China-Europe rail shipping growth slows as Ukraine war pushes companies back to the seas

China’s railway authorities have been coordinating with foreign counterparts to open new routes to Europe

But alternative rail routes cannot handle the same volume of freight traffic, and experts say it is forcing some firms to ship goods by slower maritime routes

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The China-Europe Railway Express has been operating and expanding since 2011. Photo: Xinhua

Published: 5:58pm, 29 Jul 2022

After a decade of rapid expansion under the umbrella of heavy government subsidies and political blessings from Beijing, the China-Europe Railway Express that provides an alternative to ocean freight between Asia and Europe may be showing signs of stagnation, with Russia’s invasion of Ukraine bringing unprecedented challenges.

In the first half of 2022, a total of 7,473 trips were made along the Eurasia route, also known as China Railway Express (CRE), up just 2 per cent from the same period last year, according to figures released this month by the state-owned China Railway Group.

Meanwhile, the number of 20-foot containers transported reached 720,000, up only 2.6 per cent, year on year.

In the previous years, neither of the yearly growth rates had dipped below 20 per cent, according to data from the China Railway Container Transport Corporation, which operates under China Railway.

In the past two years, the coronavirus pandemic, which has snarled port operations globally, has caused massive shipping delays and sent sea freight costs soaring. And this has served to increase the appeal of rail transport among importers and exporters.

This year’s decrease in the growth rate is specific to trade between China and Europe, according to Marco Raimondi, an editor with RailFreight.com, an online publication for rail freight professionals.

“In fact, the routes involving Central Asia are currently flourishing due to an increase in the volume of goods moved,” Raimondi said in an article this month.