DHL Global Forwarding signed a memorandum of understanding with Kazakhstan Temir Zholy Express (KTZE) late last month to develop greater rail connectivity and trade between China, Kazakhstan, the Commonwealth of Independent States, and Europe.

DHL says the MOU will provide the company with additional block train services, increasing the overland rail routes available to DHL and its customers as an alternative to sea and air freight. The primary focus of the MOU is the delivery of Chinese goods overland to the European Union. According to the European Commission, China-EU trade amounts to over $1 billion daily, making the trade route the second-largest cooperative economic relationship in the world.

Under the MOU, KTZE will be responsible for operating rail activities from point to point as well as across the China-Kazakhstan borders and will add several logistics service locations to its existing network and increase their capabilities. KTZE is a holding company based in Kazakhstan which functions as the national multimodal operator.

“KTZE is looking to establish the most advanced central Asia logistics hub in Kazakhstan by enhancing various facilities across the country and improving our freight forwarding capabilities,” said Sanzhar Yelyubayev, president of KTZE. “KTZE will work hand in hand with DHL to further develop end-to-end logistics solutions via rail and multimodal solutions in this part of the world.”

DHL will focus on developing its forwarding capabilities along the trading routes linking China, Kazakhstan and CIS countries. DHL will also provide value-added offerings such as temperature-controlled containers. DHL Global Forwarding introduced the first temperature controlled China-Europe rail service last year.

“We have witnessed tremendous growth in rail freight between Asia and Europe over the last few years,” said Steve Huang, CEO of DHL Global Forwarding China. “We 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 links to China and the EU, its two largest trading partners. Transportation makes up over 10 percent of the country’s services exports.”

The partnership will develop additional rail offerings along the South Silk Road trade route to Europe via Kazakhstan. The partnership will also offer new logistics solutions within the Khorgos Special Economic Zone in Khazakstan, enhancing the trans-Kazakh route connecting China, Kazakhstan, the CIS, and the EU.