Logo of Phnom Penh Post newspaper Phnom Penh Post - Freight rail services gather pace

Freight rail services gather pace

A worker walks past a Royal Railways freight shipment earlier this month.
A worker walks past a Royal Railways freight shipment earlier this month. Hong Menea

Freight rail services gather pace

Freight rail shipments have gained traction since commercial rail traffic resumed on the Kingdom’s sole operational railway line in 2013, but Royal Railway, the private company with a 30-year concession to operate the Kingdom’s railway network, is pressing for more growth as it seeks to triple the current volume of cargo.

“In 2013, we were hauling on average about 50 containers a month. Now we are averaging about 2,000 to 2,500 containers per month,” said John Guiry, CEO of Royal Railway.

He said the target is to haul 6,000 containers per month “to get full utilisation of the railway line,” adding that the railway had seen a marketable increase in transport, primarily for rice, garments, fertiliser and cars.

Currently, rail operations are limited to the “Southern Line” that connects the capital and the country’s principal seaport in Sihanoukville. On a busy week, over 650 containers make the 266-kilometre journey.

While freight usage has increased significantly, Guiry said Royal Railway is struggling to turn a profit, with cargo transport fees absorbed by the costs of regular maintenance, fuel and staff salaries. In a drive for efficiency, the company is considering double-stacking rail cars to increase their payload capacity.

“Currently, each 134-car train can haul a 60-tonne payload,” he said.

According to Guiry, one of the earliest companies to adopt rail transport for its supply chain logistics was Siam Cement Group.

The company ships Indonesian coal from Sihanoukville port to fire kilns at its cement plant in Touk Meas, Kampot province. From there, the bagged cement is hauled to the company’s warehouse in Phnom Penh’s Toul Kork district, he said.

Petroleum has also proven to be a growing commodity, and rail shipments are reducing distributors’ reliance on the more perilous road journey between Sihanoukville and Phnom Penh.

“We bring up about 1.7 million litres twice a week for Sokimex and 1.1 million litres about five times a week for Kampuchea Tela,” Guiry said.

While the railway has solidified a few niche markets, detractors claim gross inefficiency, the low level of scheduled service and costly add-ons have made rail a distant second option for commercial freight shipments.

According to Song Saran, CEO of Amru Rice, rail freight service only picked up in the first quarter of this year on the back of an 8.5-per cent surge in rice exports.

“There was more demand in the first quarter of this year for exports to the EU and China,” he said. “Trucking capabilities weren’t enough, so we had to resort to using the railway.”

“The main shipping cost is about $20 dollars higher than road,” Saran said, adding that this cost was relatively manageable at face value – about $100 per 20-foot container.

However, when the additional costs of delivering cargo to the rail terminal in Phnom Penh and unloading the rail cars in Sihanoukville are factored in, the total cost rises to $120 – about 50 per cent more than shipping by container truck.

Moreover, Saran added, getting cargo shipments to the rail terminals was not just costly, it was inconvenient, while the limited schedule of rail service increased the risk of delivery delays.

“Right now, there really isn’t a competitive trucking service that will take shipments just from the warehouse to the [Phnom Penh] terminal,” he said, adding that companies have to rely on their own trucking capabilities.

“The railway needs to build more terminals and they should have their own tracks to warehouses.”

Nevertheless, Noun Ratana, sales and marketing manager for RDL Logistics, said interest has seen a significant uptick primarily for hauling heavy materials like cement and fertiliser, and particularly when the availability of trucks is strapped.

“However, there are also disadvantages of using this railway, as it is time consuming,” he said. “In the case of urgent shipments, it causes delays for deliveries to our customers.”

MOST VIEWED

  • Hun Sen defends decision to dock Westerdam cruise ship

    Prime Minister Hun Sen on Thursday hit back at critics who say he allowed the Westerdam cruise ship to dock in Sihanoukville for political reasons. Speaking at an annual gathering of the Ministry of Interior, Hun Sen said he acted to avert a humanitarian catastrophe

  • Cool heads will defeat Covid-19

    Since Covid-19 was first reported as a world health issue, cruise ships have been the worst to suffer after airlines. The experiences of those who were initially trapped on the Covid-19-stricken Diamond Princess are unimaginable. The cruise ship was rejected from docking at one

  • Westerdam passenger ‘never had’ Covid-19

    The US Centres for Disease Control and Prevention (CDC) said the US citizen that allegedly tested positive in Malaysia after travelling on the Westerdam was never infected with Covid-19 in the first place. In an article published in the newspaper USA Today on Friday, CDC

  • ‘Ghost staff’ found, $1.7M returned to state coffers

    The Ministry of Civil Service said more than seven billion riel ($1.7 million) in salaries for civil servants was returned to the state last year after it discovered that the books had been cooked to pay ‘ghost officials’. This is despite claims by the Ministry of

  • Affordable housing project in Kandal nearing completion

    Worldbridge Homes Co Ltd’s $73 million affordable housing project in Kandal province’s Koh Kor village, in Sa’ang district, is on track to be completed at year’s end or at the beginning of next year, its general manager Yuk Sothirith told The Post

  • Crimes up with 211 deaths, influx of foreigners to blame

    Minister of Interior Sar Kheng on Wednesday said crimes increased by eight per cent last year, resulting in 211 deaths. He revealed the figures during the ministry’s 2019 review and laid the blame for the increase on an influx of foreigners into the Kingdom. “The crime