RLL Container Report - 19 October 2016
From: John Keir, Ross Learmont Ltd. Email: john.keir@telia.com Date: 19 October 2016
The container world stood on its head.
Government officials met with representatives of Hungarian Railways (MAV) and their Chinese partners to discuss the Euro 1.77 Billion upgrade to the rail line linking the Hungarian capital with Belgrade in Serbia. This section of the line is of great importance for the Hungarian economy, as it eventually links up with the Port of Koper to the west in Slovenia, which is currently Hungary’s main transit corridor for cargo to and from China and the Far East. The port plans to raise annual throughput from its current level of 930,000 to 1.3 million by 2020. Currently, Budapest acts as the main distribution point in Central Europe for containerised cargoes arriving by sea from Asian ports.
In April, Serbia launched a modernisation project on the southern main line linking Belgrade with Skopje in Macedonia, which forms part of Corridor 10 between Hungary and Greece. Russian Railways (RZD) provided funding for this and other upgrades along stretches of the southern corridor leading down towards Thessaloniki. From here, the line continues south through the Balkans all the way to Athens and Piraeus.
After purchasing 51 percent of the shares in Piraeus container terminal for Euro 280 million, COSCO Shipping announced that over the next two years it would raise throughput by 35% to 5 million teu. This is part of the company’s grand plan to transform the Aegean port into a major transshipment hub for its prime box service between Asia and Europe. With such a large projected annual throughput, Piraeus would overtake the Spanish ports of Algeciras and Valencia at the western end of the Mediterranean Sea.
The Port of Piraeus lies at the southern end of the EU transport corridor, Orient-East Mediterranean that stretches from the North German ports via Hungary, Romania, Bulgaria and Thessaloniki to the southern tip of Greece. The Chinese shipping line could off-load inbound containers at Piraeus and distribute these by block trains via hubs in Budapest, Prague, Dresden, Berlin and Hamburg. Indeed, Budapest is located only 1,500 km from the Greek port, which means that delivery time by block train is less than a day to the Hungarian capital. This corridor could significantly reduce the transit time for inbound boxes compared with the all-water route to North European ports.
At the same time to the East, the European Investment Bank is funding a major upgrade to the broad-gauge rail network in Moldova, the former Soviet republic wedged between Romania and the Ukraine. Chisinau, the capital of Moldova, lies 1,000 km to the east of Budapest and from there it is a mere 175 km to the port of Odessa on the Black Sea. Coincidentally, at just under 1,200 km Budapest lies the same distance from Kiev, Minsk and Vilnius, which are all the largest cities in their respective countries.
John Keir, Ross Learmont Ltd.
19 October 2016
Copyright ©, 2016, John Keir