The China-Europe Railway Express Has Been Disrupted: Chinese Manufacturing Urgently Shifts To Sea Transportation
The China-Europe Railway Express has been disrupted: Chinese manufacturing urgently shifts to sea transportation
"We have decided to ship our new containers by sea." " Chen Xinping, a hat trader from Yiwu, told reporters on September 22 that goods originally destined for Europe via the China-Europe Railway Express have been forced to seek alternative destinations.
Recently, the closure of the Polish port has led to the disruption of the China-Europe Railway Express, which has drawn much attention and inevitably affected China's cross-border e-commerce and imports and exports. Facing the most crucial stocking season of the year, freight forwarders and foreign trade enterprises are seizing the opportunity to respond. However, seasonal goods may also miss sales opportunities due to the delay of transportation time.
As the most important land freight passage connecting China and Europe, the China-Europe Railway Express passes through Russia and Belarus and then arrives at the Malaszewicze hub in Poland, where it is then distributed to over 220 cities in 26 European countries. Among them, the "Yiwu-Xinjiang-Europe" route was first launched on November 18, 2014. Subsequently, 26 routes have been opened, covering over 160 cities in more than 50 countries including the UK, France, Germany, Spain and Russia, starting from Yiwu, Zhejiang Province and finally arriving in Madrid, Spain.
On September 17th, two China-Europe freight trains fully loaded with daily necessities, electrical components, new energy equipment and other export goods departed from Yiwu West Railway Station one after another. Currently, these two batches of goods have not yet "entered the site".
Public reports say that according to the estimation of the European Railway Freight Association, nearly 90% of China-Europe freight trains need to enter the EU through Poland, and Malaszewicze is almost the de facto eastern gateway to the EU. This also means that about 300 trains fully loaded with electronic products, auto parts, photovoltaic modules and other goods are stranded in Belarus, and the overall cost of the supply chain has significantly increased.
Wang Zhicong, director of the Marketing Department of Shenzhen Kapoklog Logistics Co., LTD., which mainly serves the European market, told reporters that some customers have already requested to switch from railway to sea transportation. The sea transportation takes about 60 days, which is nearly double the 30 to 40 days of railway transportation. "If you are in a hurry to replenish the goods, you will have to switch to air transportation."
According to statistics from Hangzhou Customs, in the first eight months of this year, the export value of Christmas products from Zhejiang Province reached 12.89 billion yuan, an increase of 11.9% year-on-year. Among them, the export volume from June to August reached 10.42 billion yuan, accounting for 80.8% of the total. As the world's largest distribution center for Christmas products, Yiwu exports over 20,000 types of Christmas products to more than 100 countries and regions around the world every year. A responsible person from Yiwu Customs, which is affiliated with Hangzhou Customs, said that this year's "Christmas export season" has been significantly advanced, with the export volume in May alone increasing by over 90% year-on-year.
Kapoklog Logistics, which provides overseas warehouse services, told Yicai Global that the disruption of the China-Europe Railway Express has had a relatively small impact on its customers. As the freight is higher than that of sea transportation and the delivery time is not much faster, most e-commerce businesses still choose sea transportation for low-priced goods. In addition, some electronic or battery-powered goods cannot be dispatched via the China-Europe Railway Express for at least four months each year. "The temperature is too low in winter, and some goods cannot withstand it."
Although it still cannot compare with sea transportation in terms of overall freight volume and proportion, the number of China-Europe Railway Express trains and standard containers has been increasing continuously in recent years. According to data from China State Railway Group, in 2024, 19,000 China-Europe freight trains were operated and 2.07 million TEUs were sent, representing year-on-year growth of 10% and 9% respectively. The Central Asia Railway Express operated 12,000 trips and sent 880,000 TEUs throughout the year, representing year-on-year growth of 10% and 12% respectively. The Western Land-Sea New Corridor freight trains sent 960,000 TEUs throughout the year, an increase of 11% year-on-year.
In terms of China-Eu trade, China will be the EU's largest source of imports in 2024, accounting for approximately 21.3% of the EU's total imports, while China will be the EU's third-largest export market, making up about 8.3% of the EU's total exports. At present, more than a quarter of the trade products between China and Europe are high-tech products, and the trade of green products such as lithium batteries, new energy vehicles and photovoltaic modules is growing rapidly.
According to Kapoklog Logistics' observation, during the peak season in the fourth quarter of this year, the inventory volume of overseas merchants was relatively normal, "the inventory volume for a normal peak season". Tariffs basically had no significant impact on shipment volume and profit margin. Most of the increased costs were passed on to American consumers through price adjustments.
Song Lei, the founder of Shenzhen Kapoklog Logistics Co., LTD., told Yicai Global that their goods are mainly transported by sea. However, the disruption of the China-Europe Railway Express and the shift of more goods to sea transportation are likely to push up the sea freight prices in the coming period. However, the goods for this year's peak season have already arrived and are not affected for the time being. In the future, when ocean freight rates increase, we can only "adapt flexibly".
Recently, the demand for China's export container transportation remains relatively weak. The market freight rates on ocean routes continue to adjust, and the decline in the comprehensive index has expanded. The Shanghai Containerized Freight Index released by the Shanghai Shipping Exchange on September 19th dropped by 14.3% compared with the previous period. Due to factors such as sluggish growth in transportation demand, spot market booking prices continue to decline. On September 19th, the market freight rate (including ocean freight and surcharges) for exports from Shanghai Port to basic ports in Europe was 1,052 US dollars per TEU, a decrease of 8.8% compared to the previous period. The market freight rates for exports from Shanghai Port to the basic ports in the West and East of the United States were $1,636 /FEU and $2,557 /FEU respectively, representing a decline of 31.0% and 22.7% compared with the previous period.
The customer is also very anxious. Kapoklog Logistics said that if the containers are changed from the China-Europe Railway Express to sea transportation, the transportation time will be extended by about 40 days. "Seasonal products may affect sales." Air transportation can save time, but its profits cannot support such high transportation costs.
