6 Sept 2019
Budapest Launches Charm Offensive in Bid to be BRI Rail and Air Hub
Hungarian capital looks to restore logistical pre-eminence it enjoyed in halcyon days of classical Silk Road.
Given its strategic geographical positioning and historic associations with the Silk Road of classical times, it is perhaps no surprise that Hungary has been at pains to position itself as a vital nexus for the Belt and Road Initiative (BRI), China's ambitious international infrastructure and trade facilitation programme. The 93,000 sq km country occupies, after all, a fortuitous location that could make it the preeminent funnel for east-west land freight, while also seeing it well positioned to act as a distribution hub serving central, eastern and western Europe.
With the possible trade volumes inevitably huge, as are the knock-on economic benefits to this 10-million strong nation – its government has gone out of its way to – welcome the BRI, while being quick to advocate the advantages of both the country's land connectivity and its suitability as an air-freight distribution and aggregation hub. Of late, a number of logistical developments, with regard to rail access and aviation resources, have combined to bolster its bid to be at the forefront of a new era of East-West trade co-operation.
On the rail front, a new China-Europe freight train service has launched, connecting Jinan, the capital of eastern China's Shandong province, with Budapest, the Hungarian capital. The service, operated by Moscow-headquartered RDZ Logistics, is now the fifth cargo train route linking Europe and Central Asia, with 12 countries said to enjoy a direct connection.
In the first half of this year, some 81 freight trains completed the 8,000km journey from Jinan to Central Europe, a six-fold increase on the comparable 2018 rail freight-flow volume. In total, it is thought such services have conveyed about 65,000 tonnes of rail cargo, with an estimated value of US$155 million. It is expected the frequency of such services will only increase in future, with a number of additional destinations also being incorporated into the network.
With regards to air connectivity, Budapest Airport – in partnership with AirBridgeCargo Airlines, a Moscow-headquartered airfreight handler – has been on something of a charm offensive in both Shanghai and Hong Kong. Its primary focus has been wooing local air cargo clients, as well as the region's e-commerce operators.
To this end, it hosted a series of events that attracted such mainstays of the two sectors as Yunda Express, STO Express and SF Express, as well as representatives from both Qingdao and Xian airports. Although these sessions primarily focused on the new air routes opening up between Budapest and mainland China, they also touched upon the airport's expanded range of e-commerce services, its wider role within the BRI and the future possibilities opened up by its Cargo City facility.
Set to open in November, Cargo City will be Budapest Airport's dedicated freight terminal, with its total warehouse space and integrated forwarder facility extending across 32,800 sq m. As part of the same development, a 32,000 sq m concrete apron will expand the airport's capacity for cargo-processing, adding additional parking positions for the simultaneous handling of two aircraft up to the size of a Boeing 747.
Earlier this year, the airport extended its connections to China with the launch of a new freight flight – operated by Cargolux, a Luxembourg-based air-freight specialist – to Zhengzhou Xinzheng International Airport in the east-central Henan province. In June, an additional cargo route linking the Hungarian airport with Shanghai also came online.
Commenting on the developments, Rene Droese, the airport's Chief Property and Cargo Officer, said: "We believe we are on track to become the main cargo hub for China in the Central and Eastern Europe region. With the region's e-commerce market now valued at €80 billion per annum, our location makes us ideally placed to service that, both through our existing resources and those scheduled to be added over the coming years".
Beata Balazs, Budapest Consultant