China Europe Rail Freight Transport Market - Growth, Trends, and Forecast (2018 - 2023)

SKU ID : INH- 12347399

Publishing Date : 01-Aug-2018

No. of pages : 120

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  • A Decade ago, the proposal of China Government to build a robust rail network to connect Europe and China was regarded as a nightmare by most of the logistics service providers and shipping liners. Today, the rail network connects roughly 34 European cities with 35 Chinese cities and regarded as the cheaper service than air and faster than sea. In 2017, it is estimated that more than 3000 container trains ran between the two continents and rail share by cargo value increased by 144% in the first half of 2017. Owing to the growing trade forecasts between the two regions, increasing Chinese infrastructure spending for Belt and Road Initiative (BRI) and subsidies for rail freight network, the international union of railways (UIC) estimated that the China-Europe rail services is expected to double its share of trade by volume over the next decade.

    MAJOR CATALYSTS PROPELLING THE CHINA-EUROPE RAIL FREIGHT TRANSPORT MARKET

    Owing to the rising capital costs and wages in costal areas, many manufacturing and production companies are relocating their plants to inland cities in China, which are far away from the Chinese commercial costal lines. The companies like HP find difficult to export products to Europe since the commodities needs to travel thousands of kilometers east to the sea ports and ship them back to the west of Europe. The development of railroads has offered the companies in reducing transit times and shipping of the goods from the production site directly to the Countries in the Europe. Furthermore, the rail services are partially subsidized by both the Chinese and European governments. According to the industry sources, Chinese provincial governments collectively spent over USD300 million in subsidizing China-Europe block trains during the period 2011-16. Additionally, European Union (EU) and its members subsidize both railway infrastructure and operations to promote the more environmental friendly transportation over road. Additionally, the demand for the Chinese automobile parts and hi-tech products in Europe have been increasing significantly and the trend is expected to rise the rail volumes during the forecast period.

    KAZAKHSTAN - THE GATEWAY FOR CHINA-EUROPE SOUTHERN RAILROAD

    China has been focusing on southern railway lines to build a new silk road and plans to develop a robust rail network through the central Asia. But a major hindrance to the direct rail route between the two regions is the different track gauges in China and Russia. Hence, China and Kazakhstan has been investing heavily in the Khorgos Gateway, which is dry port at the border with china that used to lift containers to Kazakh trains from Chinese ones to overcome the change in track width problem. Kazakhstan has spent nearly USD3.2 billion in upgrading its rail lines and rolling stock since 2011to accommodate the growing demand for rail freight. This has resulted in 500,000 tonnes of rail freight movement in 2016 between the two regions. Furthermore, Kazakhstan Temir Zholy (KTZ), national railway company plans to increase its container handling capacity to 1.7 million a year by 2020. Additionally, China also eyes the Khorgos Gateway as a major segment in the rail corridor and coming up with investments. For instance, Chinese shipping company COSCO handled a 49% stake in the Khorgos Gateway and aims to boost the inland port capacity.

    The development of the rail lines and the new Silk Road in the places that are far away from sea has created ocean of opportunities for logistics companies and storage facility providers. This scenario is expected to ignite spark in the local distribution and manufacturing potentialities, which stimulate new commercial & residential areas and need for intermodal transport in the central Asia.

    China-Europe Rail Freight Transport Market Key Developments:

    May 2018: United Parcel Service (UPS) launched a new Full Container Load (FCL) service between Hong Kong and Europe that leverages on the China to Europe service line. This two-way service adds to the existing freight rail services and offers 30% lesser cost than maritime transport and 60% lesser than Air transport.

    Feb, 2018: Rail freight logistics company Rail Cargo Group (RCG), JSC United Transport and Logistics Company (UTLC), the rail freight division of the (OBB) and have signed a MoU to improve rail freight service connections and increase intermodal transport on the China-Europe rail freight route.

    Major Players: DB Cargo, UPS, Russian Railways (RZD), China Railway (CR), JSC United Transport and Logistics Company, DHL Rail, Hellmann Worldwide Logistics, Kazakhstan Temir Zholy (KTZ), Far East Land Bridge Ltd, InterRail Group, PKP, Rail Cargo Austria, Nunner Logistics, Wuhan Han'ou International Logistics Co among others.

    Reasons to Purchase China-Europe Rail Freight Transport Market Report:

    To study current and future market outlook in the developed and emerging markets
    Analyzing various perspectives of the market with the help of Porter’s five forces analysis
    Detailed analysis of the segment that is expected to dominate the market
    Regions that are expected to witness the fastest growth during the forecast period
    Identify the latest developments, market shares, and strategies employed by the major market players
    3-month analyst support, along with the Market Estimate sheet in excel
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