When using, citing, or distributing the materials from this report, it is mandatory to reference the ERAI portal and include the webpage address https://index1520.com as the source of information. China-Europe logistics market Demand outlook China’s exports are showing signs of recovery. In June, export orders improved, partly due to easing U.S. tariff pressure. A key driver has been the automotive sector: in May, Chinese exports of plug-in hybrids (PHEVs) to the EU surged 600% YoY, as these models are not subject to higher tariffs [SCMP]. Overall PHEV exports in the first five months of 2025 grew 140% YoY. However, domestic demand in China remains sluggish. Deflation persists, and corporate profits dropped sharply in May (-9.1%). In response, authorities are expanding consumption stimulus measures through subsidies, trade-in incentives, and credit programs. Notably, the People’s Bank of China is activating a previously announced ¥500 billion ($69.7 billion) refinancing quota [SCMP]. The June PMI suggests a weak but steady recovery in eurozone business activity. For the first time in 3.5 years, Germany recorded growth in export orders, while the overall decline in the region was the smallest since April 2022 [S&P Global]. Falling inflation and improving business sentiment are creating conditions for a trade rebound. Against this backdrop, expectations for monetary easing are rising — analysts now forecast another ECB rate cut in September [Reuters], which would also further support external economic activity. Strong demand for Asia—Europe ocean freight persists. According to BIMCO, the improving macroeconomic environment in the EU—driven by falling inflation and a rebound in consumer spending—is supporting this trend [JOC]. DHL Global Forwarding expects the start of a full-fledged peak season beginning in July. Freight rate trends The average rail freight rate on the China—Europe route (SOC) remained virtually unchanged over the past month, with rates ranging from $5 000 (Chengdu) to $6 850/FEU (Shenzhen). The Shanghai—Rotterdam WCI rose by 1% last week, reaching $3 204/FEU (+48% MoM, —56% YoY) [Drewry]. UPDATE: As of the evening of July 3, 2025, the latest WCI Shanghai-Rotterdam reading has risen by 8% WoW, reaching $3 468/FEU. CMA CGM and ONE are quoting rates around $3 400/FEU for the first half of July, while offers above $4 000/FEU were still seen in late June. Higher levels (~$4 000) are already being quoted for the second half of July [GeekYum]. Stable demand is providing short-term support for rates, which could continue to rise and peak in July [Flexport]. Equipment shortages, blank sailings, and port congestion are adding further upward pressure on pricing in the near term. On the other hand, the Gemini alliance (HPL and Maersk) is maintaining a zero blank sailing strategy, which could draw the market into another round of rate wars [Linerlytica]. However, futures pricing points to moderately bearish expectations and a downward correction starting in July. According to the Shanghai Futures Exchange, rates on the Asia—Europe route are expected to gradually decline from current levels to around $1 800/FEU by the end of October. Other trends Chongqing is positioning itself as a «rail-based Suez Canal» — a key transit hub between Southeast Asia and Europe. The ASEAN Express route, launched in October 2024, highlights China’s growing role as a land-based transit platform, increasingly linking its regional neighbors to overland trade corridors. As of April 2025, cargo volumes on this route reached ¥1.65 billion (~$229.6 million), with weekly departures now established [SCMP]. Meanwhile, German rail, industrial, and trade associations are urging the government to increase subsidies for rail infrastructure access by €75 million (to €350 million) in the 2025 budget, and to implement a reform of the rail tariff system [RailTarget]. Infrastructure charges rose by 16% in December 2024, and could increase by another 8–35% in December 2025. These rising costs are undermining the competitiveness of rail transport and could force operators to exit the market. China-EAEU logistics market Import and export trends The St. Petersburg International Economic Forum took place from June 18 to 21, during which key messages about the current state of the Russian economy were shared. President Vladimir Putin stated that Russia’s GDP grew by 1.5% YoY over the first four months of the year. He also noted that, thanks to actions by the Bank of Russia and the government, inflation in the country has fallen below 10%. Elvira Nabiullina, current governor of the Bank of Russia, said that the central bank will begin lowering the key interest rate as inflation slows. Deputy Prime Minister Vitaly Savelyev, speaking at the forum, said that the Ministry of Transport may be transformed into the Ministry of Infrastructure Development and Logistics. According to him, over the next 10–15 years, the sector will evolve from a purely transport-oriented model to a logistics-driven one, with greater emphasis on value-added services and high-value cargo. Alexey Zabotkin, Deputy Chairman of the Bank of Russia, stated that the key rate could be cut by 100 bp at the July meeting. However, the central bank may choose to pause between cuts. He noted that inflation is expected to move toward the 4% target [Kommersant]. Meanwhile, the Eurasian Development Bank forecasts the key rate to reach 18% by the end of the year. Due to high interest rates and the strengthening ruble, Russia’s inflation is expected to slow to 7.5% in 2025, down from 9.5% in 2024. Analysts expect the ruble to weaken in the second half of the year, reaching…
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