Showing posts from tagged with: Rail Freight

Boom in European Rail Freight Leads to Congestion on the Tracks

While in spring 2017 exporters shipping product in containers to Deepsea markets experienced serious delays and cost escalations while the shipping lines and terminals sought to cope with handling significantly larger vessels and changes in schedule arising from the establishment of new vessel sharing alliances, the focus is now shifting to problems with freight by rail in Europe.

The continental rail system is being put under increasing pressure. Ports including Rotterdam and Antwerp are seeking to relieve congestion at the quayside by establishing inland terminals and shifting significant container volumes by rail to these, with the cargo going onward by rail to final destination. Road congestion and increasing pressure for shipment by low-carbon systems are also significant factors. The European Rail Freight Association (ERFA) has expressed concerns that rail freight terminal development designed to meet the increased traffic volumes is, in fact, adding to the congestion and is pushing freight traffic back onto the roads.

Over the last five years or so a number of Shippers and Forwarders involved in the movement of higher value goods between Asia and Europe have introduced rail freight services linking a number of Chinese locations with main centres in Europe, particularly, the port of Duisburg. At the end of May 2017, the Journal of Commerce calculated that there were 53 weekly trains into Europe and 23 headed back to Asia. Last year 40,000 containers moved by rail between Asia and Europe and DB Schenker estimates that this figure will grow to over 100,000 by 2020. Other sources put the 2020 figure at over half a million forty-foot boxes on the rails.

The major driver for the growth of this mode of container freight is the time/cost equation involved.  A 40ft container door to door cost from China to a European destination would cost in the order of USD 3,000 using ocean freight and the transit would take at least 33 days, the same shipment by rail would cost about USD 8,000 and would arrive in between 12 and 25 days. The same cargo movement by air would cost about USD 37,000 and would take about 7 days.

However, the congestion now occurring at European rail terminals as well as at some of the rail gauge interfaces further east, is worrying carriers as, already, these delays are accumulating to five to six days.

Clearly, it is impractical to operate rail freight trains linking China directly with Ireland but a number of operators are now using the system with Ireland bound containers being shipped through terminals such as Duisburg.

Rhenus Logistics | | 0 comments