The recent attacks on the Red Sea lead to increased demand for rail shipments from China through Russia to Europe, offering an alternative amid maritime route disruptions.
The Red Sea attacks by Houthi forces have triggered a notable surge in demand for rail shipments from China through Russia to Europe, offering an alternative as maritime routes face disruptions. Freight forwarders and consolidators report a sharp increase in inquiries and bookings, with the “middle corridor” rail route through Kazakhstan gaining attention as a substitute.
Air cargo volumes on the key Vietnam-Europe apparel route spiked by 65 percent in the week ending January 14, according to freight rate data platform Xeneta. While rail routes via Russia represent a relatively small portion of containers moved between the Far East and Europe, they have seen an increased interest.
RailGate Europe, a group of consolidators, has experienced a rise in demand for its rail services, attracting businesses in various sectors. Rail shipments from China through Russia offer a transit time of 14 to 25 days, proving significantly faster than ocean routes.
Despite concerns about goods passing through Russia, the rail route has gained momentum, particularly since the Red Sea attacks. The Lunar New Year, starting on February 10, is anticipated to further stimulate demand for alternative transportation methods.
Rail Bridge Cargo, a Dutch logistics company, reported a 37 percent increase in China-Europe rail route bookings over the past four weeks. Shippers, in response to the Red Sea disruption and impending Lunar New Year, are opting for rail shipments, even if it involves traversing part of Russian territory.
While the “middle corridor” through Kazakhstan offers an alternative, its longer transit time of 26 to 29 days has prompted some businesses to choose the more time-efficient rail route through Russia.
Concerns about supply chain disruptions persist, with experts predicting the Red Sea crisis to impact global trade for months or possibly the entirety of 2024. The prolonged disruptions may lead to increased costs and favor U.S. exports over the long term, altering trade dynamics between Europe, Asia, and the United States.
