China’s First Freight Train

Air freight, sea freight . . . and rail freight? A logistical look at the first direct freight train from China to the UK and what this means for importers.

Although China offers a railway service that transports freight to other countries, including some in Europe, until now China Railway did not have connections to the UK. This year, however, the first train traveling directly to London from China has set off.

The first train has started its journey, carrying a cargo of millions of pounds worth of clothes, bags and other household items. China has developed this train in an effort to strengthen trade between China and Europe, returning to and improving the well known trade route the Silk Road.

Although it is one continuous route, there are different rail gauges in different countries – which means that there’s no single train that can run along the whole route. This means that along the way containers will have to be reloaded at various stages.

The route, known as the New Silk Route, is a 12,000 mile journey that takes 2 weeks to complete. This mode of transport has a much faster transit time than sea freight, which can often take over a month – but it’s also cheaper than air freight which is the fastest, but more expensive, option. This positions the freight train as a happy medium between the two.

However, as great an option as this sounds, we’re not entirely sure that it’s going to prove as easily accessible as its alternatives.

The main concern? Space. Cargo ships used for sea freight can carry more than 18,000 20ft containers – each. Think of all the ships that set sail every day containing all of these containers. The China to London rail only travels once per week and has nowhere near the capacity.

To put it into perspective:

In a year the railway moves an equivalent of 85,000 20ft containers.

If a cargo ship can carry 18,000 20ft containers in one voyage, in a year the freight train moves less containers than 5 ships.

Hundreds of ships set sail from China every day – this means that in a single day, cargo ships transport multiple times the amount of goods the train has the capacity to move in one year.

The freight train’s capacity is purely not large enough to significantly support the demand. In fact, the convenience of railway travel may prove attractive to the larger businesses – which means that you can expect all the space to be taken up by a small number of large contracts. This could lead to inflated prices or sheer inability to get your goods on board.

To summarize, we believe that rail could be a great solution in the future – but we’re only making baby steps at the moment. Due to this, our opinion remains that without some radical improvements to capacity we don’t think it’ll become the backbone of trade between China and Europe any time soon.

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