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The New Silk Road: Challenging the Shipping
Industry
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• ENS is an acronym for ENtry Summary Declaration.
• ENS is required by EU customs to do a security assessment of all cargo entering EU ports• Carriers can use their discretion as to the quantum of the ENS charge
Less than ten years ago, the idea of rail cargo
between China and the EU was…bar talk; at best.
However in 2016, according to The Economist, in excess of 500,000 tonnes shipped by rail from a variety of Chinese rail hubs into an equally large variety of EU destinations as far west as Dublin. Should ocean carriers be worried?
There are different thoughts on this.
Container Freight Pricing Transparency With One Platform In Real Time & On Demand.
No. They should not be worried:
Chinese government subsidies to build additional rail-freight capacity will end in 2020, and no follow-on private sector companies have indicated interest to finance any continued expansion.
Maersk CEO Soren Skou told The Economist that while trains may take away some future growth from ships, it would not affect not their existing business
Yes. They should be worried:
Kazakhstan’s national rail company, KTZ, says by 2020 it will have capacity for 1.7m containers annually to pass through the country between Europe and China
A complete modernization of the existing main three rail routes from China to Europe would provide capacity of 3 million TEU’s- similar to today’s ocean shipping, rates will be used to attract cargo, which would come at the expense of ocean and air.
The cargo shipped is hi-value cargo such as computers, frozen foods, alcohol, auto parts, and pharmaceuticals, most of which are currently ocean cargos; if these higher-rates cargos leave, the ocean carriers will have mega ships carrying low-priced cargos such as copper scraps – and remember China recently banned most other scrap items, which is already freeing-up east-bound capacity.
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Facts to Consider
There are two main routes between China and the EU. The Yuxinou Railway links the southwestern Chinese city of Chongqing with Duisburg, Germany. It passes through Kazakhstan, Russia, Belarus and Poland before arriving Duisburg
The Yuxinou train is operated by Trans
Eurasia Logistics, a joint venture between
DeutscheBahn and Russian Railways.
Chongqing is the hub, collecting cargo from
Chengu, Xian, Lanzhou, and Urümqi.
Chongqing-Duisberg transit takes only 13-16
days, as compared to the approx. 36 days
(assuming no slow-steaming) ocean
transit.
Another rail line is the Yiwu - Madrid Railway, running from Yiwu to Madrid with a 21-day transit.
Growth in the China-Europe rail freight market has been rapid and increasing, with Dublin now the 16th European city now served by direct trains from China, joining destinations in Germany, Poland, the Netherlands, Belgium, Italy and Spain on a transcontinental network of more than 40 routes.
The Poland route suffers from massive congestion as there is only one rail line available. Inside Russia and the ‘stan’s, the containers need to be unloaded-reloaded due to gauge differences between the countries
