It has become an indisputable fact that the freight volume of China Europe railway will plummet in 2022, but how much will the decline be? Take a look at recent data from UTLC ERA, a major operator of the New Silk Road that operates through Kazakhstan, Belarus, and Russia.
According to UTLC data, Italy's transportation volume decreased by 91.62% year-on-year, which can be described as a complete failure. Poland, considered an industry leader, was not spared, with a year-on-year decrease of 21.87%. The only positive factor in the data is Hungary, which was not an important participant in this railway transportation circle before. Hungary has caused a sensation and has become a new force, ranking first with a 1266% increase in freight volume.
Poland still leads
In terms of transportation volume, Poland still ranks first with a total transportation volume of 195736 TEUs, with westbound trains exceeding eastbound trains by more than ten times. The export volume of the German route towards the east (107382 TEUs) is almost twice that of the export volume towards the west (64486 TEUs). When it comes to the Netherlands, eastbound trains are roughly the same as westbound trains. On the other hand, there are almost no eastbound trains departing in Belgium, and all traffic is contributed by westbound trains. On the Hungarian side, the overall transportation volume is relatively small, with six times the number of westbound trains compared to eastbound trains.
What is the reason for the almost complete disappearance of railway freight between China and Europe in some countries while increasing in others? What does the total volume and year-on-year growth data reflect, and what signals can it bring to the future? According to UTLC data, Poland, Germany, the Netherlands, Belgium, and Hungary were among the top five countries in terms of transaction volume with China in 2022. Let's take a closer look at what happened there.
Poland remains the main force
From the overall transportation volume, Poland remains the main destination for the China Europe train. The overall cargo flow decreased by 21.87% year-on-year, with the lowest decline among EU member states. Compared to the 61.19% decrease in eastbound trains, the 13.41% decrease in westbound trains can be described as flat.
Strong German exports
Among the five countries analyzed in this analysis, Germany is the only country with exports far exceeding imports. Last year, the number of trains bound from Germany to China decreased by 55.10%, while the number of trains bound from Germany to China decreased by 21.76%. As Germany's largest trading partner, its exports to China include complete vehicles and automotive parts, mechanical equipment, optical products, etc.
Germany's well-established stations and infrastructure also provide infrastructure for international logistics. To the north is Hamburg Port, the third largest port in Europe, and to the west is Duisburg, the world's largest inland port. Railway and inland waterway transportation can also provide better logistics infrastructure for the Western European market. When German Chancellor Schultz visited China in November last year, he reached multiple large trade orders with China and Germany. The prospects for Sino German trade seem bright. Recently, the "New China Strategy" hotly discussed by German media has also cast a shadow on trade growth. However, the argument of "getting rid of China's cheap supply chain" advocated by the "New China Strategy" may have a certain impact on westward imports, while eastward exports will continue.
Belgium and the Netherlands
As for the decrease in traffic in the Netherlands and Belgium, it may be related to the moral resistance of Western European countries towards Russia. Last year in the Netherlands, westbound trains decreased by 70.88%, while eastbound trains decreased by 41.54%. In Belgium, no goods are shipped to China, and the number of trains entering has decreased by 22.77%. As a major trading country, the Netherlands has the largest seaport in Europe - Rotterdam Port. After the conflict between Russia-Ukraine conflict, more and more shippers returned to shipping as the shipping price fell. At the same time, due to compliance considerations, an increasing number of Dutch companies are interested in the North Line of China Europe Express passing through Russia.
Antwerp Port in Belgium is the second largest port in Europe. The disappearance of eastbound cargo flow may also return to shipping. However, e-commerce also supports westward freight flow. Cainiao's overseas warehouse in Liege is a good example. Meanwhile, China imports dairy and alcohol products from the Netherlands and Belgium all year round. China's strict epidemic prevention and border inspection measures may lead to a decrease in the transportation of such products.
Hungary's sudden rise
Of particular note is the UTLC data from Hungary. Last year, the overall freight volume increased by 1266%. The westward flow has increased by nearly 3000%. Compared to the size of other countries, Hungary's size can be described as very small. (7160 TEU). However, this upward trend also indicates that the market is developing. The railway network is sound and the facilities are convenient. The new station located in Fenyestlike, East West Gate, provides conditions for cultivating the maturity of the Hungarian market. It's just that the timing, location, and people haven't arrived yet. However, if there are new opportunities in Ukraine in the future and the situation improves, the acceptance of Hungary by the railway transportation market may increase.
As Ronaldi, General Manager of China Philippines Bank Xi'an Branch, pointed out earlier, "Hungary is a member state of the European Union and one of China's largest investment partners in the Central and Eastern European region. It represents policy dividends and stability, which are particularly important and valued by our logistics service practitioners, especially in the current uncertain situation
