‘Finding a reliable overseas agent is like finding a needle in a haystack’
The New Silk Road may connect countries, but it does not necessarily connect people. In China, companies seem to find it difficult to find a reliable partner in Europe, and in Europe it is often argued that it is not easy to understand local business rules in China. In an interview with T.H.I Railway Business Unit, a Chinese forwarding company, these issues are further discussed.
“We used to work with a European freight forwarder. When we first got in touch all went well, and the inquiry response was very fast. However, we could net contact them after delivery. Emails were not returned, and nobody followed up with us. Goods incurred a lot of extra costs in Europe. In order to take responsibility, we had to bear the extra losses. What we learnt is that we have to be more careful”, said Will Kong, Executive VP of
T.H.I. Group’s Railway Business Unit, when describing the experience of looking for overseas agents.
T.H.I Railway Business Unit
T.H.I Railway Business Unit is the department responsible for cross-border railway transportation under the listed company T3EX Global Holdings. Since its establishment in 2013, it has established a dense European agency network. It is the main player on the route between Zhengzhou and Europe. At the same time, they have many China-Europe railway lines in Chongqing, Xi’an, Chengdu, Yiwu, Hefei, etc, where they offer mature services.
Moreover, crises like the pandemic and the blockage of the Suez Canal have turned out in their favour. These crises have hit maritime transport hard, which has caused many cargo owners to turn to railway transportation. As a result, the T.H.I Railway Business Unit faces a luxury problem: “Our business volume is getting bigger and bigger. I hope to find more trusted overseas partners to assist in the operation of some existing or additional routes.”
With the increasing number of companies and parties involved, it is not easy to find reliable agents across tens of thousands of kilometers. There are information barriers and cultural differences between China and Europe. In addition, the pandemic is still causing hurdles to international trade.
When field visits and face-to-face communication are almost non-existing, the only option is online communication. Finding like-minded partners is like finding a needle in a haystack, says the forwarder. And, it doesn’t seem to be something that can be solved easily.
How to find an overseas agent?
“We started with ocean shipping in 1984, followed by air freight in 2000 and rail freight in 2013. We were the first to get on the New Silk Road. Fortunately, we started early and we have a solid resource base in the field of air and ocean shipping as an overseas agent. The resources are abundant, and some of the long-term cooperation partners developed from the warehousing business”, Kong explained.
“When we look for agents, we basically look for members of the WCA Association. They have a good reputation, this is guaranteed.” WAC Association refers to the World Cargo Alliance, which is the largest and most influential network of independent freight forwarders in the world, covering 186 countries. Only companies that meet the strict professional and financial standards within the network can join. In order to ensure the service quality of the members of the alliance, penalties and compensation options are available.
Having such a network available, one may wonder why it is still difficult to find a reliable agent. However, most of the members of this association specialise in sea and air transportation, and rail freight between China and Europe is still in its infancy shoes. It is a high-quality business and therefore, there are only a handful of agents. The companies that appear in the list of members of the association overlap with the well-known overseas agency oligarchs. As a result, the role of the association in the railway industry seems to be very limited.
Pioneers in the field of China-Europe rail transportation such as T3EX Global Holdings are still facing the trouble of finding new agents, not to mention some small and medium-sized railway companies. “Some experienced practitioners know how to find an experienced and relatively cost-effective freight forwarder to cooperate, while those who just started a foreign trade company generally only know how to find well-known companies for transportation. Although large companies have endorsements, their operating costs are often also higher. Because the service is always limited, the response speed is not necessarily as good as with a local agent”, an operator commented on FOB business Forum, a Chinese industry forum.
Overseas agents need to be more proactive
Ironically, although Chinese companies are having difficulty finding overseas agents, there is plenty of supply, as the number of European companies on the New Silk Road is increasing steadily. So, where lies the problem? Is the distance too far? Is it a language barrier? Or is it a cultural difference?
“We have a partner in Germany who we have cooperated with for seven or eight years. This company has a strong sense of service and always responds to emails in a timely manner. We communicate as quickly as possible in emergencies, mostly by email. In short, the cooperation is very smooth”, said Kong.
Considering this, cross-border cooperation does not necessarily have inherent defects in distance, language, and culture. What is more important may be the willingness to actively communicate. Kong continues: “We have plans on routes such as Liège, Munich, Duisburg, Hamburg, Warsaw, etc., mainly with LCL cargo. We open the door to cooperation with all high-quality overseas agents, and we are also willing to try different cooperation models.”
RailFreight Networking Days
The experience of T.H.I Railway Business Unit reflects that of many Chinese forwarding companies that want to reach out to European partners, and similarly, European companies do not always find their Chinese partner.
Are you also worried about finding a reliable overseas agent? Or any partner in the rail freight industry? We organise the RailFreight Networking Days, which have the goal of connecting as many rail freight professionals as possible.