context: Demand for the China-Europe Railway Express has been high amid the pandemic due to interrupted sea routes and cost surges in air freight. Commentators advocate a more sustainable development model, but the recent congestion points to capacity limits that place a ceiling on expansion.
Since late June, China Railway has asked China-Europe Railway operators to cut frequencies or halt trains beyond regular schedules, reports 21st Century Business Daily. The surge in outbound trains this year have exceeded refitting capacity at Xinjiang’s land ports (CP note: trains refitted for different gauges in neighbouring countries). There are also fewer inbound trains as Chinese operators cannot subsidise returning empty trains operated by overseas firms.
Customs clearance efficiency is affected by problems encountered in transitioning towards a paperless system. But efficiency is expected to improve once the new system runs smoothly. The congestion may last until mid-July, according to an insider.
Problems in the network, according to Xu Mingying 许英明 MofCOM (Ministry of Commerce) Research Institute associate researcher and Li Xin 李鑫 Tianjin Normal University professor, include
- low efficiency
- multiple refitting required throughout the journey
- poor infrastructure in central Asia and Eastern Europe
- limited refitting capacity at land ports
- inconsistency in regulations and customs clearance procedures in different countries requiring many documents
- redundant routes
- 90 per cent of trains pass through Brest (Belarus) and Malaszewicze (Poland)
- domestic routes are similar, even western cities detour via Manzhouli (land port with Russia in Inner Mongolia)
- capacity at final destinations (e.g. Duisburg, Hamburg) and en route near saturation
- heavy administrative burden
- exchange of documentation not yet digitised
- manual verification costs time
Xu and Li recommend
- cooperating with the EU’s ‘Three Seas Initiative’
- helping expand logistics networks in Slovakia, Hungary and Romania
- pushing the integration of international railway regulations
- building overseas warehouses in countries en route
- developing a digital information management system