

gauge transfers and use tracks of varying

quality. They found that the maximum

force exerted on the containers was in the

ballpark of 2Gs—about the same as a roll-

er coaster. This was attributed to poorly

constructed rail lines in Kazakhstan and

China, but it ultimately had no adverse

impact on the shipment, as the bottles

were packed with adequate protection.

Initially received with much skepticism,

the first trans-Eurasian rail routes went into

regular service in 2012, primarily serving as

a way for Western electronics manufactur-

ers to get their Asian-made products to Eu-

rope. Since then, with the political and eco-

nomic support of Beijing, a full-fledged,

40-lines-plus network has emerged, which

links more than 15 cities in Europe with 20

cities in China, with cargo volumes dou-

bling each year.

The advantages of shipping by rail be-

tween China and Europe are straightfor-

ward: It’s a way of getting products across

Eurasia that can be twice as fast as ship-

ping by sea and at a mere fraction the cost of

shipping by air. The return trip from Europe

to China is also heavily subsidized, mak-

ing the cost of shipping a container over this

route by rail roughly the same as the cost to

have sent it by sea five or six years ago.

Wine is optimally suited to be shipped

on these trans-Eurasian trains. It’s a high-

value product that the Chinese are now

consuming in ever growing amounts that

could benefit from a more direct and

speedier journey to market but is too heavy

and bulky to be viably ship by air.

“This solution complements sea freight

and air freight; it is by no means a replace-

ment to these solutions,” explained Jannson

Chan, JF Hillebrand’s director for China.

“However, given the current difficult con-

text for shipping lines—instability, unavail-

ability, increasing prices—it not only means

more options for big European winemakers

but also for Chinese importers.” F

Customs officers in Yiwu, China, check shipment of European wine.

XINHUA/SIPA USA/NEWSCOM

BY WADE SHEPARD