Polish freight forwarder: Sino-Europe railway transport will grow again this year

Recently, there has been an increase in discussions about the decline in the freight volume of China-EU trains to Europe last year. "Will the China-Europe train become the China-Russia train" is not only our own question, but also our European counterparts are looking for answers. Polish freight forwarders also have words about the changing trend of China-EU railway freight volume in 2023.

The Polish freight forwarder Symlog believes that although the freight volume of China and Russia is rising rapidly and the freight volume of China and Europe is decreasing, this does not mean that China Europe trains will give way to China Russia trains. Bartosz Miszkiewicz, president of Symlog, has a clear judgment: "Connecting China and Europe is one of the main goals of China's the Belt and Road initiative."

Advantages of China-Europe Express at this stage

For shippers, the attraction of China-Europe Express at this stage lies in the stable transportation efficiency. Bartosz Miszkiewicz said that compared with the period of the epidemic, the average time from the Chinese station to Malashewicz in Poland is 15 days.

"From the time we receive the goods, to the time we send them to our warehouse, to complete customs clearance, and then to the customer, we can say that the door-to-door transportation time is stable at 22-24 days."

"The congestion is significantly less than before. You don't have to wait for the free time when the railway enters the station. You can book the seats from week to week. Even during the Spring Festival, many stations in China have been sending trains to Europe."

Is the decline of goods volume related to the pursuit of diversification of European supply chain?

Some people believe that the decline of the cargo volume of the China-Europe train to Europe is related to the search for suppliers outside China in Europe and the diversification of the supply chain of European enterprises. But Bartosz Miszkiewicz disagreed with this view: "The process of (supply chain diversification) has indeed begun, but it involves a very limited number of consignee and goods in Europe."

"On the one hand, around the new Silk Road, the capital integration and commercial connection of countries have been very deep. On the other hand, it is difficult to replace the existing transport corridor with a new route to achieve large-scale goods flow. The example of the middle corridor can well illustrate this point."

What is the development trend of railway transportation from China to Europe in 2023?

Bartosz Miszkiewicz said: "In my opinion, it is very difficult to achieve recovery in the first half of this year. This is the result of the economic slowdown of the countries in the euro area and the reduction of consumption under the conditions of high inflation. However, the supply and import will increase because the warehouse stock of European enterprises is being consumed, and many semi-finished products are almost in short supply for a long time, such as the parts of the European automobile industry."

"Therefore, the growth of the China-EU train is only a matter of time. I bet that the growth will be realized again this year."

How does the decline of sea freight affect the railway?

Now that the freight rate has declined, does it make railway transportation lose its appeal?

The Polish freight forwarder executive said: "Before the epidemic, the market situation was very similar to the current one. The railway freight was about US $6000 per 40 foot box, and the sea freight was US $1500-2000. Although the price and delivery time were different, both sea and rail transportation could find customers."

"At that time or now, some customers turned to railway to transport goods, because the delivery time of railway is 2.5 times faster than that of ship on average. This is an important advantage for many importers, and this advantage will be further strengthened with high inflation. In short, customers will come to this conclusion by carefully calculating the cost of capital over a period of time."

Dynamic changes in the structure of cargo sources of China-Europe railway

The Polish company also observed the changes in the supply structure of the China-EU train in recent years.

Bartosz Miszkiewicz said: "In the period after the outbreak of the epidemic, medical equipment was transported in large quantities, and the transportation of electronic products was small, because China's production almost stopped. In the period after the outbreak of the Ukrainian war, generators became one of the main new goods, which is an urgent demand of the local energy industry in Europe."

"During the Christmas and New Year holidays, due to Poland's more investment in renewable energy, the transport of heat pumps began to flourish. Now, the demand for solar panels made in China is also increasing. In addition, customers also hope to import a large number of new energy source batteries and battery packs, but the carrier is still waiting for the relevant decision to determine whether there is a technical taboo for such goods to be transported by rail."

"In addition, from China to Germany, the Netherlands and Scandinavia, we observed a significant increase in the import of electric vehicles."

Finally, he also mentioned the cross-border e-commerce sector that maintained sustained growth.

"In Poland and other EU countries, this is a growing group of importers and trading companies. Considering this customer group, we have been developing warehousing logistics for several years. As the demand for e-commerce remains strong, we also plan to expand the logistics park and customs warehouse near Warsaw in April to increase the storage area of 6500 square meters."

The above and other factors are the reasons why the Polish freight forwarder still believes in the future development of the China-EU train.