RailFreight.com recently organised the second edition of the rail freight end-of-year market survey, with dozens of industry players responding and providing their perspectives on how the sector did in 2024 and what to expect in 2025. When it comes to Eurasian traffic, the market remains rather split on future expectations, but pessimism slightly dominates the mood.
One of the big questions that remains in the world of rail freight is whether or not the Middle Corridor will succeed as an alternative to the Northern Corridor, which enables China – Europe traffic by transiting Russia. The Middle Corridor faces many challenges compared to the relatively efficient northern alternative, such as the many border crossings and the necessity of traversing the Caspian Sea by ferry.
Respondents of the RailFreight.com survey are somewhat split on what to expect from the Middle Corridor by 2030. Approximately 42 per cent believe that the route will become an efficient transport route for Eurasian trade by that year, overcoming the abovementioned challenges, whereas nearly 58 per cent do not believe so.
Many respondents indicate that five years in the world of rail freight is a short time, and that the Middle Corridor will need more time to develop. A more likely timeframe for success, as various participants indicate, is 2040.
Volatility and external shocks
The sharp drop in Eurasian rail volumes following Russia’s invasion of Ukraine showed that the Asia – Europe rail industry is volatile and sensitive to external shocks. While rail transit through Russia has picked up again, future developments are hard to predict. The sector believes that geopolitics will be the biggest challenge to the sector in the coming five years, with 36 per cent highlighting it as a hurdle to overcome.
A second hurdle to clear is competition with other modalities. Earlier, market experts predicted that container shipping rates would embark on a downward trend in 2025. Shipping companies have been on a “vessel purchasing frenzy” due to the Red Sea crisis. The subsequent expected overcapacity should push maritime shipping rates downward. This could prove to be a major headache for rail freight companies operating on the Asia – Europe market, who may see their competitiveness decline and volumes shift to sea shipping.
Containers
Simultaneously, close to two thirds of respondents believe that container shortages in China are having a negative impact on demand for Eurasian rail freight services. Notably, lots of Chinese containers enter Russia with imported commodities, but Russia does not export enough back to China to return the containers at the same pace. For that reason, Chinese shipping companies need to buy new containers to keep up the flow as old containers get stuck in Russia.
All in all, market parties rate the future outlook for Eurasian traffic at a 5,2 out of 10. Most respondents hover between ratings 4 and 7, indicating that there is a rather neutral view of the coming year’s developments.