China’s inter-modal rail system holds the key to opening the country’s interior to increased export production, according to APL North Asia President Ken Glenn during a recent logistics forum.

The expansion of freight rail service will attract increased investment to Western and Central China, regions coveted for their lower manufacturing costs, said Glenn.

“It is our belief that with expanded infrastructure, the rate of investment in these regions will accelerate and grow at a faster rate than China overall,” he told an audience attending the China Chongqing International Investment and Global Sourcing Fair.

APL pioneered intermodal rail transport for containerized cargo in the U.S. during the 1980s. In 2007, sister company APL Logistics introduced IndiaLinx, that country’s first private freight rail system. Since then it has also established intermodal rail service in Egypt.

“APL is justifiably proud of its history of intermodal innovation and service,” Glenn said in his speech. “We believe we’re uniquely qualified to bring that experience to China, and we will look for opportunities here to connect China’s interior with the coastal regions.”

Historically, most Chinese exports have been produced in the country’s coastal areas. But Glenn said manufacturers will increasingly move West as capacity, frequency and the quality of rail connections between the interior and China’s seaports improve.

He added that railroads are less expensive and produce fewer emissions than trucks and provide greater flexibility than river barges.

“China can be proud of having some of the world’s largest and most productive seaports,” Glenn said. “Intermodal rail has the most promise and potential to address the long-distance logistics and transportation needs of the country’s export manufacturers.”