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Shipping freight by Rail plays a crucial role in cargo transportation as it largely remains unaffected by adverse weather conditions such as rain, storms, or fog. Additionally, railway freight has consistently demonstrated excellence in punctuality, second only to air freight. Recently, substantial investments have poured into the railway sector, aimed at enhancing the quality of rail networks, improving infrastructure, increasing route efficiency, and optimizing terminal facilities.
Especially in the context of uncertainties surrounding container shipping and the escalating costs of air freight, railway freight, with its cost-effectiveness and reliability, is becoming an increasingly attractive option in cargo logistics.
Shipping Freight By Rail Market Situation
The global rail freight transportation landscape, as outlined by Mordor Intelligence’s report, reported a market valuation of $247.39 billion in 2020, with projections indicating a compound annual growth rate (CAGR) of 2% over the subsequent half-decade. The COVID-19 pandemic triggered a substantial surge in rail freight utilization globally, exacerbated by a concurrent scarcity of shipping containers and limited air freight capacity. This scenario compelled shipping firms to pivot towards rail networks for cargo conveyance. Notably, nations such as India and China are spearheading advancements, committing substantial resources to the creation of dedicated rail freight corridors and the technological modernization of this sector.
Integration efforts by logistics companies, aimed at connecting various transportation modes with railway systems, are fueling expansion within the intermodal transport sector. Factors propelling the market’s upward trajectory include escalating shipment volumes, the digital transformation of operations, and infrastructural enhancements. Rail freight’s surging preference can also be attributed to its cost-effectiveness and operational efficiency, enabling the carriage of substantial cargo loads across extensive distances. Amidst the myriad obstacles confronting road freight, logistics providers are increasingly leveraging both national and international railway systems to navigate these challenges effectively.
Countries Taking The Lead In The Rail Freight Sector
Presently, North America dominates the rail freight market landscape; however, forecasts indicate that within the next two to three years, the Asia-Pacific region is poised to surpass North America in this sector. Commodities frequently transported via rail freight encompass intermodal units, non-containerized goods, and liquid bulk cargoes.
Concurrently, the ratification of international trade agreements bolsters the volume of cross-border commerce. A prominent player in the realm of international rail cargo movement is the China-Europe freight train service, significantly impacting trade flows in Central Asia, Eastern Europe, and Sub-Saharan Africa. This rail corridor has not only rendered the logistics and transportation sectors in China and Europe more adaptable but also facilitated enhanced trading avenues between China and Northern European nations, in addition to reinforcing ties with Western Europe.
India emerges as another key investor in rail freight infrastructure, boasting the world’s third-largest railway network, with a daily operation of over 9,000 freight trains. The nation’s industrial progress has favorably influenced its logistics sector, positioning rail freight as a prime beneficiary of governmental financing. Furthermore, the Indian government’s emphasis on rail logistics initiatives is stimulating augmented private sector investment in the domain, fostering an environment conducive to innovation and expansion within the industry.
A Highly Competitive Rail Freight Market
The rail freight sector is a mature industry, characterized by both international and regional stakeholders, all vying for market share amidst fierce competition from air, road, and maritime freight segments. Amidst this landscape, nations worldwide are striving to bolster their railway infrastructures, often through collaborative efforts between governments and private enterprises.
Despite these challenges, the benefits of rail freight have been accentuated amidst the pandemic-induced volatility in shipping. It represents a cost-effective middle ground—less expensive than air freight yet faster than sea freight. Illustratively, the China-Europe rail route delivers cargo in a third of the time required for ocean freight, at merely a sixth of air freight’s cost.
A crucial differentiator lies in its sustainability quotient. Rail freight is recognized as the eco-friendliest among major transportation modes, significantly reducing carbon footprints compared to sea, road, or air alternatives. To illustrate, a China-North Europe rail consignment emits approximately 5 tons of CO2, a fraction of the 139 tons emitted by equivalent air freight. This environmental advantage resonates with consumers who prioritize green choices, thereby positively influencing corporate social responsibility (CSR) profiles of logistics firms and projecting them as environmentally conscientious and accountable businesses. Consequently, the appeal of rail freight extends beyond mere logistics efficiency, contributing to a company’s ethical branding and customer loyalty.
Which countries can China transport goods to by rail?
China is able to transport goods to many neighboring and European countries by rail, mainly thanks to a series of railway construction and international cooperation under the Belt and Road Initiative. Here are some key routes and accessible countries:
China-Europe Express: This is an important railway freight channel between China and Europe, connecting many Chinese cities (such as Chongqing, Chengdu, Wuhan, Changsha, Yiwu, Xi’an, etc.) with many European countries, including Germany, Poland, France, Spain, Italy, Belgium, the Netherlands, etc. The China-Europe Express passes through Russia, Kazakhstan and other countries, providing fast cargo transportation services.
China-Laos Railway: Since its opening at the end of 2021, China can transport goods to Laos via this railway line, and there are plans to further connect to Thailand, Malaysia and Singapore to form part of the Pan-Asian Railway.
China-Russia Railway: There is a long-term railway freight cooperation between China and Russia. Goods can be transported to the whole of Russia through ports such as Manchuria and Suifenhe, and even further to Eastern and Northern European countries.
China-Mongolia-Russia Economic Corridor: Through this corridor, goods can depart from northern Chinese cities such as Hohhot and Erenhot, reach Russia via Mongolia, and then go to Europe.
China-Central Asia Route: There are also rail transport routes between China and Central Asian countries such as Kazakhstan, Uzbekistan, Tajikistan, Kyrgyzstan, etc., which promote trade in the region.
China-Vietnam Railway: Although direct international rail transport services are limited, goods can be transported by rail to Pingxiang, Guangxi, China, and then enter the Vietnamese railway network through transshipment, and finally reach various cities in Vietnam.
In addition to these directly connected countries, China’s goods can also indirectly reach more countries, including some regions in the Americas, Africa and Oceania, through multimodal transport (such as rail plus sea transport), although this is not entirely pure rail transport. With the deepening of international railway cooperation and technological advancement, China’s international network of railway transportation is expected to continue to expand.
Cost of Shipping Freight By Rail
Rail transport costs from China to Singapore
China to Singapore rail transport costs
Rail transport from China to Singapore can be achieved through the Pan-Asia Railway Network, which involves starting from Kunming, China, passing through Laos, Thailand, Malaysia, and finally arriving in Singapore. However, it should be noted that the entire journey may require purchasing segmented tickets or arranging cargo transfers in different countries, as there is currently no direct service that only requires a single ticket for the entire journey.
Regarding the cost of personal travel, there is actual experience that the cost of rail travel from Kunming to Singapore costs about more than 1,200 RMB (about 230 Singapore dollars), but this is mainly for passenger transport. For freight, the cost calculation will be more complicated, involving freight for each section of the journey, possible transshipment fees (if the goods need to be transferred from one gauge train to another gauge), and possible tariffs and customs clearance fees.
As for the cost of freight transportation, due to the lack of direct public rate information, it is usually necessary to consult a professional freight forwarder or logistics company NEW SPEED based on the specific circumstances of the goods (such as weight, volume, and cargo category). We will provide quotes based on the latest market prices, transportation needs, and whether additional services are required (such as door-to-door, warehousing, insurance, etc.).
China to Thailand Railway Freight Cost
China to Thailand railway freight is a relatively new service. With the opening of the China-Laos Railway, goods can be shipped directly from China to Laos by rail and further connected to Thailand. However, the specific freight rates vary according to a variety of factors, including but not limited to the weight, volume, type, origin, destination, whether transshipment service is required, and the selected transportation service level (such as full container load FCL or less than container load LCL) of the goods.
There are currently no standard rates directly available, as freight rates need to be calculated individually based on the above details. Generally speaking, rail transportation is less expensive than air transportation and faster than sea transportation. It is a cost-effective and time-efficient mode of transportation. For example, some reports indicate that the cost of rail transportation may be a fraction of the cost of air transportation, while the transportation time is a fraction to half of that of sea transportation.
Rail freight costs from China to Malaysia
There is no direct cross-border rail transport service between China and Malaysia. Usually, goods are transported from China to Malaysia mainly by sea and air. However, there is mention of the “Asean Express” freight train, a railway transport project across Malaysia, Thailand and Laos, which will start trial operation in 2022 and is expected to be put into operation, which may open up new possibilities for rail transport between China and Malaysia. However, the specific cost information about this line is not clearly mentioned in the existing content.
If the “Asean Express” or similar railway lines are mature and support commercial transportation, the specific transportation costs will be determined by factors such as the weight, volume, type, starting and ending points of the goods, whether transshipment services are required, and whether additional customs clearance, loading and unloading and insurance costs are included. In order to obtain accurate rail transportation costs, it is recommended to contact the railway transportation company directly, international freight forwarders or use a dedicated freight calculator for quotation.
In addition, rail transportation costs are often adjusted regularly based on market demand, fuel costs and exchange rate fluctuations, so real-time quotes will be more accurate. If rail transport is not a direct option, multimodal transport (such as rail + sea or rail + road) is also a possible solution. Its cost structure will be correspondingly complex and requires comprehensive consideration.
Rail Freight Costs from China to Europe
The overall cost of railway freight from China to the Ekspres China-Eropah varies depending on the weight, volume, mode of transportation (full container load FCL or less than container load LCL), departure point, destination station, market demand and logistics service provider of the goods. The costs can be roughly divided into the following parts:
Basic freight: This usually includes the basic transportation costs from the departure point in China to the destination in Europe. For example, the transportation cost of a standard 40-foot container (FCL) may be between US$8,000 and US$10,000, while the cost of less than container load (LCL) is calculated based on the volume or weight of the goods.
Additional costs: May include pick-up fees, loading and unloading fees, transit fees (if passing through a third country), cargo insurance, customs clearance fees, and inland transportation fees within Germany.
Seasonal adjustments: Transportation costs may be adjusted according to seasonal demand fluctuations, such as the cost may increase during peak seasons.
Special service fees: If special services are required, such as temperature-controlled transportation, overweight or oversized cargo transportation, the cost will increase accordingly.
Exchange rate impact: Since fees are usually quoted in US dollars or euros, the impact of exchange rate changes must also be considered when making actual payment.
Railway freight costs from China to Central Asian countries
Rail freight costs from China to Central Asia also vary depending on a variety of factors, including the type of goods, weight, volume, starting point, destination city, whether special handling is required (such as refrigeration, dangerous goods transportation), and whether additional services are included (such as customs clearance, insurance, door-to-door service). Generally speaking, the cost calculation is based on each standard container (such as 20-foot cabinet or 40-foot cabinet) or based on the volume and weight of the goods.
Approximate cost range
For Full Container Load (FCL), the cost of a 40-foot standard container from China to Central Asian countries such as Kazakhstan, Uzbekistan, and Kyrgyzstan may range from US$3,000 to US$8,000, depending on the various factors mentioned above.
The cost of LCL (Less than Container Load) transportation is calculated based on the volume or weight of the goods, and the cost per cubic meter may range from hundreds to thousands of dollars.
Factors affecting costs
Route selection: Different railway routes and border crossings may result in differences in costs and transportation time.
Transport time: Express trains or special services (such as scheduled trains) may cost more than regular trains.
Market demand: During peak transportation seasons, costs may rise due to tight capacity.
Policies and subsidies: Sometimes the government or relevant agencies may provide subsidies or preferential policies that affect the final cost.
The cost performance of Shipping Freight By Rail
The cost performance of railway transportation is usually reflected in the following aspects:
Cost-Effectiveness: Compared to air and road transport, rail transport is much less expensive for long-distance and bulk cargo transport. Railway transportation can carry a large amount of goods while keeping unit transportation costs low. Especially for goods with heavy weight and volume, the cost advantage of railway transportation is more significant. For example, the National Railway Beijing Bureau’s freight rate reduction policy for port-city train transportation projects has provided corporate customers with 20% to 50% price discounts, significantly reducing logistics costs.
Transportation efficiency and reliability: Although railway transportation is not as flexible as roads, its punctuality and transportation efficiency are higher, especially in international transportation services such as China-Europe trains with fixed routes and flights, which can ensure that goods arrive on time. This Essential for supply chain management. The stable operation of China-Europe trains not only shortens the transportation time of goods between China and Europe, but also improves the predictability of transportation.
Environmental advantages: Railway transportation performs well in energy conservation and emission reduction. It has high energy efficiency and the carbon emissions per unit of cargo are much lower than road and air transportation, which is in line with the development trend of global green logistics. For companies and countries that focus on sustainable development, choosing railway transportation is a reflection of environmental friendliness.
Safety: Railway transportation has high safety and a relatively low accident rate, which reduces the risk of damage to goods during transportation and ensures the integrity of the goods.
Policy support and service optimization: The Chinese government attaches great importance to the development of railway transportation. It not only increases investment in infrastructure construction, but also provides policy support, such as implementing freight rate reductions and launching multimodal transport strategies, which further improves railway transportation. value for money. In addition, the railway department adjusts fares and services according to market demand, such as optimizing and adjusting fares for high-speed rail lines, which still maintains a cost-effective advantage compared with other modes of transportation.
With its multiple advantages such as low cost, high efficiency, environmental protection and safety, and policy support, railway transportation has demonstrated extremely high cost performance and has become the preferred solution for many enterprises and individuals when transporting goods. If you have goods that need to be transported and they happen to meet the transportation conditions of your route, you can contact us directly at NEW SPEED. We are one of the best freight forwarding companies in China and will provide you with professional freight channels that are most suitable for you.