China-Europe rail gets a head of steam from Covid rules relaxation

Source: The Loadstar
Date: 16th December 2022

Following the country’s sudden change in Covid policy, rail is expecting smoother supply chains in China.

According to a reliable source, Covid restrictions were seriously hampering the movement of cargo.

We’re expecting a little boost in the run-up to Chinese New Year on stuck orders from China to Europe, as some factories were closed.

We have seen delayed shipping orders over the past two months, and delayed pick-ups due to the Covid restrictions – one hassle was that some pick-up trucks could not enter certain regions due to Covid, and this caused delays which are now over.

China-Europe rail freight rates had been dropping towards pre-Covid levels, but not as fast as sea freight, adding: Eventually they will be close to $2,500-$3,000 higher than sea freight like they were before.

Indeed, after a tumultuous start of the year for rail freight, following the Russian invasion of Ukraine, the mode has experienced a strong second half, compared with sea and air freight, and is now expected to register another year of double-digit volume growth.

For example, according to China Railway, there were 15,162 China-Europe trains operated in the first 11 months of the year, carrying 1.48m teu, up 10% and 11% respectively.

The railway network has also benefited from increased investments in alternative routes from the main corridor through Russia.

We’ve seen a boost in the middle corridor, both from China-Europe and the Caspian rail networks. The number of ferries in the Caspian Sea was increased to seven, which means three-or-four days faster transit times.

Furthermore, he said, there had been growth in the number of express trains, such as the Xian-Duisburg service, which takes 10-11 days.

This service can compete with airfreight more than sea freight. The prices are around $1,500-$2,000 per container higher than regular rail freight, as the transit time is faster. This means we will see a shift towards express rail in the coming months, as more express lanes will be established from China into Europe.

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