Firms urged to take rail route
Firms urged to take rail route
Prime Minister Hun Sen urged logistics companies transporting heavy goods to switch from container truck shipping to rail shipments, increasing cost efficiency while sparing the nation’s roads from load damage.
“We have a railway operating nowadays,” he said during a rice conference in Phnom Penh yesterday. “The problem is some cargoes are too heavy.”
“Heavy cargoes like steel, cement and other items that exceed 80 tonnes . . . will damage the road,” he continued.
“So we need to consider as a solution changing the mode of transport and working with logistics firms to gradually switch to using the railway between Phnom Penh and Sihanoukville for certain products.”
Cambodia has just one working railway line. The 266-kilometre “Southern Line” between the capital and the principal seaport in Sihanoukville opened to commercial rail traffic in 2013 after extensive rehabilitation. The 386-kilometre “Northern Line” linking Phnom Penh to Poipet and Thailand remains inoperative.
According to Sam Oeun Tith, commercial manager of Royal Railway, the company holding the 30-year concession to operate the country’s railways, freight trains run daily between Phnom Penh and Sihanoukville carrying oil, coal, building materials, garments and rice.
Tith welcomed the prime minister’s endorsement, insisting that using rail to transport bulk items was more cost efficient than shipping them by container truck. He said shipping a standard 20-foot container by rail from the capital to Sihanoukville costs about $100, and about $120 for a 40-foot container.
Trucks, by comparison, cover the same route for about $200 per container.
However, convincing logistics firms to switch from container trucking to rail shipments has proven difficult.
“We’ve tried for many years,” Tith said. “Many customers still use container trucks, but some have switched to the train.”
“We intend to expand services for heavy cargoes,” he added.
Ken Nhan, general sales and marketing manager of Chip Mong Group, welcomed the prime minister’s suggestion, but said the Southern Line had a number of shortcomings that were discouraging companies from utilising it for freight shipments.
One glaring issue, he explained, was that the line’s terminus in Sihanoukville was built just short of the seaport, requiring firms to unload their cargo from train cars onto hired trucks to transport it the last several hundred metres to container ships in the port.
“[The railway company] needs to extend the tracks to reach the port,” Nhan said.
“For now, the tracks do not reach the final destination and there is still a need to hire trucks to transfer goods from the station to the port.”
Nhan said railway performance was slowed considerably by the single-track line and limited service schedule. He said if the country’s railway service were fully developed his company would consider switching to it for transporting cement products, for which it currently relies entirely on container trucks.
Eng Sopheak, head of export and import at freight forwarder Meng Hong Leap Logistics Co, said while the basic cost of rail service was cheaper than container truck, the savings were lost once the time and expense of loading and unloading were factored in.
“Most of our clients choose to use trucks to transfer their products to Sihanoukville because it takes more time when using the train to unload goods at the station to transfer them to the port,” she said.
“The cost could end up being higher than going directly by truck.”
Chan Pech, general manager of Cambodian rice miller Signatures of Asia, said that although rail freight shipments might reduce transport costs, they could not match the convenience of container truck shipping.
“Trucks are faster and the time is flexible, while the train has only one fixed schedule departure per day – though it has the benefit of more capacity to carry more goods,” he said.
Pech urged Royal Railway to improve its services, build more stations and spur lines to connect rice mills and warehouses in the nation’s agricultural heartland.
“The timing must be faster and the schedule must have more point to point service,” he said.
