Long-haul cargo train turns popular among exporters

Export of home appliances from Shenyang and surrounding areas picks up pace amid rising geopolitical tensions affecting maritime trade

Recently, drivers of forklift trucks were seen busy loading boxes containing 400 televisions into a rail container at the assembly center of China-Europe freight train services in Shenyang, Liaoning province.

The TVs were scheduled to arrive in Moscow in early June, where they will be distributed and sold at various department stores and e-commerce platforms across the country.

"We mainly export home appliances to Europe. There is a risk of component corrosion with maritime transport, and the cost of airfreight for home appliances is too high," said Guan Jun, vice-president of Shenyang Zhicheng Trading Co Ltd, a Shenyang-based foreign trade company.

After comparing various options, Guan said the company chose the China-Europe freight train services in 2022. It takes about 12 days to reach Russia and about 16 days to reach Germany from Shenyang.

This long-haul cargo train service has become a popular option for the export of home appliances from Shenyang and its surrounding areas, with an increasing number of companies choosing the cargo train service, he added.

Data showed that from January to April this year, Liaozhong Customs, a branch of Shenyang Customs, supervised the export of over 3,300 TVs worth more than 9.4 million yuan ($1.3 million). The majority of them were shipped by the Shenyang-Europe freight train services.

Exporters and business leaders said rising global geopolitical tensions and security concerns in the Red Sea maritime passage will further increase the importance of the China-Europe freight train services, a critical complement to China-Europe trade this year.

The hesitance shown by global shipping companies to use the Suez Canal may continue to impact China-Europe trade this year, putting operational costs for businesses under pressure on both sides, said Lin Meng, director of the Modern Supply Chain Research Institute at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

In response to disruptions in international shipping due to security concerns in the Red Sea region, many freight forwarders have adopted rail services as an alternative mode of transportation between China and Europe, said Lin.

As these challenges persist, the role of the China-Europe freight train services in supporting international commerce will continue to evolve and expand over the long run, said Li Muyuan, executive vice-president of the China Container Industry Association in Beijing.

Together with the China-Laos railroad service and China-Central Asia freight trains, regional connectivity and business connections between China and these regions will be further enriched, Li added.

That sentiment is in line with the latest data.

The number of China-Europe freight train services grew by 10 percent year-on-year to 6,184 trips in the first four months of 2024, data from Beijing-based China State Railway Group Co Ltd (China Railway) showed.

About 675,000 20-foot equivalent units of goods were transported via freight trains during this period, up 11 percent on a yearly basis, according to the country's railroad operator.

By the end of May, about 90,000 China-Europe freight train trips had been completed in total, serving 223 cities across 25 European countries.

Since its inception in 2011, the range of products transported by the China-Europe freight train services has grown significantly, from just 53 items to over 50,000 products by the end of April, data from the General Administration of Customs showed.

Numerous cities have introduced tailored services, including dedicated trains for transporting specific goods like timber, tea, edible oil and new energy vehicles, said Zhang Tao, deputy director of the GAC's department of port control.

Eager to reach more destinations in Europe and other regions, China Railway has initiated transport testing for the China-Europe freight trains from Xi'an, Shaanxi province, Chongqing, and Yiwu, Zhejiang province to Poti, Georgia, and Istanbul, Turkiye, this year.

Other new routes have also been opened.

These include Harbin, Heilongjiang province to Tilburg in the Netherlands; Shijiazhuang, Hebei province to Belgrade, Serbia, and Qingdao, Shandong province to Moscow.