Developing logistics solutions in China - EU trade Railway Pro Technology & Services Forum Arad Severin Göbl Head of International Pricing Rail Cargo Hungaria Zrt. 05.04.2017

China - EU trade: an amazing development seen in recent years… Total trade ~700 bil.EUR with a massive EU deficit China has became the biggest trading partner for EU recently „If the ancient Silk Road developed to enable trade in fine cloths and spices, the new one will transport computer equipment and frozen chicken.” 5/15/2019

China - EU trade future outlook: Positive trends seen in industrial, negative in consumer goods segments Ambitious progress has been prospected for next period: China to EU more than 60% up EU to China more than doubling Effects of an FTA China's exports to European Union $432.9 billion, 8.3% of its overall imports.     1. Electronic equipment: $124.5 billion   2. Machinery: $87.4 billion   3. Clothing (not knit or crochet): $21.1 billion   4. Furniture, lighting, signs: $18.9 billion   5. Knit or crochet clothing: $18.4 billion   6. Toys, games: $17.4 billion   7. Footwear: $12.4 billion   8. Medical, technical equipment: $10.8 billion   9. Plastics: $10.6 billion 10. Organic chemicals: $9.7 billion 5/15/2019

China - EU transportation of goods: there are different modes and different ways available for reaching Europe… …but they are not equivalent! China’s famous „One Belt One Road” policy ~11.000 km 13-15 days RAILWAY Sea and rail freight are the most attractive solutions from cost point of view, but each one has its handicap ~21.000 km 30-35 days SEAWAY 5/15/2019

The railway alternative: “We are cheaper than air but faster than sea” 2008 Oct.: the first train arrived from Xiangtan to Hamburg (17 days) 2013: Chengdu – Lodz train opened 2014 Dec.: the first Yiwu – Madrid train arrived In 2017 more than 12 system train connections: 2016 Two main routes: either going due north from China and connecting with Russia's Trans-Siberian or going west across Kazakhstan and feeding into the Trans-Siberian at Yekaterinburg 47.000 containers 1.250 trains Suzhou – Warsaw Lianyugang – Rotterdam Chengdu – Lodz Chongging – Duisburg Yiwu - Madrid Zhengzhou - Hamburg First Yiwu- Madrid train arrives 2014 5/15/2019

The Piraeus Project: significant advantages against EU North ports And the way of COSCO: a special combination of sea and rail freight, shortening transit time and cutting costs The Piraeus Project: significant advantages against EU North ports DE SK AT CZ PL HU RS RO BG BH 3d ~17.000 km 19 – 26 days Main EU port in Mediterranean Sea means: Sea route is shorter by 4.500 km Sea transit time is shorter by 6-9 days Middle Europe is in arm’s length of 3-5 days 5/15/2019

The Piraeus Project: COSCO means significant train movements to CEE Terminals involving national RUs RCH/ RCC/ CDC: Kelebia – Rajka / Rusovce – Kuty / Breclav - Pardubice PEARL: First Piraeus-BILK train in January 2017 PCT - Thessaloniki – Idomeni / Gevgelija - Tabanovci/ Presevo – Subotica / Kelebia Departure Arrival Rail CY Day Rail CY (Terminals) TAT (days) ROUTING PCT, Greece Wednesday Bratislava, SK (RCO CSKD) Saturday 3 GR-MK-RS-HU-SK Pardubice, CZ (CERNA ZA BORY) Sunday 4 GR-MK-RS-HU-SK-CZ Thursday Budapest, HU (BILK) GR-MK-RS-HU 5/15/2019

The Piraeus Project: COSCO targets to reach also relevant East Balkan terminals in the region Tractioning of trains planned by PEARL in partnership with the national RUs SHUTTLE TRAIN from Piraeus to East Balkans Departure Arrival Rail CY Day Rail CY (Terminals) TAT (days) ROUTING PCT, Greece Tuesday Skopje, MK (Fersped ) Wednesday 1 GR-MK Belgrade, RS (Pancevo) Thursday 2 GR-MK-RS Sofia, BG (Ilyanstsi) Friday GR-BG Bucharest, RO (Tibbet) 3 GR-BG-RO 5/15/2019

The RCG as relevant player in the region: Our terminal network and succesful train solutions fit well into the COSCO strategy Produkte RCO Maritim Nord/West RCO Maritim Süd RCO IM SEE RCO Kontinental RCO CSKD Züge RCO ROLA / ISU RCL-AT Balkanzüge RCL-AT Italien Züge RCL-AT Rumänien Züge RCL-AT GUS Express RCO-HUN Kombi Express, BILK-Ploiesti RCL-AT Slawkow Shuttle ZNL-SLO Koper Shuttle Antwerpen Shuttle Budapest/ Bilk 5/15/2019

Thank you for your Attention! 5/15/2019

Backup: Railtrack reconstruction works on Budapest – Beograd Line Current line will be reconstructed by financial support from China 2-nd track will be built along the route Modern train control system will be installed allowing 160 km/h speed Efforts to extend European TEN- T system to the Balkan route 5/15/2019