Freight transport between Europe and Asia is a vital element in the relationship between the two continents and between the countries, for economic dynamics and social requirements. Maritime transport has the biggest share in transport services, while rail transport is starting to be attractive thanks to new projects and solutions that will attract new freight flows to railways from maritime or air lines. Every year, new services are launched on Europe-China route while countries upgrade and expand their transport infrastructure to consolidate their position on the Eurasian transport map.
The European Union is the biggest trade partner of China, while China is the second biggest trade partner of the EU. Trade between the two parties are worth EUR 1 billion per day. In January-November 2017, EU exports to China reached EUR 108.7 billion, 18.4% more compared to the same period of last year, while imports from China to EUR 342.6 billion, an 8.5% increase. In 2016, China and the EU adopted a new strategy to consolidate relations over the next five years based on the “win-win” cooperation concept, the increase of mutual economic and political benefits, as well as fair competition among all cooperation segments.
Under an intense cooperation that would stimulate economic growth for both parties, EU and China’s joint communication (of 2016) stipulates that “EU is China’s biggest trading partner, representing about 15% of China’s trade, and an attractive and secure destination for its outward direct investment. China needs the EU as much as the EU needs China.”
Transport quality, safety and efficiency are very important elements in the process of delivering goods to companies or end customers. The improvement of infrastructure connections between EU and China will significantly stimulate economy for all parties involved, the EU-China Connectivity Platform being an element that should create synergies between the EU policies and projects and the “One Belt, One Road” initiative, launched by China.
China will have to meet its objectives within the initiative, an open international platform that would observe market regulations and international norms to provide benefits to those concerned and to encourage the economic behaviour of third countries. Under these circumstances, cooperation has to observe relevant policies and the application of standards and regulations and to guarantee equal conditions for European and Chinese economic operators. This will also have to apply in countries outside the EU which committed to implement the European regulations. The main objective is to create interoperable and sustainable cross-border infrastructure networks, especially in the countries and regions between Europe and China, partners from Asia and Central Asia which participate in the integration of international traffic flows.
For trade, especially international trade, transport and distribution are key elements. Due to the development of industrial poles in Asia and Europe, the growth potential of transport is estimated at 25% per year. Concerning the transport modes, we could say that maritime and rail transport are competing, from the point of view of the loading and delivery times, distance, quantity and quality of services and so on. Currently, the predominant mode of transport between Europe and Asia is maritime transport, due to shorter distances and costs. In the EU, there are currently over 1,200 trade ports in 23 countries, this being the key point for the global trade network handling three quarters of EU freight trade with non-member states and over one third of intra-EU transport.
Transport alternatives between Europe and Asia include the maritime route via the Sues Canal, Cape Route, Northern Sea Route, the average travel time ranging between 30-45 days (according to distances, distribution centres etc.)
For railway transport, travel time is an important element of this transport mode, as it takes significantly less time to travel between the two destinations: for example, some services on Europe-China route take less than 12 days (Shenzhen – Minsk, regular rail services operated by DHL). Although rail transport between China and Europe is still limited and has a modest share in international long-distance transport, it has a huge development potential. According to UNECE’s EATL study (Euro-Asian Transport Linkages project), nine Europe-Asia routes have been analysed by comparing maritime to railway transport. For all situations, conclusions show that rail transport is more efficient than maritime transport and in five of the nine scenarios railway transport has bigger performances than maritime transport in terms of both costs and time.
Russia, a key role
Rail transport between the two continents relies on routes such as Trans-Mongolian, Trans-Siberian, and Baikal Amur.
The Trans-Siberian is one of the routes that are most used as, thanks to its branches, it is the most important rail connection between Europe and the Far East which could account for 4% of the freight volumes, especially from the north of China. Stretching on 10,000 km, the corridor provides access to the railway networks of China, Mongolia, Russia, to Europe crossing Poland, Belarus, Hungary and Germany. The travel time of goods is reduced by around two thirds: for example, from China to Finland, the travel time using this corridor is of less than 10 days compared to 28 days by maritime transport. Time on this corridor could also be reduced due to the fact that around 90% of the route is on Russia’s territory where railway modernisation projects are carried out. The country allocates massive investments to rail infrastructure every year.
The Baikal Amur route complements the Trans-Siberian and provides Eurasia, through Russia, another rail connection to Asia-Pacific region, but also to the European side. To increase volumes and traffic, last year, Russia granted USD 1.7 billion to both corridors. This year’s initial investment was estimated at around USD 850 million. To benefit from the transit of freight between Europe and China, Russia is willing to invest USD 43 billion in the modernisation of rail infrastructure as traffic is expected to increase, especially since Russia has 15% of trans-continental volumes within the Eurasian Economic Union.
According to the declarations of Alexander Misharin, First Vice President of Russian Railways (June 2017), this year, Russia plans to launch high-speed freight transport services as technical and design requirements for rolling stock have been completed. He said that Sinara, Siemens and CRRC were working at the project of a 12-car high-speed freight train capable to carry both passengers and freight using containers designed for volumes of 300 tonnes. The objective of the project is to attract freight volumes, for some specific types of goods, from air to railways. If the project proves successful, the train travel time between Europe and China will be of two days and, in some cases, even faster than air transport. In October 2017, Misharin underlined that RZD continues the high-speed project (for the freight train), and the freight volume between Asia and Europe could support the delivery of freight services on Moscow-Kazan high-speed rail corridor with extension to Berlin. Thus, Russia could be the promoter of high-speed freight transport services with a significant contribution in the rail freight transport market between Europe and China.
Beside the launch of freight transport services, the countries that have a good geographical position in Europe-China traffic are implementing several projects for the modernisation and extension of the infrastructure.
Next to Russia, with massive infrastructure investments, Iran is trying to promote the North-South Corridor from Bandar Abbas to Helsinki through Moscow, making possible connections from the north of Europe to South-East Asia, crossing countries on 7,000 km of multi-modal corridor. In the initial phase, the corridor would have a capacity of 5 million tonnes which is expected to increase to 10 million tonnes per year. As part of the project for the promotion of the corridor, Iran has received a USD 500 million loan from Azerbaijan for the construction of Rasht-Astara segment. Through an agreement recently signed between the Azerbaijan and Iran, the two parties agreed to equally finance works (USD 500 million each), construction works on the 164-km section being scheduled to begin this year and due in three years. Works to the North-South Corridor include the development of the three segments in Iran connecting the city of Qazvin to the border city of Astara. Qazvin-Rasht section is almost completed and will be inaugurated, Rasht-Astara railway will be built over the next years, while Astara-Astara railway will be commissioned soon.
On the same map of Eurasian transport, Turkey is launching the construction of logistics centres, such as that in Kars, part of Baku-Tbilisi-Kars corridor opened to passenger traffic since October. The authorities estimate that the terminal will be put into operation this year ensuring the handling of 412,000 tonnes of freight per year. The first container train was put into service on BTK at the end of December 2017. The train left Kokshetau (Kazakhstan) to Mersin Port (Turkey). The distance of 5,435-km was covered in 10 days and the train also used the ferry line from Kuryk Port to Ayat, and from there on the BTK corridor.
Moreover, Azerbaijan implements projects aimed to increase capacity and to deliver efficient services in Eurasia. For example, Azerbaijan has recently launched the modernisation of a small, but important 8-km line section between Tovuz and Qovlar, a section of Baku-Boyuk Kesik mainline, part of BTK, on which 435 km were upgraded. Recently, the Asian Development Bank has approved a USD 400 million loan to develop the rail system in Azerbaijan, of which USD 150 million will go to the rehabilitation of 166 km of railway, part of the North-South corridor.
The Trans-Caspian route (TITR) is also important for Europe-Asia traffic as it connects South-East Asia to China, via Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and from here to European countries. The project also includes investments in new terminals, as well as a 10-hectare terminal part of Astara-Astara railway project or Aktau Port terminal. The international route provides a multi-modal corridor of over 4,700 km between China, Kazakhstan, Azerbaijan, Georgia and Turkey and further to Europe, with a transit time of 20 days. The TITR project raises the interest of several companies and countries, Uzbekistan being one of the recent countries which announced their intention to participate in the project. An agreement has also been signed to involve Kuryk Port (Kazakhstan) in TITR, as associated member. Also, Azerbaijan, Georgia, Kazakhstan and Ukraine could establish a joint venture to introduce the “single window” principle in the transport of freight on the entire route, thus encouraging the use of railway services.
Freight trains are travelling from 16 to 20 days between Europe and China, which is, obviously, a lot better than maritime transport where the average travelling time on Europe-China route is around 45 days. Railway transport between the two destinations develops continuously, over 6,200 journeys on 57 routes being carried out since 2011. In the past six years, 35 Chinese cities and 34 European cities (from 12 countries) have been served by railway transport. 2017 was the year when trans-continental transport services development significantly to 3,270 journeys. According to the freight department of China Railway Corporation, the number of trains will increase to 4,000 in 2018.
According to UIC, freight traffic (maritime, air and railway) between the EU and five Asian countries will be of 25.6 million tonnes in 2017, compared to 11.1 million TEUs in 2016. As regards rail traffic, in 2027, traffic capacity will be of 636,000 TEUs with a significant share coming from the shift of freight from maritime to railway transport, representing 21 trains per day (82 TEUs per train in 2027). Growth potential includes bigger volumes and maritime-railway traffic shift. An air-railway traffic shift is also considered. By extension, 2030 estimates forecast a railway traffic of 810,000 TEUs.
Several rail transport services were launched last year between Europe and China and this year debuted with new projects too. A service on a new Europe-China route was launched this year between Xiamen and Budapest. Trains covers the 11,600-km distance between the two cities in 18 days carrying 35 freight containers worth USD 3.5 million. Xiamen city benefits from railway freight transport routes to five European countries, including Germany and Russia, with over 200 journeys operated in two years.
At the beginning of the year, a new railway transport service was launched from Guangxi Zhuang Autonomous Region to Europe with Poland as destination. The 11,000 km were covered in 18 days (no more than 20 days). Tests will be carried out by March to launch a train from Changchun (Jilin Province), crossing Hunchun and the Russian cities of Slavyanka and Khabarovsk, through the Trans-Siberian to Europe.
At the end of 2017, Gefco launched the first container train to France. Carrying 40ft containers from Wuhan (China) to Dourges (in the north of France), the train crossed Kazakhstan, Russia and Belarus, with services ensured by UTLC and further to Poland and Germany, covering 600 km per day.
Starting this spring, Nippon Express could launch a freight transport service between Japan, China and Europe by using the railways. The Japanese company, which provides logistics services, will frequently use the rail freight transport service from Shanghai, Wuhan or other Chinese cities to Hamburg and Duisburg. Freight from Japan will be carried using air or maritime services connected to the closest rail station in China from where trains will leave for Europe. The maritime-railway service will reduce costs by up to 60% compared to the air solution, while the air-railway combination will reduce costs by up to 40%.
A missing-gauge section
Technical features are still a problem of integration between trans-continental rail transport networks. Europe and China mostly have standard-gauge railways (1,435 mm), but the countries in the former Soviet Union have broad-gauge railways (1,520 mm). This situation causes delays of the transport services because of the cargo transhipment but encourages the use of containers. Although there are systems for the automated change of gauges (bogies that adapt to different types of gauges), the technology is expensive and only serves trains with passengers (in 2015, Russia put into operation a train for passenger services on Moscow- Nizhny Novgorod route; Moscow-Berlin service was launched in 2016 using Talgo trains equipped with gauge changing systems. Beside an automated gauge changing system, there are also alternatives to convert the infrastructure to a specific type of gauge or the so-called dual gauge railways, but just like the automated gauge changing systems, these alternatives are very expensive.
For developing traffic in the Eurasian area, there is the extension of the broad-gauge railway from Košice (Slovakia) to Bratislava, with access to Vienna, to around 400 km. The project also includes Vienna-Bratislava international centre. The railway will provide a continuous connection from Asia to the twin-city region Vienna-Bratislava, with a TEN-T connection. The railway project closes a missing link between the two big railway systems creating a connection between the Trans-Siberian network to Western Europe (the 1,435 mm-gauge network), the new railway being considered an extension of the Trans-Siberian Railway.
The broad-gauge railway will have a capacity of 18.2 tonnes in 2030 and will reach around 23 million tonnes by 2050 on the eastern side of the section, between the terminal near Bratislava and the existing terminal for US Steel, near Košice. The main factors that influence the increase of traffic are the development of traffic flows, but also the significant shift from standard-gauge railways and from road, maritime and inland waterways. According to estimates, by 2050, 40% of the transport volume of the broad-gauge railway will be the shift from maritime transport, 34% from road transport and inland waterways and 26% from standard-gauge railways. The trans-shipment process (between gauges) will take place in the Twin City Region Vienna-Bratislava terminus point (150 hectares) handling 21.5 million tonnes by 2050 and in the terminal located in the west of Slovakia, with a surface of 50 hectares. The project is worth EUR 6.49 billion and operation and maintenance costs will amount to around EUR 215 million. Construction works will be initiated at the end of 2024 and put into operation in 2033.
This article was published in the February issue of the Railway PRO Magazine, that analyses the latest and most important railway projects around the world.