China-Europe logistics market

Demand outlook

• Europe’s economy remains fragile, putting continued pressure on trade and demand for logistics. In February, industrial production saw its smallest decline in two years (Manufacturing PMI: 47,6) [S&P Global], while consumer confidence worsened [NielsenIQ]. Companies across Europe are grappling with excess inventory, delaying new orders, including from overseas suppliers [Flexport]. According to S&P Global, key export industries remain in recession. Despite these challenges, business confidence has reached its highest level since 2022.

• China faces mounting economic difficulties due to weak domestic demand, deflationary pressures, and increasing trade barriers, posing risks to both imports and exports. While the government has set a 5% GDP growth target for 2025, achieving this goal will be challenging [Reuters]. However, state stimulus measures and investments in technology could support certain industries and help counteract negative trends [SCMP]. The government is prioritizing demand stimulation, doubling last year’s subsidy program to $41,7 billion [CNBC]. While this may offer short-term relief, it is unlikely to change the overall trajectory.

• China-Europe rail container traffic declined sharply in February, falling 29% YoY and 4% MoM. The increase in alternative corridor volumes was driven by delayed shipments from 2024, held up by adverse weather conditions. While weather in the Caspian ports has improved, intermittent closures at Aktau are now adding to disruptions.

• Maritime shipping is stabilizing, but uncertainties remain due to alliance restructuring, persistent delays in Asian and European ports, and a difficult geopolitical and economic landscape (e.g., excess inventory levels in Europe). As Chinese factories ramp up, shipping volumes are expected to rise by April-May, but competition for cargo flows from Asia will remain intense.

Freight rate trends

• Shanghai-Rotterdam WCI has been fluctuating around $2 600/FEU for the past three weeks (-16% MoM, -28% YoY) [Drewry]. According to Flexport, carriers have postponed rate hikes (GRI) to April, but weak demand and surplus capacity may once again derail these plans. DHL Global Forwarding forecasts a balanced supply-demand environment from March to May, limiting opportunities for sustained rate increases. Futures indicate a gradual rate rise to $3 000/FEU by summer.

Other trends

• KTZ Express and CRCT have launched a new rail route to Europe [KTZ]. A container train departed from Chengdu to Lodz on March 4, passing through Kazakhstan, Turkmenistan, Iran, and Turkey, with an expected transit time of 40 days.

• KTZ and PTC Holding signed a memorandum to jointly develop terminal infrastructure in Georgia [Rail-news.kz]. Plans include the construction of a multimodal container terminal in Poti with an annual capacity of over 80 thousand TEUs.

China-EAEU logistics market

Import and export trends

• Analysts at T-Investments, in their baseline scenario, expect the Bank of Russia to cut its key interest rate from 21% to 13% by year-end, in line with its 2025 strategy. The Central Bank of Russia (CBR) forecasts annual inflation peaking in April-May 2025, followed by a decline. For 2025, the CBR expects inflation to be 7-8%, aiming to return to the 4% target by 2026 [Kommersant].

• The ruble has been strengthening for nearly a month. As of March 11, the official exchange rate against the US dollar stood at 88,39 RUB/USD [Bank of Russia]. Some analysts predict this trend may stall by late March, but due to high uncertainty, no specific forecasts have been provided [Business FM]. In the short term, the foreign exchange market will likely remain influenced by geopolitical factors, with the dollar expected to trade within the ₽89—93 range this week [RBC].

• New car sales in Russia dropped by nearly 25% YoY in February, totaling 78 040 units, according to Autostat. A further decline of 45-50% YoY is expected in March, with sales projected to reach ~80 thousand units [Autostat]. The decline is attributed to high sales at the end of 2024 ahead of price hikes and speculation about foreign automakers returning to Russia [Kommersant]. Automobiles remain a key segment in Russian imports from China.

• Russia-China trade volume for the first two months of 2025 totaled $34,68 billion (-7,1% YoY), according to China Customs: exports $14,95 billion (-10,9%), imports $19,73 billion (-3,9%).

• The ruble’s appreciation is a positive trend for Russian consumers. However, Russian Central Banks’s monetary policy may keep consumer spending subdued. Additionally, China’s relatively weak export base is limiting import volumes, keeping import freight volumes levels rather low. On the other hand, a stronger ruble could negatively impact Russian exporters.

• Freight rates for imports from China to Moscow have dropped significantly in direct rail segment, while multimodal transport costs are also trending downward. Direct rail transport now costs ~$5,200 per FEU, down ~$2 000 over two weeks. Rates for shipments via Far East Russian ports fell by ~$500 to ~$5 150/FEU, with the rail component decreasing by ~$400 to ~$4 000. The decline in rates is driven by market factors rather than the recent currency fluctuations.

• In January-February 2025, Russian Railways (RZD) transported 1 288 million TEUs, a 3,2% YoY increase [Russian Railways]. However, February’s transport volume of 605,7 thousand TEUs (-11,2% MoM) was the lowest since June 2023.

Other trends

• According to InfraNews, in February 2025, 108,7 thousand cargo trucks crossed Russia’s border checkpoints, marking a 18% YoY decline.