China-Russia rail volumes set to drop despite recent monopoly
With eighty per cent of international freight trains leaving China ending up in Russia, as several Chinese rail platform companies confirm, China-Russia volumes have sort of monopolised the Silk Road lately. 2023 has undoubtedly been the heyday of China-Russia trains; however, recent data shows this might not last long.
China Railways Wuhan Bureau confirmed with Russian media that 80 to 90 per cent of China Europe trains transported via Wuhan found their destinations in Russia. RailFreight.com talked with another two major China Europe Express consolidation centres, and the results are similar.
Xi’an Free Trade Port said they also operated 80 per cent of the trains heading to Russia. Another anonymous consolidation centre said their Russia-oriented trains reach 70 per cent, slightly lower than the other two. The numbers align with what European counterparts experience: “Volume from China to Europe that ends in Malaszewicze has dropped over 60 to 70 per cent,” said Miłosz Witkowski, rail freight director of Polish Forwarding Company.
Volumes might drop
Nevertheless, the China-Russia rail volume fever is already experiencing a cool-down that might intensify even more. According to NSR Intermodal, the current transport demand from Russia has not increased, at least in rail, resulting, thus, in free space in block trains and lowered rates. Trains departing from Chengdu have experienced a price drop of about 15 per cent, something not noticed in other consolidation centres yet. Nevertheless, NSR Intermodal said that an overall price decline following decreased volumes is on the horizon.
Bria Liu, the founder of TopRail, added that as the Ruble’s exchange rate sinks further, Russia’s buying power drops. As a result, she does not expect demand from Russia and, respectively, rail freight volumes to peak this year, as opposed to previous years where peak seasons, especially around major holidays, used to be a thing.