RLL Container Report - 17 December 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 17 December 2014
In the bleak mid-winter, frosty wind made moan.
Earth stood hard as iron, water like a stone.
On Tuesday the 9th of December, a mere twenty-one days after departing Zhejiang Province, the train transporting 30 x 40’ HC of Chinese goods from Yiwu arrived at its destination in Madrid. Assuming a distance of 13,000 km, this equates to an average speed of 25.8 km per hour. In the same week, a block train from Vostochny arrived in Moscow just six days after departing the Far Eastern port. Assuming a distance of 9,289 kms, the average speed works out at 64.5 km. Normally, the same journey takes seven days, which equates to an average of 55.3 km per hour. The Maersk E-class vessels with their capacity of 18,000 teu glide across the seven seas at a cruising speed of 19 knots (35km/h). During its historic journey, the Chinese train had to change gauge first at Dostyk, secondly at Brest and then for a third time at Irun on the Franco-Spanish border. On the return leg, the 40’ HC dry cargo units will transport Spanish ham, Rioja wine and olive oil back to Yiwi.
DHL Global Forwarding report that low temperatures on the overland rail route between Europe and China are boosting the number of bookings for its temperature-controlled rail service from Chengdu to Europe. DHL refer to “freezing winter temperatures as low as -20 Celsius”. The route from Chengdu goes via Urumqi and then on via Dostyk and up by Astana. The Kazakh capital is actually the second coldest capital city on the planet, beaten to the title by Mongolia’s capital, Ulan Bator. Astana has recorded temperatures as low as minus 50 Celsius and temperatures of well below minus 30 Celsius are the norm “in the bleak mid-winter”.
Early in December, two new block train services were launched in Western Europe. Samskip Multimodal‘s service operates between Rotterdam and the North Italian rail hub at Melzo - a distance of 1065 km, which is covered in 30 hours at an average speed of 35.5 km per hour. The second train service also departs from Rotterdam and links with the French city of Lyon, a distance of 865 hours, which is covered in 48 hours at a more leisurely, average speed of 18 km per hour. On the other side of the Atlantic, the Journal of Commerce made a study of the speed of container block trains operating in North America. It found that in the past 12 months average speeds had dropped from 31.2 miles per hour to 29.2 mph or 48 kilometres per hour. Clearly, transit times via the Transiberian Railway compare well with other long-distance routes.
Facing its own race against time, the European Union has agreed to provide funding for a vital upgrade to the rail line from the Port of Koper up to Divaca. At present, this 26.4 km stretch of line is only single-track and needs to be double-tracked to carry the volume of cargo projected to pass through Slovenia’s only port. This section of track also forms part of the Trans-European Transport Network linking Lyon in the West with Trieste, Ljubljana, Budapest and then on to the Ukrainian border, where it will link up with the broad-gauge network. Throughput at the Slovenian port will grow on average by four percent annually and should reach 30 million tons per year by 2030. At the same time, rail freight is projected to double to 20 million tons, of which containerised freight is anticipated to account for 53 percent of the total cargo throughput by 2030.
While European rail operators are assessing the profitability of running container trains on the trans-Eurasian routes, the Chinese have completed a shorter – but in the long-run – probably more important rail link to the south. On the 1st of December, engineers laid the last rail on the 142km rail line from Mengzi to Hekou on the border with Vietnam. From there, it is a short train journey to container ports on the shore of the South China Sea. Samsung is in discussion with the Vietnamese government to invest USD 3 Billion in a new mobile phone factory. Samsung and other Korean manufacturers have invested heavily in Vietnam, which is marketing itself as a rival to China as a centre for low-cost products. Samsung’s latest move will bring its total investment in Vietnam this year to USD 11 Billion. LG Electronics and Intel have both set up production centres at the port of Cai Mep, near to Ho Chi Minh City, where there is a large, modern, deep-water container port.
The Chinese rail engineers are not resting on their laurels, for no sooner had they completed the link up with Vietnam than they commenced construction of two further lines in Yunnan Province that will link Kunming with Laos and Myanmar (Burma). Not only will these two new lines give Chinese producers access to new markets, it will also give Chinese exporters access to large container ports in S E Asia with connections by large container vessels to India, the Middle East and Europe. The new “tiger economies” of S E Asia plan to cut not only the cost of manufacturing but also the transit times to markets in Spain and the rest of Europe.
At the other side of the Eurasian landmass in Ust-Luga, SunGate and their partners from Freight Village and Avelana launched a new block train service linking the North-East port to Vorsino, Moscow. Operating twice per week and with a transit time of 31 hours, the new train serves the numerous companies in the Vorsino industrial park. The launch of the Ust-Luga service comes as SunGate is celebrating 20 years as an intermodal rail operator. Indeed, Ust-luga would appear to be the “in-place” to be, as FosAgro announced plans to consolidate its fertiliser shipments at the North-West terminal. This will be a major logistical shift, as the company plans to handle 2 million tons per annum at Ust-Luga, or just under half of all their production. With a draft of 17.5 metres, Ust-Luga is the only Russian port in the Baltic, which can take dry-cargo vessels with a deadweight of 75,000 tons. The port also handles a growing number of container services, which would provide FosAgro with the option of containerising a large portion of its exports via Ust-Luga.
John Keir, Ross Learmont Ltd.
17 December 2014
Copyright ©, 2014, John Keir