Leveraging Rail for Product
Delivery in China

In 2017, China’s construction industry experienced a strong recovery, largely driven by government investment in infrastructure, the housing boom and the Belt and Road initiative. The recovery resulted in a significant increase in excavator demand in China, which translated into unprecedented growth opportunities — albeit with some challenges for both Caterpillar Xuzhou Limited (CXL) and our supply base. With the increased demand, the CXL supply chain team identified and pursued new opportunities to improve capacity through a series of bold process innovations and optimization, enabling them to respond to customer needs more swiftly and ensure products were delivered on time.

One enabler of on-time delivery was our use of rail transport. This supports the government’s initiative to use rail for machine transportation, which reduces carbon emissions, enhances transportation safety and positively impacts our ability to serve customers. Rail deliveries also reduce costs and additional handling when machines must be disassembled for shipment, then reassembled at the customer’s job site. Rail also improves transit times in winter, and helps free truck capacity during the peak selling season.

Getting heavy equipment to jobsites can be complicated and costly, and we are constantly looking for ways to improve transport logistics. Embracing rail is leading to improvements in speed, energy use and cost, leading to wins for Caterpillar and our customers. It worked for the CXL team, which achieved record production in 2017, 40 percent higher than 2016 and more than 42 percent above the previous record in 2011.