Transit times New Silk Road back to normal, what’s the secret?
If you asked industry experts to define the New Silk Road in 2021, the key word was congestion. Two months into the new year, congestion seems to have decreased, and trains are able to make it from China to Europe with fairly reasonable transit times.
Trains between China and Europe have seen transit times of less than twenty days, after a long period of what was described as a mess on the New Silk Road. “It is worth mentioning that currently the transport time to Poland is less than 20 days for several weeks, and last week we recorded the first two trains that arrived in Małaszewicze within 14 days”, said Jakub Walczak from C.H. Robinson.
For a long while, transit times of more than 30 days between the continents were all but unusual, and some even argued that sea shipping would be faster for as long as congestion was plaguing the corridor. The main reason cited was an increase in demand, while popular border areas were not able to deal with the sudden rise in numbers. As a result, cargo was sometimes stalled at the border for days.
Now, the border crossing from Brest (Belarus) to Malaszewicze (Poland) is currently really fast, says Martin Koubek from Metrans. “We are able to do it within one day. The reloading in the terminal Europort is also very fast.”
“General speaking, it takes 14-22 days from China to Poland,and 18-26 days from China to Germany”, says Louis, COO of the Chinese forwarder TopRail. “The congestion on the New Silk Road is moving away.”
Why the change?
Why this sudden change in a situation that just a few months ago seemed as endless as the corridor itself? Most industry experts attribute this to the fact that there is currently less cargo volume on the corridor. This is part a result of the Chinese New Year celebrations. China has just returned from this festive period, during which production traditionally slows down.
According to DB Cargo Eurasia, the situation started improving in January already, just before the Chinese New Year. As Koubek argues, then came Chinese New Year, and then the Olympics. “There is a visible slowdown.”
Back to sea
Another reason industry players give for the slowdown is the fact that sea shipping prices are returning back to normal. During the pandemic, sea shipping fees rose skyhigh, as many sailings were cancelled and the pressure on the supply chain increased. It is partly due to this phenomenon that cargo shifted to the rails, where trains kept on running.
Although many would have loved to see this cargo remain on the rails, the numbers do indicate a gradual reversed shift to sea freight. “The decrease of ocean freight rates and the relatively sufficient space have also had a certain impact on the volume of railway cargo.
Not bad news
Some of the goods originally shipped via ocean were relocated to railways, but when the ocean freight market was relieved these flows returned to the sea”, says Chinese forwarder THI.
But, if this results in better transit times, one can’t deny the benefits. Because 20 days may sound good, but it is not the ideal transit time for a rail journey, the experts agree. “If there is no congestion, the train time to Germany is about 14-16 days”, says THI.
“To further improve the transit time on the Eurasian Corridor, it is necessary to invest in the infrastructure and the digitalisation of the Eurasian Corridor”, DB Cargo Eurasia believes. The operator believes that more volume should be handled, but with more capacities at the nodes. “Poland-Belarus-Russia/Kazakhstan/Mongolia to China is heavily utilised. Especially on the border crossings where the transshipment and custom and border procedures take place.”
According to THI, this should come from both sides of the corridor. “The ports in Europe need to improve their reloading capacity and simplify customs procedures. China needs to do some prevention measures in advance and pay more attention to the market chaos or the sudden increase of the number of westbound trains. China has already restricted the departure of trains from small rail stations and due to reduced subsidies, trains from small rail stations might have begun to withdraw from the market.