UTLC sees potential for another 20pc growth in China-Europe rail
RECORD-BREAKING China-Europe rail freight could grow another 20 per cent via improved border crossings and network integration, said railway operator United Transport and Logistics Co (UTLC), reports London’s Loadstar.
Such good news has been damped by word that China-Europe rail freight must prepare for life after Beijing subsidies that have driven growth from the start.
Volumes have jumped 10-fold, from 142,000 TEU in 2016, to 1.33 million TEU during the first 11 months of 2021, a 30 per cent year-on-year increase, according to the latest figures from China’s National Development and Reform Commission (NDRC).
As a joint-venture between the railways of Russia, Belarus and Kazakhstan, UTLC handles around 80 per cent of all broad gauge traffic between China and Europe and has enjoyed booming demand this year, with volumes set to reach 675,000 TEU, up from 547,000 TEU in 2020.
UTLC chief executive Alexey Grom said the volume growth was largely due to the “stable position” of rail freight during the Covid-crisis, as more shippers turned to the Silk Road to circumvent bottlenecks in air and ocean.
UTLC said the value of goods it transported last year was over US$31 billion, but estimates this will increase to $45 billion this year, which is around five per cent of the value of all trade between Europe and China.
“The main goods transported from east to west are electronics, engineering products and spare car parts,” explained UTLC. “Today, more and more plastics, wood, textiles, optics, rubber goods, as well as luxury goods, complete this list.”
The operator acknowledged that rail only accounted for three per cent of freight movements between Europe and China, but claimed the mode would increasingly supplement the estimated 24 million TEU a year Asia-Europe ocean freight trade.
For example, Mr Grom said, boosting train speeds, alleviating border congestion, diversifying freight flows and improving network integration would allow further growth.
“If today we had all the necessary capacities at the European and Kazakh borders, the total volume of the transported containers could be 20 per cent more,” he said. “If you get high speed in one section, but at the same time there are difficulties in the section of connected infrastructure, all efforts are wasted.
“Integration of key players in the rail container market is required more than ever. Integration of infrastructure, technology and expertise are becoming key success factors for the Eurasian transport system.”
UTLC said its new 450,000 TEU capacity rail freight terminal in Kaliningrad would provide “great potential for growth”, due to its land and sea port multimodal connections, and this followed the Dostyk transhipment terminal on the Chinese-Kazakh border, which opened in June, with 700,000 TEU capacity.
There are other cargo opportunities to pursue, too, UTLC said, such as the “possibility of using rail for the prompt return of empty containers. The company offers special rates for this, which may be regarded as a kind of investment in the future growth of volumes from east to west.
“Also, the transport of food products from European countries can be another growth point.”