Rail transport emerging via the ‘New Silk Route’

27 July 2017

The Silk Route has been the most important trade route between China and Europe for generations. Since the worldwide growth of container traffic in 1887, this became used less and less. In 2015 this situation changed. Mostly via new investments from China, new life was blown into this route. The “new” Silk Route consists of three rail lines, which connect China mainly with Europe.

China wants to remain Europe’s main supplier

The major investment by China in the New Silk Route was initially viewed with suspicion in Europe. It was thought that the country wanted to compete and expand its influence. The investments however, were actually made to expand the cooperation with Europe. China wants to remain the main supplier to Europe, particularly now that consumer spending at home has begun to decline. In addition, there is some political urgency. As the US expands its power in the Middle East, it appears to become a less trustworthy partner for China.

Expanded network

The new Silk Route consists of three large rail routes, which connect to more and more destinations within China. For importers and exporters in the Netherlands, Duisburg, Hamburg and Tilburg stations are the closest. A few times per week trains run to and from these destinations. Duisburg and Hamburg are visited from various places in China. The train to Tilburg leaves from Chengdu three times per week at the moment. Later this year, that frequency will rise to five times a week.

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A promising third mode of transport

Fast transit times and few significant delays give rail transport a great chance to succeed as a third mode of transport. In particular, considering the current pressure on space in sea freight, the chance is big that this will become a fully-fledged option alongside air and sea freight. Although rail freight is three times more expensive than sea freight, it is five times cheaper than air freight. Moreover, the network and utilisation of the new Silk Route is constantly expanding. Rail traffic is becoming an increasingly important tactical tool within supply chain planning.

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