Rail freight China proves most shock-proof modality

Rail freight traffic in China has proven to be shock-proof. Even in the month of Februray, which was dominated by the coronavirus and all its consequences for the logistics industry, the rail freight volumes recorded an increase compared to last year. Moreover, now that cargo is starting to move across the country, it is trains that get filled up first and fastest.

China Railway, the state-owned railway operator, said in a statement on Sunday that total railway freight amounted to 310 million tonnes in February, a rise of 4.5 per cent from a year earlier. This was reported in the South China Morning Post. The newspaper added that in the same month, China’s factory and service sector activity had sunk into deep contraction, according to the National Bureau of Statistics (NBS).

Surprisingly stable

In February, the logistics industry was hit hard by the outbreak of the coronavirus in China. Whereas factories remained closed for a large part of the month, freight transport was severely limited, if only because of the lack of first and last mile services.Yet, China loaded 171,000 railway cars per day on average last month, a daily increase of 4,945 from a year earlier, said China Railway. Container freight on railways surged 39.5 per cent to 26.61 million tonnes, it added.

Indeed, if anything is shipped out of China, it is rail that proves most successful. February saw the gradual re-start of several rail freight services, and with the beginning of March, more lines to and from Europe have been resumed. All in all, the situation is getting better and better, said Tomasz Langowski of Langoswki Logistics, a company with long-term experience on the New Silk Road.

More departures

“A major improvement is that we have been able to resume our services from Zhengzhou. The westbound train to Hamburg, Munich and Liege is back on track with scheduled departures.” Together with the entire province of Hubei, where the outbreak is most severe, the city of Zhengzhou remained closed for all rail freight traffic until the end of February. Hubei province remains closed for all freight traffic but urgent supplies until at least 10 March.

“We are fully back to the office. The situation is slowly improving, we have around 50-60 per cent of the trucks back on the streets by now. This means we are now able to get some cargo moving. However last week we still had heavy congestion as the rail terminal would just release a couple of containers per day”, says Marco Reichel from Shanghai-based Crane Worldwide Logistics.

Modal advantage

Of course, the positive developments are also noticed by the sea and air freight industry. However, there are still some hurdles on the road for these modalities. For air freight, the prices have gone up exponentially, due to less availability of cargo space in the month of February. In sea shipping similar price increases are expected next month, as there will be a serious capacity crunch once everything is up and running. More importantly, these products will need to be delivered to the market as fast as possible, and this is where rail comes in, industry experts have explained.

“Due to the COVID-19 outbreak and the resulting blank sailings and cancelled flights, Chinese ports and airports are congested. Rail transportation is a feasible alternative to sea or air freight. The rail journey from terminal to terminal currently takes between 11 and 15 days from northern and central China to Europe. Transit time from Europe to China is slightly longer at 18 – 20 days”, says DSV, a logistics firm for sea, air and rail freight.

“A lot seems to be going via rail at the moment, because air freight is too expensive and sea freight is still restrained. On the other hand, rail remains fairly stable. We have not sees major price increases so far”, adds Igor Tambaca of RailBridgeCargo. According to Tambaca, this can be explained by the fact that rail freight is more regulated in China, whereas sea freight is a commercial industry.

Author: Majorie van Leijen

Majorie van Leijen is editor of RailFreight.com, online magazine for rail freight professionals.

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