BAKU, Azerbaijan, October 27. Increasing rail freight rates put pressure on economies, the official at International Transport Forum at the Organisation for Economic Cooperation and Development (OECD) told Trend.
The official said that Asian countries account for just over one-third (36%) of the European Union’s total trading volume. In 2011-21, the value of Eurasian trade almost doubled from EUR 383 billion to 696 billion.
“Over that period, the share of rail freight increased from 0.6% to 2%. Rail freight costs less, and is more reliable and faster: trains take 15 to 20 days, ships 45 to 60. Almost twice as many rail freight routes than five years ago link China and Europe: 78 rail lines from Asia reach 180 cities in 23 European countries. China-Europe express trains operated more than 1 000 trains per month in 2020–22,” they said.
In their words, more Asian countries, most recently Viet Nam, are now connected to Eurasian rail corridors. The International Union of Railways estimates the potential growth rate of rail cargo on the Eurasian routes to be between 10% and 16%.
“The main freight route between Asia and Europe has been the Northern Corridor, or New Eurasia Land Bridge. Its rail link connects China and Europe via Kazakhstan, Russia and Belarus. It dominated due to the uniform track gauge and harmonised legal regime of the Organization for Co-operation of Railways (OSJD). When the Ukraine war brought sanctions and uncertainty, transit on the corridor plummeted. As these disruptions persist, they further intensify the problems created by fuel price increases, land-transport capacity constraints and port congestion, such as higher transport costs and more delays,” the official said.
Moreover, the official said, insurance companies started to refuse coverage for shipments via the Northern Corridor.
“Increasing rail freight rates put pressure on economies. Most Central Asian countries transport 40% or more of their freight by rail. Being landlocked, they are particularly vulnerable to changes in land-based Eurasian supply chains. Higher transport rates also drive up costs for producers and consumers, hampering economies: forecasts have lowered 2022/23 growth projections for the region by 2 to 10 percentage points,” they concluded.