A crisis that makes everyone feel good. Well, or almost everyone.


The logistics collapse poses new challenges and opens up new opportunities for the participants of the container transportation market.

The perfect ash breeze

Global logistical difficulties have caused container ships and loose containers to leave other routes, redirecting some traffic flows from China to Europe to the Russian infrastructure. As a consequence, profitable transit traffic in Russia has even overshadowed the service of «northern delivery» and inside traffic in general.

And steamships are not as expensive as trains

Transportation prices are breaking records. According to Drewry, the average cost of shipping a standard 40-foot container by sea can now be as high as $16,000 to $17,000 per FEU, and the China Container Freight Index (CCFI) for short- and long-term contracts increased by 243% from August 2020 to August 2021.

If at the beginning of the year the price of rail transportation from Asia to Europe fluctuated between $6,000 and $10,000 per FEU, in June the shipment from China to Hamburg could be as high as $17,000 per FEU. According to Telegram Channel Телеграмма РЖД (RZD Telegram), the difference in the cost of transporting containerized cargo between Asia and Europe by rail and sea has increased by 3.5 times, although a year ago the values of two price indices — the «rail» one — Eurasian Rail Alliance Index (ERAI), and the «marine» one — World Container Index (WCI) — overlapped.

The tariff is not an obstacle to traffic

One of the biggest beneficiaries of the coronavirus crisis was the railroad. In 2020, the volume of traffic increased from 4.2% to 11.4% and amounted to 5.8 million TEU, and for the first nine months of 2021, transportation of containers on the Russian railroads increased by 13.2% compared to last year, to 4.8 million TEU. Freight transit increased by 40%, to 733 thousand TEU, imports — by 25%, to 670 thousand TEU, exports — nearly by 9%, to 1.1 million TEU, domestic freight in containers by rail — by 11.3%, to 888 thousand TEU. Now there are more than 700 container trains on the Russian railroad network, although previously there were no more than 200.

Platforms are taking the lead

Against the backdrop of the container boom, Russian transport operators announce purchases of new fitting platforms and containers. Freight One speaks about the need for 10 thousand platforms and 40 thousand containers. TransContainer is ready to purchase about 5-6 thousand fitting platforms and 10 thousand containers in 2022.

Railcar builders are also enthusiastic. Thus, Transmashholding plans to increase production of fitting platforms by 25% starting from the 4th quarter of 2021. Roslavl Railcar Repair Plant has also shown an interest in production.

UNCTAD estimates that annual profits for carriers in 2021 will be an unprecedented $100 billion. Shipbuilders who received orders for 290 new container ships with a total capacity of 2.7 million TEU should also be added to the list of beneficiaries of the logistics collapse.

Those who survived the cataclysm are pessimistic

As for the forecasts, they do not portend a quick stabilization. In the annual Maritime Transport Review, UNCTAD analysts forecast a 2-4% increase in demand in 2022. Shipping companies and port operators anticipate that global import prices could rise by an average of 10.6% by 2023, according to the UNCTAD report.

Catch up, but not overtake

Meanwhile, the government has prepared a draft «Transport Strategy of the Russian Federation until 2030 with a forecast until 2035,» according to which the volume of container transit (all modes of transport) could be up to 3.7 million containers in 20-foot equivalent.

Isn’t this too ambitious a task, if the level of containerization of transportation in Russia is now two to three times lower than in other countries?

The answer to this question depends on the state and transport companies being able to take advantage of favorable opportunities to grow their businesses.

Analytics on topic
Will China Railway Express boom in 2020?
During the month of December we have celebrated the fifth anniversary of the first cargo train Yiwu-Madrid (China Railway Express). In November of 2014, the Chinese and Spanish Governments both witnessed the longest railway route in the world being born. By then, the company responsible of the initiative, Yixinou, was able to manage one train to one destination. Five years later, we are confident to reach a total number of 500 trains operating to 11 different worldwide destinations departing or arriving in Yiwu, East China’s Zhejiang Province.
Source: Global Times
China’s railway investment hits highest level since 2013 as infrastructure focus shifts to border regions, defence

China’s railway investment in the first quarter hit its highest level since 2013 amid government efforts to boost the economy and expand infrastructure in Western border regions that are of ever-increasing security and economic importance.

Source: South China Morning Post