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DHL and KTZ Express sign MOU to enhance China-Kazakhstan rail freight link 30 June 2015

Greater rail connectivity between China, Kazakhstan, CIS countries and Europe

DHL Global Forwarding has signed a Memorandum of Understanding (MOU) with Kazakhstan Temir Zholy Express (KTZE), a holding company based in Kazakhstan which functions as the national multimodal operator.

The pioneering MOU will enhance greater rail connectivity and trade between China, Kazakhstan, the Commonwealth of Independent States (CIS) countries and Europe, providing DHL Global Forwarding with additional commercial block train services. This will allow DHL Global Forwarding to enhance the scheduled rail services for customers, increasing the overland rail routes as a complimentary alternative to traditional sea and air freight.

Under the MOU, KTZE will be responsible for operating rail activities from point to point as well as across the China/Kazakhstan borders. DHL will also focus on developing its forwarding capabilities along crucial trading routes linking China, Kazakhstan and CIS countries while KTZE will add several logistics service locations to its existing network as well as increasing their overall capabilities. The partnership will see the development of additional rail offering along the South Silk Road trade route to Europe via Kazakhstan.

There has been tremendous growth in rail freight between Asia and Europe over the last few years and DHL see a lot of growth potential in many intermediate trade hubs such as Kazakhstan. Kazakhstan's own economic development stands to benefit significantly from strong infrastructural links to China and the EU, its two largest trading partners. Transportation alone makes up more than 10.0% of the country's services exports.

With the setting up of the Khorgos Special Economic Zone, this partnership will offer new logistics solutions within the zone which will contribute to the importance of the trans-Kazakh route as one of the major trade nodes connecting China, Kazakhstan and the CIS region for onward distribution to Europe.

According to the European Commission, the volume of China-EU trade amounts to more than €1.0 billion every day, making the trade route the second-largest cooperative economic relationship in the world. The KTZ group expects annual trade between China and Europe to grow by 1.5 times to reach US$1.2 trillion, with Astana aiming to have 8.0% of that transported through Kazakhstan as well.

KTZ Express is looking to establish the most advanced central Asia logistics hub in Kazakhstan by enhancing various facilities across the country and improving its freight forwarding capabilities. The partnership with DHL will not only accelerate its pace towards achieving this goal but will also help it serve multinational corporations with regional needs in these high-potential markets. KTZ Express will continue to work on reviving the Silk Road and increasing its capacity to move goods within the region as its economic growth and development gain critical momentum.

As part of the MOU, DHL Global Forwarding will provide logistics expertise which includes value-added offerings such as temperature controlled containers to support businesses in industries like technology and electronics.