How rail traffic to Central Asia makes way for the China-Europe Express
Due to congestion at New Silk Road border crossings, Chinese National Railways issues one traffic stop after the other, but all came with the note ‘except for the China-Europe Express’. The only decision to stop the entire traffic flow at the end of October was withdrawn before implementation. The policy preference for the China-Europe Express is an open secret in the industry, and the transportation needs of the countries along the route seem to be forced to make way. Central Asian countries seem to bear the brunt.
Railway is an emerging transportation product between China and Europe, and is considered an efficient alternative to traditional sea and air transportation. However, for the landlocked countries of Central Asia that have no access to the sea, railways may be the only transportation option other than trucks in cross-border trade. As early as before the advent of the China-Europe train, railways transported most of the import and export cargo in the region. How are they coping with the dominance of Eurasian trains through their territories?
Take Kazakhstan as an example. At the China-Kazakhstan border, there are thousands of trucks loaded with grain, minerals, raw materials, etc. waiting to cross the border. Most of these are import and export goods between China and Kazakhstan. There are two reasons for this situation: one is the squeezed transportation capacity to preserve the transit cargo between China and Europe, and the other is the reduced transit efficiency due to increasingly stringent pandemic prevention regulations.
According to the Kazakhstan Business Investment Platform, the merchants who carry out trade between the two countries are facing huge losses, even bankruptcy, and the subsequent sharp rise in the prices of building materials and other products. End of October, frustrated Kazakh businessmen pressured the government to stop the China-Europe express train from crossing the border until the border issue was resolved. A grain and oilseed trader explained to Today: “A cart of flaxseed is worth 21,000 U.S. dollars, and a cart of electronic components to Europe is worth between 800,000 and 1 million U.S. dollars. The only solution is prohibiting transit goods to put pressure on China.”
Containerisation of cargo
RailFreight learned from a Chinese sunflower seed exporter that China gives priority to European cargo and container cargo at the border. However, grain is usually transported by gondola, covered wagon or tank wagon. If container transportation is used, the loading procedures will be more complicated, and a lot of space will get lost. He explained: “A covered cart can hold 58-62 tons while a container can only hold 26.5 tons. For the same freight, shippers are naturally unwilling to use containers.”
“Furthermore, most of Kazakhstan’s railway facilities are not designed for container transportation, not to mention the shortage of containers and car plates. The supporting facilities alone are not enough to containerise all goods”, he continued.
Central Asia Express
The situation of the Central Asia train is not better than that of non-containerised cargo, and most of the stop-of-traffic orders at the border also apply to the Central Asia train. Because most of the goods shipped to Central Asian countries are grains or low-value consumer goods, they are naturally different from the electronic products, automobiles, and spare parts shipped to Europe. An industry insider revealed: “As a result, there are very few development plans approved. Sometimes countries with small markets like Mongolia are dominated by big cities, and local food cannot be shipped out.”
In addition, if you carefully observe the current Central Asian routes on the market, you will find that due to the lack of all-rail plans, some operators have even launched a sea-rail combined transport programme that bypasses Russian Far East ports.
Make wedding dresses for others
Most of the China-Europe trains have to transit through Kazakhstan. Although this share is decreasing with the development of alternative routes, it still accounts for about 70 per cent of the total cargo volume. When transitcargo is thriving, there is limited space for the import and export trade of the transit country. This ‘making of wedding dresses for others’ will naturally cause dissatisfaction. This is true in Kazakhstan, and other countries in Central Asia with slightly underdeveloped economies are in no better situation.
“The policy preference for China-Europe Express trains may be a last resort. The only way to solve this problem is to increase the capacity of railways. The expansion and installation of new railroad tracks and corresponding facilities on the China-Kazakhstan border is not difficult. It depends on how the decision makers of the two countries negotiate and advance”, the source concludes.