Maritime lines raise prices and there are no space available on vessels. What are the options?

As container lines announce their General rate increase plans and implementation dates, the transport of containers by high-speed trains to China is rising. As the result of these GRI’s there might be speculation of space and price from freight forwarders. So the natural question is “What should I do?”. Nevertheless, there are possible solutions. It is possible to transfer part of the urgent cargo flow of goods to rail transport, with the necessary quantities being transported quickly, and major freight flows will still have to be carried by sea, as the space on trains is limited.

Number of trains to and from Europe

According to the latest data published by the National Rail Group, in 2019, between China and Europe there were 8225 trains, including 3110 trains to Europe and 2,711 trains to China; 1118 trains went to Russia while the return train volume was 988; another 297 trains went to Belarus with one return journey. In 2020 there is about 45% higher demand and quantity of trains. To my knowledge, about 80 trains are currently leaving China with destination Europe, but the return is still significantly lower.

In recent years, the National Railway Group and some Chinese cities have consistently implemented various policies to promote the development of returning trains. The total return on trains has evolved faster than in previous years. For example, some Chinese platforms have consistently begun trips back loaded with wood. However, the organisation of the supply chain for return trains still faces significant difficulties.

Comparisons between railway and sea carriers

From a quantity perspective, the monthly volume of imports by rail is about 45000 TEU. And this quantity is equivalent to the quantity of cargo that can be transported by the world’s two largest ships, HMM Algeciras and HMM Copenhagen, on a single voyage. You can read more about these monsters here.

However, in the world, according to the 2020 January. there were about 53000 merchant vessels, of which about a tenth is container. Which amounts to almost 24 million TEU, notes the portal Alphaliner.

Today, rail transport wins at speed, although it is not possible to transport large flows of cargo. However, as demand increases, prices for train transport are also rising.

Future forecast

In the case of imports, demand increased significantly due to the consumption of certain product groups caused by Covid19. That wave is felt today. Uab Onze’s freight capacity by rail has practically doubled, there is a severe lack of space and customers are deliberately trying to pay more so that only their cargo will leave faster.

Secondly, with train numbers rising by almost 50 per cent by 2020, this trend will continue in 2021. There will also be an increase in trains from Europe to China, as train operators will continue to partially subsidise this backward route.

Wood cargo is already going to China

One good news is that timber cargoes have begun to travel to China. This will balance freight flows.

The train has always been a faster and more expensive freight transport channel, so it is gratifying that even for low-value goods, the level of rail prices has become buyable. However, for shipments to China, the permissible weight of the cargo is regulated and the consignor may not exceed it.

Save your time

So in this world, where time = money, save your time and look for new opportunities. Today, in this situation in container shipping, the transport of containers by high-speed trains to China is very popular. Of course, getting space and container on firts departing train might be a challenge, but it will be much faster than sea transport and almost as fast as air transport.