Swaying at the back of a subway train on Beijing’s Line 9, two China Post personnel in yellow and blue overalls hold on to a green trolley full of parcels. A few passengers are seated in front of them in the nearly empty carriage, playing on their mobile phones.

The journey was taken on 23 September, day one of a pilot trialling express delivery via the city’s rail transit system. On its WeChat account, the Beijing Municipal Commission of Transport (MCT) described the scheme as the first in China to use off-peak capacity on the underground network for package couriering. It expects the project will help reduce the number of delivery vans on the road, ease traffic congestion and lower carbon emissions.

Staggered journeys

In September 2019, the CCP Central Committee and the State Council published a plan for turning China into a “transportation powerhouse” that included reference to “actively developing subway logistics in cities”. Then, eight months ago, the use of the subway for logistics was noted in the MCT’s 2023 transportation work plan. Line 4 and the Line 9 Fangshan–Yanfang route, both in the west of Beijing, were selected for the first pilot.

The scheme comes as express delivery – which can mean anything from same day to within several business days – is booming in Beijing. In this city of nearly 22 million permanent residents, drivers collect and deliver around 15 million packages daily. Most are transported by road, creating problems such as traffic congestion, haphazard parking and stop-offs, air pollution and carbon emissions.

In Beijing’s southeastern district of Tongzhou alone, industry publication China Logistics Times estimates in 2021 that 577 tonnes of carbon was emitted from the dispatch of express deliveries, ferried from city sorting centres to distribution points in the district and then on to customers.

However, with an average of nearly 10 million people using the Beijing subway each day, underground delivery must travel off peak to avoid passengers. For outbound trains on the Line 9 Fangshan–Yanfang route, there is ample capacity after 9am to allow for newspapers and periodicals to be transported; on that stretch of the network at that time of day, less than 20% of passenger capacity is used. Meanwhile, courier company SF Intra-City is trialling use of Line 4 on weekdays, departing with one batch of parcels at 12:30pm and another at 3:30pm, when capacity utilisation is less than 50%.

More than a month into the pilot, many in Beijing have spoken positively about it. One college student told People’s Daily that this form of couriering reduces traffic jams, while helping to protect the environment and lower emissions.

Shenzhen, China’s third most populous city, is also looking to introduce express delivery by subway. On 18 August, Shenzhen Metro Group and SF Express, China’s largest privately run logistics group, signed an agreement to collaborate on “rail logistics”. It will see dedicated subway carriages being used after the evening rush hour to transport freight along Line 11, from Futian Transportation Hub in the city centre to Bihaiwan station on the city’s north-west outskirts. There, goods will be transferred to the SF Express cargo base at nearby Shenzhen International Airport for shipment domestically and abroad.

Rail delivery’s environmental benefits

Using a subway or other urban and suburban rail lines to deliver goods is not a new idea. Several European cities have done it, reaping environmental benefits in the process, as described in a 2013 study.

In 2003, Zurich launched its Cargo-Tram scheme, using the city’s extensive tram network to collect and transport refuse in a bid to tackle the 300 tonnes of bulky waste being illegally dumped around the city each year. Collection points were set up at four tram stops to begin with, expanding to nine by 2005 following encouraging results. A study found that over the course of 2004, compared to trucking, the scheme reduced CO2 emissions and air pollutants such as nitrogen oxide and particulates. It also saved 37,500 litres of diesel.

In 2007, Amsterdam launched the City Cargo programme for transporting goods by tram. Cargo trams ran from 7am to 11pm, sharing tracks with, but not getting in the way of, passenger trams. Goods were offloaded at designated points and transferred to electric vehicles for last-mile delivery. The scheme aimed to reduce the number of commercial vehicles on Amsterdam’s roads by 50%, while also cutting noise and air pollution. City Cargo ran successfully in its initial phase, but went bust after two years after failing to acquire sufficient investment. Conflicting objectives among stakeholders did not help.

Also in 2007, the French supermarket chain Monoprix began using the suburban metro line to transport non-perishable goods from depots on the outskirts of Paris into the city. From there, they were distributed to stores in low-emission, LNG-fuelled vans. By 2013, 90 supermarkets were being supplied in this way, up from the initial pool of 27. A study that looked at the Paris project showed that moving goods by metro, combined with low-emission vans, resulted in 47% less CO2 emissions annually compared with conventional distribution, along with 56% less nitrogen oxide, and 36% less particulate matter.

These examples show that it is not only feasible to adapt rail networks for moving goods within cities, but also an effective way to reduce air pollutants and CO2 emissions from traditional road transport. The key to successfully implementing and maintaining the “express-delivery-by-subway” model is to make it economically viable by bringing down the investment and operating costs.

Daizong Liu, East Asia director at the Institute for Transportation & Development Policy, a thinktank headquartered in the US, believes there could be advantages to moving goods by rail in China compared to, say, the US or Europe. “It’s easier to achieve economies of scale and make money using express delivery by subway, because online consumption and parcel volumes are higher in China than anywhere else,” he says.

Inter-city freight needs more attention

It should be noted that transportation within cities accounts for just a fraction of China’s carbon emissions from deliveries. “Express delivery by subway should bring decent emissions reductions. But in the freight industry… the lion’s share involves mainline city-to-city shipments,” says Liu.

A Greenpeace East Asia report released this year noted that carbon emissions from China’s express delivery industry have grown by more than 200% over the past five years, reaching 55.6 million tonnes in 2022, with 62.7% of the total coming from transportation. Within transportation, 99.9% of emissions resulted from deliveries between cities and provinces.

The report shows that express delivery by subway within cities can reduce carbon emissions to an extent, but has minimal impact on emissions from express deliveries as a whole. It revealed that road and air freight are the main sources of carbon emissions from distribution between China’s cities. In the express deliveries sector, mainline road-freight emissions amounted to 18.7 million tonnes in 2022, while air freight added 13.7 million tonnes, it noted.

“Actions for reducing emissions in the express delivery sector need to focus more on shipping by mainline-and-branch routes, which account for nearly 99% of the carbon emissions,” the report stated. “There needs to be more work on emissions reduction for road and air freight – the two big sources of emissions – while developing greener, low-carbon options for last-mile delivery and exploring the use of zero-emission vehicles, multimodal transportation and more.”

In stark contrast to the high emissions from road and air, total mainline rail freight generated just 420,000 tonnes of carbon emissions in 2022, the report noted. Even excluding the impact of cargo volume, average carbon emissions for couriering a single item by rail are 43% that of road delivery and 7% of air freight.

“Generally speaking, it is more difficult to electrify road haulage for longer distances because EV batteries are very heavy with the current technology, and lorries make money based on their tonnage,” says Liu. “This limits electric goods vehicles from competing with conventional lorries in terms of profitability and overall operational gains.

“For medium and long distances, then, high-speed rail is a more effective way of reducing emissions from express deliveries.”

China has the world’s largest network of conventional and high-speed railways, and enabling parcels to be couriered via seamlessly connected inter-city and intra-city rail lines will be key for the next stage of emissions reduction in the express delivery sector.

This article was originally published on China Dialogue with the title “Underground Express: The Quiet Rise of Subway Couriers in China” and has been reproduced under the Creative Commons BY NC ND licence.

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In late 2021, two Ming dynasty terracotta clay figurines returned to China after residing in a private collection in the United States for nearly a century. The figurines were presented to the Shanghai Museum for inclusion in their collection of 66 similar Ming dynasty figurines, which owner Suzanne Fratus had seen at the Asian Art Museum in San Francisco in 1983 when they were on loan from the Shanghai Museum.

Fratus’ grandfather, John Herbert Waite, who was an ophthalmologist and spent some time working in Asia, was gifted the figurines by a Chinese patient whom he cured. He returned to the United States with them in his possession in the early 1900s, and the figurines were passed down through the family to Fratus, who decided to return them to China via the Chinese consulate-general in San Francisco in April 2021.

The return of the figures, which was facilitated by the freight forwarding specialists at CBBC member company Heighten, is not just a story of cultural appreciation across borders; it also sheds light on the unique skills needed to ship fine art and artefacts across borders.

“The list of specific challenges when shipping cultural artefacts is very long,” says James Grayland, Heighten’s International Director. Beyond obvious requirements like making sure items are properly packaged so they don’t get damaged in transit, there can be multiple layers of bureaucratic and communication-related hoops to jump through when transferring art or artefacts to and from China.

Suzanne Fratus’ clay figurines ready to be returned to China. Source: Heighten

Museum objects, for example, are usually national property, requiring permits at the national and local levels, which, in recent years, have typically been issued very close to the time of shipment. In addition, objects over 100 years old like the clay figurines in this story are treated as antiquities under the jurisdiction of the National Cultural Heritage Administration (part of China’s Ministry of Culture & Tourism), meaning that they need to be handled differently to modern art, for example.

In addition, Grayland notes that there can often be a significant cultural gap. “The level of transparency on the ground handling process or with China customs is lacking,” he says. “Furthermore, often fine arts teams do not have regular customs interaction, meaning their depth of knowledge can be lacking, combined with possible language barriers and a lack of understanding of norms in other countries.”

As a result, communication is key. “Like many projects involving China, the key is to build relationships across all the stakeholders, and where possible and applicable, to open up communications across all those parties,” says Grayland. “What we find is that chains of communications traditionally are just that, ‘chains’.” Communications move back and forth between single points of contact, but this can be very inefficient. Instead, Heighten focuses on creating broader networks of relationships from the get-go, so that “as the pressure increases, communications are much more effective and the level of trust & understanding higher. Likewise, there are much better lines of communication across all stakeholders, who, if necessary, can develop smaller expert groups to work on specific technicalities.”

As with most interactions with China these days, one of the major challenges Heighten is having to work with is Covid-19. “The majority of the projects we worked on before required courier supervision end to end. For large exhibitions this can be a governmental and insurance-based prerequisite,” Grayland explains. Of course, China’s strict quarantine requirements under the ongoing zero Covid policy now mean that end-to-end supervision by a single individual is not possible.

“Due to this we have been helping clients by offering a bookend courier solution, where our team can step in and meet the shipment, then carry out due diligence and monitoring of the exhibits in place of their own team,” says Grayland. “This is an exciting new area for us, however it does create new dynamics and requires very clear communications and agreement on expectations between the multitude of different parties involved.”

Get immediate access to the China market with Launchpad, CBBC’s flagship market entry service. Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out more.

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For many years now, UK importers have fallen into the trap of letting their Chinese suppliers ‘pay’ for freight of LCL (Less than Container Load) shipments from China to the UK.

On the face of it, it seems like a great deal. The supplier is offering to pay the freight costs and is taking on the headache of arranging the shipment. However, the reality couldn’t be further from the truth.

The actual arrangement involves Chinese consolidators (in conjunction with their UK counterparts) offering the suppliers a ‘rebate’ scheme. In return for using their consolidation service to the UK, the consolidators will offer the supplier a rebate of up to £200 per cubic metre of freight given to them.

Someone somewhere has to recover this amount of money being offered, and in simple terms, that someone will be the UK importer. When the shipment arrives in the UK, the importer will be made to pay overinflated, made-up costs so that the consolidator recovers the ‘rebate’ and can share these unscrupulous profits with their UK counterparts.

On their notice of arrivals document, they will see made-up charges such as:

• Interim Currency Adjustment Surcharge
• Currency Adjustment Factor
• China Import Service Fee

As the freight was pre-paid, there is no currency that needs to be exchanged or adjusted. This is just a made-up charge.

There are also service fees for documentation that can be well over £100, or terminal handling charges that are almost double what the industry norm.

Unfortunately, once the shipment arrives, there is no legislation on what the consolidators can charge. They can simply make their own tariff charges and will not release the shipment to the UK customer until all charges are settled.

So it is important that all importers are aware of the pitfalls of accepting ‘free shipping’ – there really is no such thing – and it’s likely to end up costing more in the long run. For importers looking to bring in goods from their Chinese suppliers, it’s important that they speak to UK professionals who have experience in the China market.

It is advised that importers purchase shipments on a Free On Board (FOB) basis, which enables the importer to control the charges and the schedule. This Incoterm rule specifies that all local charges in China are paid by the supplier’s account and the UK charges are controlled with the importer’s forwarder. There should be no hidden costs involved when receiving shipments through a reputable forwarder.

For more information on importing from China, contact gary.wilcox@jagufs.com

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