Rail freight won't affect ocean shipping volumes on Asia-Europe trades

27th September 2017

CAPACITY limitations on the China-Europe rail route and the comparatively higher freight costs mean there will be little impact on the volume of cargo transported by container ships, according to executive director of Hutchison Ports and CEO of the UK port of Felixstowe, Clemence Cheng.

"While the rail demand will grow, it will not be enough to make a sizeable dent in ocean volume," Mr Cheng was quoted as telling delegates at the Belt and Road forum, a part of the London International Shipping Week conference, reported IHS Media.

"There are 270,000 TEU of weekly ocean capacity between Asia and Europe, and that will increase to 300,000 TEU per week next year as the mega-ships are deployed. By contrast, there are only 30 trains a week on the Silk Road providing a total capacity of around 4,000 TEU per week, less than two per cent of the shipping capacity," said Mr Cheng.

The rail option between China and Europe is growing in popularity among shippers, and services offered by forwarders include whole block trains, full container load, and less-than-container loads. However, Asia-Europe rail capacity is struggling to keep pace with demand.

Delays were reported through the summer on the European end on the Chiongqing-Duisburg route and at the Poland-Belarus border, and HP strategic procurement manager David Smrkovsky said this was damaging the transit time advantage that rail freight should bring versus sea freight.

Dachser Far East managing director, air and sea logistics Asia Pacific, Edoardo Podesta also reported delays on the China-Europe route.

"In a way, the train service is a victim of its own success, going from a niche to kind of mainstream means of transportation with bottlenecks emerging at terminal level," he said. "The main factor seems to be that infrastructure is not coping too well with a very accelerated growth in the number of block trains."
 

Source : Hong Kong Shipping Gazette

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