China-Europe: railways are congested and container rates are spiking

Image: Shutterstock. Vladimir Tretyakov

China-Europe trade corridors are currently facing some significant issues concerning container rates as well as congestion along the railways. Concerning rail freight, congestion concerns the ​​Alashankou and Khorgos border crossings between China and Kazakhstan. Moreover, some issues are starting to surface at the Małaszewicze border crossing in Poland.

Rail congestion is having a serious impact on travel times for freight trains running from China to Europe. “The impact is between seven and ten days delays, with a peak of 15 days reached three weeks ago”, a source told RailFreight.com. The delays are also impacting estimated times of departures from China, with a delay of two to four days.

Ocean freight rates are spiking too

Other than congestion along the railways, ocean container rates in China have been on the rise over the past month, with an increase of up to 88 per cent between April and May 2024. For example, Container xChange reported extremely high prices for 40ft containers. Some are arguing that this trend is quite similar to what happened during the COVID-19 pandemic. “The business re-started in April, but vessel capacity is still very tight. Thus, some westbound volumes shifted from the sea onto the railways.

The situation is drastically different for eastbound volumes as the ocean container rates are at -250 US dollars, making it extremely cheaper than rail freight services. According to industry sources, the lower rates for eastbound services are caused by the shortage of containers in China. In other words, Chinese carriers are paying shippers to transport their containers back to China so that they can be reused for westbound services.

As various sources from the industry confirmed to RailFreight.com, this spike in price is connected to a container shortage in China. “Factories are having orders up to 4 months now”, one of the sources stated, adding that rates are skyrocketing both for China-Europe and China-USA/Mexico/Brazil. Additionally, tariffs and taxes on Chinese automotive and electric vehicle (EV) imports in Western countries are also expected to reduce vessel demand. For this reason, some Chinese manufacturers are considering relocating their production sites close to the West to bypass these tariffs. “Manufacturers are hastening to ship EVs to avoid impending tariffs and uncertainties”, said Container xChange.

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Author: Marco Raimondi

Marco Raimondi is an editor of RailFreight.com, the online magazine for rail freight professionals.

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China-Europe: railways are congested and container rates are spiking | RailFreight.com

China-Europe: railways are congested and container rates are spiking

Image: Shutterstock. Vladimir Tretyakov

China-Europe trade corridors are currently facing some significant issues concerning container rates as well as congestion along the railways. Concerning rail freight, congestion concerns the ​​Alashankou and Khorgos border crossings between China and Kazakhstan. Moreover, some issues are starting to surface at the Małaszewicze border crossing in Poland.

Rail congestion is having a serious impact on travel times for freight trains running from China to Europe. “The impact is between seven and ten days delays, with a peak of 15 days reached three weeks ago”, a source told RailFreight.com. The delays are also impacting estimated times of departures from China, with a delay of two to four days.

Ocean freight rates are spiking too

Other than congestion along the railways, ocean container rates in China have been on the rise over the past month, with an increase of up to 88 per cent between April and May 2024. For example, Container xChange reported extremely high prices for 40ft containers. Some are arguing that this trend is quite similar to what happened during the COVID-19 pandemic. “The business re-started in April, but vessel capacity is still very tight. Thus, some westbound volumes shifted from the sea onto the railways.

The situation is drastically different for eastbound volumes as the ocean container rates are at -250 US dollars, making it extremely cheaper than rail freight services. According to industry sources, the lower rates for eastbound services are caused by the shortage of containers in China. In other words, Chinese carriers are paying shippers to transport their containers back to China so that they can be reused for westbound services.

As various sources from the industry confirmed to RailFreight.com, this spike in price is connected to a container shortage in China. “Factories are having orders up to 4 months now”, one of the sources stated, adding that rates are skyrocketing both for China-Europe and China-USA/Mexico/Brazil. Additionally, tariffs and taxes on Chinese automotive and electric vehicle (EV) imports in Western countries are also expected to reduce vessel demand. For this reason, some Chinese manufacturers are considering relocating their production sites close to the West to bypass these tariffs. “Manufacturers are hastening to ship EVs to avoid impending tariffs and uncertainties”, said Container xChange.

You just read one of our premium articles free of charge

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Author: Marco Raimondi

Marco Raimondi is an editor of RailFreight.com, the online magazine for rail freight professionals.

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