Towards the end of the year, the traditional Chinese New Year holiday is approaching, and the transportation market usually has a peak season. The Sino-Russian railway transport market, as an important international logistics channel, often ushers in business peaks at this time. However, this year's peak season seems to be a little uneventful compared to previous years.
The increase in freight rates has fallen, and the trend of 2024 is deeply analyzed
According to industry sources, compared with the past, the increase in container freight rates this year has not reached the expected level. Before the pandemic, freight rates increased by 15%-20% during the peak season at the end of the yearIn 2021-2022, when the epidemic was raging and the ** chain was unstable, this increase once soared to 30%-40%. This year's peak season saw an increase of only 10%-15%.
Seasonality and loss of capacity
Nikolai Olshansky, general manager of Modernway, which focuses on cross-border transportation between China and Russia, said that this year's freight rate increase is constrained by seasonal factors. Rail train shipments in Russia's Kaliningrad region were scheduled to be reduced in December, resulting in a loss of some capacity. At the same time, cooperation with Chinese stations was reduced by 10% due to the reduction of shipping schedules.
Currently, a 40ft container rate is increasing by 10%-15% and we don't expect any further**.
Weak demand and fierce competition
Olshansky noted that the demand for import container transportation is slightly weaker compared to previous years. Rail transport is facing increased competition from the shipping market this year, while a significant increase in demand has not yet been observed.
Regarding the changing trend of the Sino-Russian railway transport market after the New Year, the Russian manager believes that "after the year, it should return to the level of October this year, and it is possible to reduce it by another 10%-15%." ”
The multimodal transport market is changing, and freight rates may be declining
The multimodal transportation market has changed in a highly competitive environment, with numerous operators entering the market compared to a year ago. In the case of relatively stable overall growth in freight volumes, freight rates may decline due to increased competition.
How shippers and practitioners should respond in 2024
For cargo owners and practitioners, Olshansky recommends paying close attention to the global container shipping market, especially the state of competition between Chinese railway policy and ocean carriers in Russian ports. In a highly competitive environment, it may be wiser to plan carefully and adjust your transportation strategy in advance.
Olshansky concluded by pointing out that the global container shipping market is expected to continue to show a trend of low freight rates and continued growth in vessel capacity. In this case, container freight rates in the rail transport market are also unlikely to grow significantly. However, special freight rate changes may still depend on the intensity of competition between Chinese railway policy and Russian port ocean carriers.