The European Silk Road Summit 2024 kicked off today in Vienna, with already many interesting debates taking place. One of the main takeaways from this morning’s sessions is that transit times for sea shipping between Europe and Asia are increasing, opening up more possibilities for rail freight. However, without reliability, it remains hard to convince customers to use the railways.
According to a panel of speakers including Mingyi Zhao from Tiedada, Thomas Kargl from Smartlog, Alona Tobrak from DB Cargo Eurasia and Stefaniea Klermund from InterRail Europe, Eurasian sea freight transit times are currently around 50 or 60 days. On the other hand, when everything goes smooth, rail journeys between Chinese and European hubs can take as little as nine days, the panelists argued.
As long as transit times remain around 16 days, rail freight can be considered a very valid alternative for Eurasian transport services, Tobrak added. These times can mostly be achieved by using the northern route via Russia, which still brings some restrictions due to the sanctions. Such performances are less likely along the Middle Corridor, despite increasing interest in it, Klermund argued.
Eastbound-westbound imbalance and live tracking
Other issues upon which all speakers agreed are the imbalance between eastbound and westbound volumes and the demand from customers to track their cargo in real-time. Currently, much more volumes are moved from China to Europe and CIS countries than vice versa. This poses various obstacles, including when it comes to rolling stock repositioning. If most of the traffic goes from east to west, most of the rolling stock and terminal equipment will be deployed for these volumes, reducing their availability for west-to-east services.
Concerning real-time tracking of cargo, the issue is more layered than it might initially appear. Kargl explained that the main bottlenecks regarding live-tracking have traditionally been in Europe. “In wide-gauge countries customers were informed twice a day”, he pointed out.
Moreover, customers moving temperature-sensitive goods need to use fuel to keep the reefer containers on. If a train has to unexpectedly stop for hours or even days, this increases the needed fuel and thus the customer’s costs. For other sectors, time is more of the essence due to the volatility of markets and prices changing quite quickly. Delays and disruptions might cause worse financial outcomes for customers.