Rail freight from China to Europe is growing rapidly
Alongside air and sea freight there is now an increasingly attractive way of sending goods between
China and Europe: rail. The rail journey from terminal to terminal currently takes between 15 and 18
days for trains to transport containers from northern and central China to Europe. This transit time
is expected to come down to around 10 days in the near future. In this white paper we look closely
at the advantages of this method as well as the challenges.
Two decades ago, trade between China and Europe was still
in its infancy, a strong contrast to the situation today with
the two forming one of the largest economic partnerships in
the world. In this short time, the two have become financially
interdependent and no one can imagine it coming to an end.
Optimising supply chains between China and Europe
The physical distance between China and Europe is large, and
can be a challenge for businesses wanting to optimise their
supply chains when it comes to transit times and costs.
As sea freight offers the lowest costs, it is currently the
preferred method of shipment to and from China. However,
transit times are long, so when there is a need to save time
then air freight comes into play, even though the costs are
In the past few years, rail has positioned itself directly between
sea and air, being less costly than air freight and faster than
shipping by sea.
Rail service is now available directly to many countries in
Europe, in some cases with the last leg of the journey being by
truck or short sea routes.
China is investing heavily in Rail Freight
In order to strengthen economic ties with Europe, the Chinese
government has revived the overland route between Europe
and China over recent years.
There are two main routes for freight trains, with a number
of sub-routes. The southern route through Kazakhstan
and southern Russia is most suited for freight to and from
central China, for example the regions surrounding Chengdu,
Chongqing and Zhengzhou. The northern route through Siberia
is ideal for container transport for the northern regions around
Beijing, Dalian, Suzhou and Shenyang. In Europe the most
important terminals are Duisburg and Hamburg in Germany.
Rail is ideal for businesses whose goods have a lifespan that
is too short to allow shipment by sea. It is also interesting for
low-margin products where air freight is too costly.
In addition to full container loads (FCL), less than container
loads (LCL) have recently become available, with logistics
providers arranging the consolidation of several customers’
loads to make full containers. This makes rail an attractive
solution for smaller shipments.
Frequencies and volumes up
In 2017, the bilateral trade volume between Europe and China
as almost EUR 600 billion (source: EU). Although a relatively
small part of that was moved by train, the volumes are rising. In
2017 there were over 3000 goods trains between China and
Europe, a tenfold increase in just a few short years. Frequencies
are increasing, and new routes are coming online regularly.
An average goods train has 41 containers, equivalent to 9
Boeing 777s. But compared to ships, things look very different:
the largest container ships sailing today can carry more than
21,000 twenty-foot equivalent containers – equal to more
than 400 goods trains.
from door to door
When the same container is transported by more than one
method during a shipment, it is called intermodal transport.
Just as with air and sea freight, you need to take the pre- and
post-shipment movement of your goods into account with rail
too. For rail, you need to have the goods packed in a container
which can be rented at the rail operators’ container depot.
Compared to sea ports, rail operators have much smaller
depots. So you need to give careful consideration to the
transport to and from the depot as storage space there is more
limited. If your warehouse is close to the container depot, it
can be advantageous to move the goods by road to the depot
for transfer to containers there rather than renting an empty
container to load at your premises.
On arrival at the destination depot, the same applies in reverse.
The container has to be returned to a depot once you have
unloaded it, so you need to consider whether to unload the
container at the depot or to have the container brought all the
way to the final destination by road.
Speed advantages with rail freight
The transit time is around 10 to 18 days, depending on the
route. That is half the time it takes to move a container by ship,
especially since the introduction of “slow steaming” in order to
save fuel. Thanks to these shorter transit times, businesses can
react more quickly to changing market demands.
In addition, shorter transit times leads to more rotations and
thus less stock in the supply chain. In other words: businesses
can free up working capital and lower their capital costs.
Cost savings on interest payments on stock are another
consequence. Rail is therefore an attractive alternative to sea
freight for high-value electronic goods, for example.
Cost advantages with air freight
A train is of course slower than a plane, but on the other hand
the transport costs are much lower. Businesses whose goods
literally “miss the boat” from China have previously been
obliged to book expensive air freight to get their goods to their
destination on time. Rail now offers a solution for getting goods
to Europe which is several times cheaper than air.
How do the costs look for rail compared to air and sea? Of
course, it depends on the departure point, destination and
volume, but a simple rule of thumb is that transporting a
container from door to door by rail is twice the price of sea
freight and a quarter the price of sending the goods by air. This
is partly thanks to the Chinese government keeping rail costs
A 40 foot container can hold 22,000 kg of goods. By train the
cost will be around USD 8000. By sea the same load would cost
around USD 4000 and by air € 32,000.
More environmentally friendly than air freight
Sea freight remains the most environmentally-friendly method
of transport, but the CO² emissions are significantly lower than
for air freight, an argument which is becoming increasingly
That the rail link between China and Europe has a future is
shown by the announcement made by President Xi Jinping at
the beginning of November 2015. He revealed that China was
willing to invest US$ 40 billion in the rail link between China
and Europe. The money is being pumped into the Silk Road
Fund and used to give financial support to Asian countries
wanting to invest in rail infrastructure on the route.
And China is investing more and more in its own terminals and
rail lines. Investments which will mean even shorter transit
times and even lower costs.
More possibilities are on the way. In future, reefer
(refrigerated) containers will be able to be used on a much
greater scale. Perishable goods, such as flowers and fruit, will
be able to be handled more efficiently as a result. Currently,
air freight is the primary means of shipment, which is an
The potential for shipping non-standard size containers and
dangerous goods is also being looked into.
Some countries along the route are subject to sanctions or
boycotts by European countries and vice-versa, which means
that some goods can be subject to prohibitions for certain
countries. The Russian infrastructure is also very old and the
level of investment much lower than in China, for example.
There is also the fact that several borders between countries
without mutual trade agreements need to be crossed. So in
order to avoid delays, it is essential that paperwork be in order.
Whenever goods are shipped by train, there are large ambient
temperature differences over short time periods which need
to be taken into account. In China it can be very warm, while
in Russia well under freezing. These temperature changes can
cause problems for some goods.
Rail can be a reliable, fast and efficient alternative to existing
methods of transport. You can also save money compared to
air freight and see efficiencies for your stock costs compared to