Shanghai International Shipping Institute

CONTAINER rail freight between China and Europe has increased to the point were volumes strain infrastructure and tax the ability of documentation processes to cope, reported IHS Media.

Director Jing Men of the European Union-China Research Centre at the College of Europe in Bruges said containers using the China Railway Express were expected to grow 15 per cent per year for the next decade.

"By 2027, total throughput will reach 636,000 TEU, with cargo increasingly shifting from sea and air to the rail routes," Mr Men told a forum on the Belt and Road Initiative: EU-China Logistics and Supply Chain in Bruges, Belgium.

The conference was organised by the College of Europe and the European Shippers' Council.

According to academic Thierry Vanelslander from the University of Antwerp's department of transport and regional economics, US$2.5 billion worth of goods have been shipped from China to Europe since 2011 mainly due to the geographic location of Chinese factories.

"Introduction activities have been pushed inland because of rising labour costs and as part of the 'Go West' campaign of the past. Big cities have been booming in western China such as Chongqing," said Mr Vanelslander. "HP [Hewlett Packard] has shipped more than four million notebook computers to Europe by rail since 2011 using the Chongqing-Duisberg rail route."

A big player in the land bridge sector is DB Schenker, the logistics arm of German rail operator Deutsche Bahn.

DB Schenker CEO Jochen Thewes said the number of trains to and from China and the volume of freight they carry was developing at breakneck speed. During the first six months of the year, the volume of containers transported on its routes increased to 40,600 TEU, and the figure was anticipated to hit 82,000 TEU by year-end.

However, such growth presents challenges. China's head of economic development for the western region at the National Development and Reform Commission Minglong Tang told the forum that one per cent of the total China-Europe trade volume was transported by rail.

"This has two meanings - there is great potential for the rail market, and it shows that we have a lot of challenges and difficulties to resolve," he said.

Mr Tang listed the challenges as a lack of infrastructure, especially in Russia and Kazakhstan, the need for three track changes from standard gauge in China to a wider track in Russia and back to standard in Europe.

"What increases the running time and the costs. At the same time, the train passes through different customs and all their different procedures, which also increases time and costs," he said.

"Many countries also do not respect the same treaties, and the waybills can be quite different and the documentation processes, too. The waybills also have to be in different languages, which is also complex."