Xinhua Finance Frankfurt, January 9 (Reporter Shao Li) Xinhua Finance reporter recently learned in the survey that as more and more shipping companies have suspended navigation in the Red Sea indefinitely, German logistics companies have turned their attention to the China-Europe train, and are eager to look forward to the resumption of the southern route. Some experts pointed out that there are economical solutions to improve the timeliness in the short term in the southern corridor.
The deterioration of the security situation in the Red Sea has not only led to rapid costs of sea transport**, but also capacity has become strained as most container carriers now choose to detour Africa. Logistics experts warn of bottlenecks in the coming weeks.
According to the Shanghai Container Freight Index (SCFI), compared with the beginning of December 2023, the global average freight rate has increased by 876%, which has more than doubled the low (end of September 2023) set by the current round of shipping** after the epidemic.
European importers' shipping of goods imported from the Far East has risen dramatically. For example, at the end of December 2023, the freight rate of a standard container from China to Europe by the shipping company DSV has been nearly four times higher than that in mid-October.
France's CMA CGM Group announced that from January 15, the cost of shipping a 40-foot container from Asia to the Western Mediterranean will be from $3,000** to $6,000.
According to professional estimates, about 12% of the world's merchant ships (including oil tankers and bulk carriers) pass through the Red Sea, and the proportion of container ships is particularly large. Almost one-third of the world's most important containers pass through this area.
According to the Kiel Institute for the World Economy in Germany, two-thirds of Germany's imports from East Asia are transported through the Red Sea. At present, this part of the international ** is suffering from the impact of delivery delays and large freight rates**.
According to Marco Forgiona of the UK's Institute of Export and International**, the diversion of cargo ships will not only increase fuel and insurance costs, but will also likely lead to congestion and further delays at the ports of stop.
Logistics information service providers such as project44 are expecting shortages of items in the coming weeks. According to the American company's **chain analysts, retailers do not take into account additional delivery times due to unforeseen events when planning inventory. From February, the depletion of stocks will become apparent.
Since mid-December 2023, some large German companies have begun to ask the freight ** merchants of the China-Europe Express about the situation of the southern corridor. Thomas Kowitzki, the person in charge of global freight transportation in DHL, Germany, made it clear that he intends to divert sea cargo, hoping that the China-Europe freight train can quickly improve the timeliness of the southern corridor.
Dong Wanxu, the head of the China-Europe freight train and the head of the trans-Eurasian train operation in Germany, told Xinhua Financial Reporter that the freight volume of the main line of the train transiting Russia has increased after the aggravation of the Red Sea crisis, but due to the impact of EU sanctions, many dual-use and advanced technology products cannot be transported through the railway transiting Russia. The willingness of German customers to return to this route is still not strong, but the demand for the southern passage is high.
Data from Eurasian Railway Logistics JSC (UTLC ERA) shows that in 2022 after the outbreak of the Russia-Ukraine conflict, the traffic volume of China-Europe freight trains transiting Russia fell by one-third from the previous year to 400,000 TEUs. With the decline in sea freight ** and the recovery of transportation timeliness, it will further decline to about 1140,000 TEUs.
Data provided by Germany's Duisport Group also shows that the number of scheduled weekly trains has dropped by about a third compared to 2019.
The German branch of Yuxinou also confirmed that the number of outbound trips of China-Europe trains has not changed much, but the impact of EU sanctions on the return goods of China-Europe trains is still very large, and there are still very few goods by railway.
It is understood that in the fourth quarter of 2022, as the international shipping ** and transportation time returned to the normal level before the epidemic, the freight of the China-Europe freight train in EU countries was significantly diverted, especially the southern channel with a long transportation time (40 days to 60 days), which was basically suspended at the end of the year.
Cao Guanzhe, director of the Asian business department of the German duisburg port group, pointed out that the freight rate of the southern channel of the China-Europe freight train is high, and there is not much difference from the normal shipping time. There are also many track changes and at least two reloads during transportation. Some high value-added products have a high risk of collision during loading and unloading, and ensuring the quality of goods is also challenging.
However, he also said that duisport is optimistic about the development prospects of the southern route and is already involved in the construction of the southern terminal in Turkey and Italy.
A study funded by the European Commission for Reconstruction and Development (EBRD) also suggested that the Trans-Caspian Corridor from Khorgos through southern Kazakhstan is the most sustainable transport link between Europe and Central Asia. According to the study, the construction of the entire corridor will require about 18.5 billion euros in hardware and software investment in the five Central Asian countries alone.
Some experts in the logistics industry are worried that the infrastructure construction of the Trans-Caspian Eurasian corridor according to the EU's plan will have a large investment and a long cycle, and it may be far away to improve the transportation efficiency of the channel and reduce freight costs. Especially in the case of low sea freight, the operational risk after completion should not be underestimated. The southern route of the China-Europe Railway Express should first focus on an economical plan that breaks the bottleneck of key links and has little investment and quick results.
Dong Wanxu pointed out that there are two main bottleneck problems in the southern passage of the China-Europe train, one is that the crane resistance of the two Caspian ports in Aktau (Kazakhstan) and Baku (Azerbaijan) is seriously insufficient, and once the wind reaches level 5, it can no longer operate, and the local windy climate; Second, there is a shortage of railway cars between Baku (Azerbaijan) and Poti (Georgia), and the local demand that the return journey cannot be empty, resulting in long waiting times (sometimes up to two weeks). In addition, the low number of Black Sea vessels from Poti to Constanta (Romania) (every 10 days) should also be addressed as a priority.
Industry experts point out that as the traditional corridor between Asia and Europe continues to be interrupted by geopolitical events, sustainable transport corridors between Central Asia and Europe are increasingly attracting the attention of large merchants and logistics companies. If the southern route of the China-Europe freight train effectively solves the key bottleneck problem, there is a possibility that the transportation time will be shortened to about 20 days in the short term.
It is reported that relevant enterprises are currently actively seeking the support of international financial development institutions such as Silk Road ** for the above projects.
While many experts believe that there is little risk of a new chain disruption triggered by the Red Sea crisis, it is more likely that there will be a medium-risk scenario, that is, the transfer of shipping will continue for at least a few months before the security situation can stabilize.
Logistics service provider project44 has warned that shipping companies are unlikely to resume Red Sea shipping anytime soon, given recent developments.
Editor: Tan Rui.
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