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Eurasian Rail Freight in the One Belt One Road Era


Abstract and Figures

This paper presents an overview of the recent development of Eurasian rail freight in the One Belt, One Road Era and further evaluates its service quality in terms of transit times and transport costs compared to other transport modes in containerised supply chains between Europe and China. A trade-off model of transit time and transport costs based on quantitative data from primary as well as secondary sources is developed to demonstrate the market niche for Eurasian rail freight vis-a-vis the more established modes of transport of sea, air, and sea/air. In a scenario analysis, further goods attributes influencing modal choice are employed to show for which cargo type Eurasian rail freight service is favourable. According to our calculations, Eurasian rail freight is about 80% less expensive than air freight with only half of the transit time of conventional sea freight. Our scenario analysis further suggests that for shipping time sensitive goods with value ranging from 1.23 USD/kg to 10.89 USD/kg as well as goods with lower time sensitivity and value in a range of 2.46 USD/kg to 21.78 USD/kg, total logistics costs of Eurasian rail freight service beat all other modes of transport. Hence, Eurasian rail freight seems to be an option beneficial in terms of transport cost, transit time, reliability and service availability, which enables shippers to build up agile and sustainable supply chains between China and Europe.
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Eurasian Rail Freight in the One Belt One Road Era
Hans-Joachim Schramm * **
Xu Zhang ***
*) Department of Global Business and Trade, Institute for Transport and Logistics Manage-
ment, WU Wirtschaftsuniversität Wien, 1090 Wien, Austria, E-mail:
**) Department for Operations Management, Copenhagen Business School, 2000 Frederiks-
berg, Denmark, E-mail:
***) School of Transport Engineering, Environment and Planning, Technological University
Dublin, E-mail:
This paper presents an overview of the recent development of Eurasian rail freight in the One
Belt, One Road Era and further evaluates its service quality in terms of transit times and
transport costs compared to other transport modes in containerised supply chains between Eu-
rope and China. A trade-off model of transit time and transport costs based on quantitative data
from primary as well as secondary sources is developed to demonstrate the market niche for
Eurasian rail freight vis-a-vis the more established modes of transport of sea, air, and sea/air.
In a scenario analysis, further goods attributes influencing modal choice are employed to show
for which cargo type Eurasian rail freight service is favourable.
According to our calculations, Eurasian rail freight is about 80% less expensive than air freight
with only half of the transit time of conventional sea freight. Our scenario analysis further sug-
gests that for shipping time sensitive goods with value ranging from 1.23 USD/kg to 10.89
USD/kg as well as goods with lower time sensitivity and value in a range of 2.46 USD/kg to
21.78 USD/kg, total logistics costs of Eurasian rail freight service beat all other modes of
transport. Hence, Eurasian rail freight seems to be an option beneficial in terms of transport
cost, transit time, reliability and service availability, which enables shippers to build up agile
and sustainable supply chains between China and Europe.
One Belt, One Road; Belt and Road Initiative, container block train; quality of service; transport
cost; transit time
1. Introduction
In 2013, the term ‘One Belt, One Road’ (OBOR) came into the spotlight as China’s masterplan
initiative to revive the Ancient Silk Road was announced by Chinese president Xi Jinping. The
OBOR initiative (or shortly BRI following NDRC, 2015) is often communicated as a “national
vision” and “foreign strategy” towards regional cooperation, and it is also mentioned in relation
to infrastructural project construction and investments (van der Leer and Yau, 2016).
Basically, the BRI includes two major parts - the New Silk Road Economic Belt and the 21st-
Century Maritime Silk Road (hereinafter referred to as the Belt and the Road respectively).
Both represent a network of ports, railways, roads, pipelines, and utility grids connecting China
with Central Asia, West Asia, and parts of South Asia, Europe, and Africa (NDRC, 2015; Tian,
2016). Though, the BRI is more than just physical connections (Tian, 2016), it provides a blue-
print framework for Chinese diplomatic, commercial, and foreign infrastructure policies to get
access to new markets for trade and investments (van der Putten and Meijnders 2015). The aims
of the BRI are to (1) promote connectivity of Asian, European and African continents via land,
sea and air, (2) establish and strengthen regional cooperation and partnerships among the coun-
tries along these routes, and (3) facilitate flow of economic resources and integration of markets
(Song, 2015). Currently, the Eurasian rail freight only take a small share of the total transport
volume between China and Europe (Kaplan, 2016). However, with a rapid growth of freight
transport on the rail routes along the Belt, the Ancient Silk Road trading routes are coming back
to life again as container block trains, have emerged as an alternative transport mode there in
recent time (see Figure 1).
Figure 1: China-Europe rail freight continues to soar
Source: CRCT (2018)
In terms of transit time, a typical container block train from e.g. Chongqing to Western Europe
takes at present 14 to 20 days on the Belt route, which is half of the time than shipments spend
on the Road route with 31 to 48 days (Kaplan, 2016; Kuester, 2017; Seo et al., 2017). In terms
of transport costs, rail is regarded to be much cheaper than pure air transport (Davies, 2017).
Therefore, with a speed advantage against sea and price advantage against air, Eurasian rail
freight seems to fit a market niche in modern supply chains with great potential to grow its
market share in the future. It is expected, that the potential rail freight volume on the Belt routes
will grow 50 times from 2012 to 2020 (Luica, 2013) and according to the five-year development
plan issued by the Chinese National Development and Reform Commission (NDRC), the num-
ber of trains is expected to reach 5,000 by 2020 (Luo, 2017).
Although these really impressive figures circulating, research in Eurasian rail freight between
China and Europe is so far subject to merely anecdotal empirical evidence, consultancy work
or policy studies (Davydenko et al., 2012; UNECE, 2012, 2017; Galushko, 2016; Jakóbowski
et al., 2018; Vinokurov et al., 2018) and only a few recent scholarly contributions are worth
mentioning like Rodemann and Templar (2014), Chen et al. (2017), Besharati et al. (2017), Seo
et al. (2017), or Panova et al. (2018), as well as some in Chinese language discussed in Liu et
al. (2018). Other recent works like Song and Na (2012), Regmi and Hanaokab (2012), Tsuji
(2013) or Moon et al. (2015) focused on transports via Trans-Siberian Railway with a short sea
leg from China, South Korea and/or Japan to Russian Far East.
2011 2012 2013 2014 2015 2016 2017
Container block trains p.a.
Trains WB Trains EB
2011 2012 2013 2014 2015 2016 2017
TEU transported p.a.
The aim of this paper is provide an objective overview of the present Eurasian rail freight mar-
ket. Therefore, desk research of sources available in English, Russian and Chinese language are
complemented by interviews with main players being active on this market. In the following,
common routings, major players, present bottlenecks and service quality issues of Eurasian rail
freight are discussed in Sections 2, before the trade-off between transit times and transport costs
compared with other modes of transport followed by a scenario analysis based on cargo type to
demonstrate the market nice for Eurasian rail freight services in Section 3. The paper concludes
then in Section 4 with a discussion of the results in a wider context, followed by managerial
implications, limitations and suggestions for further research.
2. Eurasian Rail Freight Transport in the OBOR Era
Dating back more than 3,000 years, the Ancient Silk Road emerged between Asia and Europe,
it ran 15,000 km between the old capital city Xi’an in China and the Roman Empire, connecting
China, India, Persia, Arabia, Egypt and Rome along the route (Otsuka, 2001; Lin, 2011). Com-
modities such as silks, gems, gold, silver, carpets, tea, paper, spices were carried by camels or
donkeys transporting between Asia and Europe (Otsuka, 2001), as Marco Polo recorded in the
late 13th century, it took him four years to travel along the entire Ancient Silk Road by foot
(Woods, 2015). Later in the 17th century, as European voyagers thrived the maritime trading
route, this land route faded out due to its overall longer transport time (Otsuka, 2001).
However, the emerging Eurasian land bridge revives the Ancient Silk Road as a land route for
trading between east and west – not by camel or donkey but by railway (Otsuka, 2001), and
goods remain in the same container for the entire intermodal journey (Rodrigue, 2017). It con-
nects cities in Europe with Russian Far East and China by railway lines running through East
Asia, Central Asia, Southern Russia, Eastern Mediterranean, Arabian Peninsula and Europe
(Lin, 2011). Given that at least some parts of the Eurasian land bridge follow the same track
with the Ancient Silk Road, thus it is also called “New Silk Road” or “Modern Silk Road”
(Zhang, 2013; NDRC, 2015). This New Silk Road includes two major rail land bridges between
Europe and Asia as shown in Figure 2, namely:
The Trans-Siberian Railway (TSR, or First Eurasian Land Bridge) served as the main
land bridge between Russian Far East and Western Europe from the late 1960s until the
early 1990s (Lilliopolou et al., 2005; Pieriegud, 2007). The TSR starts from the Russian Far
East Pacific seaports Vladivostok and Nakhodka running west through Russian Federation
to Moscow, and further reaches European countries such like Finland, Latvia and Poland
through different rail routes (Zhang, 2013; OSJD, 2017), at the east end, maritime links
connecting the aforementioned Russian seaports with China, South Korea or Japan are also
considered as natural extension of the intermodal transport routes of this traditional Eura-
sian land bridge (Zhang, 2013).
The New Eurasian Land Bridge (NELB, or Second Eurasian Land Bridge) originally
spans from the pacific port of Lianyungang in China running through China, Kazakhstan,
Russian Federation, Belarus to Rotterdam in the Netherlands (Islam et al., 2013; OSJD,
2017) with a variety of intermodal terminals as points of origin and destination in between.
Figure 2: Route of the Trans-Siberian Railway (red) and the New Eurasian Land Bridge
(green), Source:
Present Eurasian Rail Freight Main Route Characteristics
The abovementioned TSR and NELB are the current two main routes connecting Asia to Eu-
rope (Sárvári and Szeidovitz, 2016). Notably, these two major Eurasian land bridges consist of
several train routings across various countries with individual branch lines that partially share
the same main line sections as well (Rodemann and Templar, 2014). They can be described as
The Northern Corridor provides three alternative branch lines connecting China and Europe
via TSR (Islam et al., 2013, Galushko, 2016), namely:
China – TSR via Alashankou/Dostik and transit through Kazakhstan (Kazakh route)
China – TSR via Erenhot/Zamyn-Uud and transit through Mongolia (Mongolian route)
China – TSR via Manzhouli/Zabajkalsk (Manchurian route)
Trains on this route start somewhere in China, head via one of the three border crossings for
the TSR toward west and enter European Union at Brest/Malaszewicze, Chop/Dobra or (but to
much less extent) via Estonia, Latvia, Lithuania, and/or the Russian exclave of Kaliningrad
(OJSD, 2017). However, it is noted that the classic TSR line starting in Vladivostok or Na-
chodka is not considered in the BRI development strategy (Sárvári and Szeidovitz, 2016).
The Central Corridor provides an alternative east-west route through Kazakhstan and Russian
Federation to connect China and Europe called NELB. Trains on this route cross the Chinese -
Kazakh border at Alashankou/Dostik or Altynkol/Khorgos and usually run further west via rail-
way lines south to the TSR towards the aforementioned border crossings to European Union.
This route is the main target of the Belt in the BRI (Sárvári and Szeidovitz, 2016).
Meanwhile, it is worth to mention that there is the Southern Corridor called the Trans-Caspian
International Transport Route (TITR, upcoming which runs through Kazakh-
stan, the Caspian Sea, Azerbaijan and Georgia further to Turkey, Ukraine or European coun-
tries. However, this routing requires at least one ferry trip across the Caspian Sea, and trans-
cends Caucasus towards the Black Sea or Turkey to reach Europe and these multiple border
crossings, ferry trips and current geopolitical issues in the Caucasus region make it rather unat-
tractive at present (Sárvári and Szeidovitz, 2016).
Current Development of Eurasian Rail Freight Services
In March 2011, China launched the China Railway Express (CRE) freight service with the aim
to enhance connectivity with markets in Central Asia and Europe along the Belt of BRI (Luo,
2017). Originating from different parts of China, these container block trains have different
routings: trains starting in the western part of China like Urumqi, Chongqing, Chengdu and
Wuhan go via Alashankou or Altynkol to Europe, whereas trains from the east coastal and
northern region such as Putian, Suzhou and Zhengzhou leave China via Manzhouli or Erenhot
and follow the TSR to Europe (Luo, 2017; OSJD, 2017; CRCT, 2018). By end of 2017, the
main intermodal terminals on the European side were Malaszewicze, Warsaw, Duisburg or
Hamburg, with some dedicated block trains also end at Budapest, Klaipeda, Lodz, London,
Madrid, Muuga, Nuremberg, Pardubice, Riga, Rotterdam, Schwarzheide or Tilburg (OSJD,
2017; CRCT, 2018).
Market Player
Siemens-Fujitsu, BSH, BMW, HP*, Apple*, Acer*,
Foxconn*, Haier*, Samsung*, Audi*, Volkswagen*,
Volvo*, Decathlon*, etc.
Kuehne & Nagel, DB Schenker, DHL*, GEFCO*,
HAL Logistics*, Cosco Logistics*, Sino Railway*,
Sinotrans*, Kerry Logistics*, Pantos Logistics*, DSV*,
Belintertrans*, Silvirom*, Gebr. Weiss*, Panalpina*, etc.
Container operator
InterRail Services, Russkaya Troyka, Hupac Interna-
tional Logistics, Far Eastern Transport Group (DVTG)*,
Far East Land Bridge (FELB)*, China Railway Express
(CRE)*, Sino Railway*, Hunan Xiang Ou Express Lo-
gistics*, Hao Logistics*, YuXinOu Logistics*, Yiwu CF
Intl. Logistics*, HLT Intl. Logistics Ningbo (H&T)*,
Wuhan Asia-Europe Logistics (WAE)*, etc.
National railway
Russian Railways (RZD), Belarussian Railways (BC),
Kazakhstan Railways (KZH)*, Chinese Railways
(KZD)*, Deutsche Bahn (DB)*, Polish State Railways
(PKP)*, Latvian Railways (LDZ)*, Railcargo Austria*
Affiliated company
for container
DB Intermodal, TransContainer, KTZ Express*, United
Transport & Logistics Company (UTLC)*, CRInter-
modal*, China Railway Container Transport (CRCT)*,
Trans Eurasia Logistics (TEL)*, YuXinOu Logistics*
Container owners
Maersk, Evergreen, Seaco, China Railway Express*,
Far East Land Bridge (FELB)*, TransContainer*,
Far Eastern Transport Group (DVTG)*, Pantos Logis-
tics*, China Railway Container Transport (CRCT)*, etc.
Terminal operator
Deutsche Umschlaggesellschaft Schiene-Straße (DUSS),
TransContainer, Duisport*, Russian Railways (RZD)*,
Far Eastern Transport Group (DVTG)*, CRIntermodal*,
China Railway Container Transport (CRCT)*,
PKP Cargo*, KTZ Express*
Railway agency
Kaztransservice, Transrail, Belintertrans*
Customs agents
Far Eastern Transport Group (DVTG)*, PKP Cargo*,
United Transport & Logistics Company (UTLC)*,
TransContainer*, Pantos Logistics*, Belintertrans*
Table 1: Principal market players in Eurasian rail freight container transport
Source: Davydenko et al., (2012), Pieriegud (2007), updates by the authors indicated with “*”
Currently, most of the goods transported on these Eurasian rail freight routes between China
and Europe are mainly household appliances, machinery and equipment, automotive vehicles
and spare parts, food and beverages, garment and electrical products (Wang, 2017). The type
of cargo transported by rail gradually shifted to higher value-added goods (Sárvári and Szei-
dovitz, 2016), whereas the types of cargo on the return trips from Europe to China are high-
value automotive products and luxury products as well as foodstuff and beverages.
Furthermore, it is important to understand who the major players in this container block train
market are. As there is no central organization or an integrated corridor management platform,
these Eurasian rail freight corridors comprise a variety of different market players due to the
railway systems spanning multiple countries and operators, which forms a complex contractual
network (Davydenko et al., 2012; UNECE, 2017; Jakóbowski et al., 2018). Table 1 shows prin-
ciple market players in Eurasian rail freight container transport as identified by Davydenko et
al., 2012), Pieriegud (2007), and updated based on author’s desk research and interviews with
main players in the Eurasian rail freight market.
Bottlenecks in Eurasian Rail Freight Operations
With its obvious advantage over traditional sea freight and air freight between Asia and Europe,
Eurasian rail freight has been witnessed a growing trend of popularity in recent years. However,
operating long-haul container block trains across multiple countries in short time is not easy, as
complex legal environment, technical limitations, physical constrains, capacity limits, and po-
litical issues post bottlenecks in Eurasian rail freight operations (Islam et al., 2013). In the fol-
lowing, some current bottlenecks in Eurasian rail freight operations will be elaborated.
Complex legal environment: As these block trains cross various countries, consequently, po-
litical and legal differences occur which has been identified as the primary bottleneck in Eura-
sian rail freight operations (Rodemann, 2013). From the operation perspective, differences in
transport and customs law lead to arbitrary transport documentation and border crossing proce-
dures (Kallas, 2012, Galushko, 2016, Jakóbowski et al., 2018; Zhu and Filimonov, 2018) which
slows down transit time and heavily affects service reliability. But at least some recent improve-
ments can noted: (1) the International Rail Transport Committee (CIT,
established a combined CIM-SMGS consignment note as a commonly accepted transport doc-
ument along the Belt route (Galushko, 2016), (2) the foundation of the Eurasian Customs Union
(EACU, including Russian Federation, Belarus, and Ka-
zakhstan in 2010 eased at the same time transit through these countries and (3) China joined
the TIR Carnet transit framework in 2017 which will allow soon end-to-end transit operations
(UIBE and IRU, 2017). However, along the Eurasian rail freight routes, national monopolies in
railway operations are still common so that no free market entry is possible. This is again a
major inhibitor, too, especially due to the fact that at present, almost all container block trains
between China and Europe have to pass through Russian territory (Rodemann, 2013;
Jakóbowski et al., 2018).
Technical limitations: Along the New Silk Road, railway technology lacks unified standardi-
zation which hinders interoperability of railway systems (Galushko, 2016, Panova et al., 2018).
For example, Russian Federation, Kazakhstan, Belarus as well as other Commonwealth of In-
dependent States (CIS) countries have broad gauge (1,520 mm), while China and most Euro-
pean countries use standard gauge (1,435 mm). Automatic gauge change technologies are ex-
isting but not in wide-spread use, so that either boogies of wagons have to be exchanged or
cargo have to be trans-loaded onto wagons with the correct gauge wide at least two times be-
tween China and Europe. However, the wide-spread use of 40’ containers (FEU) ease these
interoperability issues considerably - but it still takes about two to four hours to complete the
trans-load for a container block train. Beside this, technical infrastructure of railways en route
such as double track lines or electrification cannot taken for granted, which will also hinder an
uninterrupted transport (Liu, 2014).
Physical constrains: Rail operators always tend to use longer trains to make transports, customs
and documentations process more efficient (Woods, 2015). However, in China, a block train
can carry around 55 FEUs, on the TSR up to 75 FEUs, while in Europe, they are usually limited
to max. 44 FEUs, and also all freight trains have to give priority to passenger trains. Besides,
there is also limit on the structure gauge (or minimum clearance outline), in line with height
and width of tunnels and bridges that allow a train to access. Due to limited clearance for two
FEUs put on each other, container block trains running between China and Europe cannot run
double-stacked to add on capacity. What’s more, extreme weather condition with minus 40°
Celsius in Siberia can be a challenge for many sensitive goods. But according to Woods (2015)
and InterRail (2017), nowadays containers for such block trains are equipped with thermal in-
sulation and active temperature control systems whenever necessary.
Imbalanced cargo volume: In general, demand for goods exported from China to Europe is
higher than the other way around. Accordingly, the number of westbound block trains are about
three times of the eastbound ones (InterRail, 2017; Besharati et al., 2017; Vinokurov et al.,
2018, Jakóbowski et al., 2018). Reasons for this discrepancy are that (1) unlike in maritime
shipping, intermodal terminals in China are not co-located with distribution hubs and onward
carriage to final destinations may add up costs (Sárvári and Szeidovitz, 2016), (2) many Chinese
companies still hesitate to use the Belt route (Seo et al., 2017), and (3) it is not easy to fill
eastbound containers with European goods demanded at China as Russian Federation has im-
posed a ban on both import and transit of certain European food stuff through its territory and
so containers and wagons leave Europe quite often empty (Brinza, 2017; Jakóbowski et al.,
2018). However, a trend towards a more balanced ratio of westbound and eastbound cargo vol-
umes has been witnessed by major players such as DB Schenker (Woods, 2015) and InterRail
(InterRail, 2017).
Service Quality
It is commonly agreed that service quality is characterised by customer’s perception on service
(Shainesh and Mathur, 2000), so that it can be defined as “the difference between customer
expectations of service and perceived service” (Shahin, 2006). Accordingly, when service qual-
ity is to be evaluated, the difference between the services that customers expect and the services
perceived has to be examined. There are an array of factors and determinants to measure service
quality (Prasad and Shekhar, 2010). The most common used metrics for measurement of service
quality is called SERVQUAL, firstly proposed by Parasuraman et al., 1988). There, five di-
mensions - tangibles, reliability, responsiveness, assurance and empathy are used as basic in-
struments for service quality measurement in order to examine gaps between expectations and
perceptions (Parasuraman et al., 1988; Zeithaml et al., 1990). Although the SERVQUAL in-
struments has been widely used, proven to be valid and reliable in different service contexts,
they still need to be modified and adapted to reflect specific service settings (Prasad and
Shekhar, 2010). Based on the SERVQUAL metrics, RAILQUAL has been developed as a ser-
vice quality scale to measure the rail service quality passenger transport with three additional
dimensions - convenience, comfort and connection - added to the basic five SERVQUAL met-
rics (Prasad and Shekhar, 2010). To understand the service quality of freight transport, there
are an array of variables proposed by researchers in investigating shippers’ freight service de-
cision choice between different transport modes. Matear and Gray (1993) applied principal
components analysis to explore the underlying structure of the service choice decision for ship-
pers and freight suppliers when choosing between sea and air modes of transport (see Table 2).
Five principal component - carrier, route, timing, price characteristics and control over other
parties have been considered as important factors in modal choice.
Among these five principle components, Matear and Gray (1993) pointed out that frequency,
reliability (i.e. punctuality concerning time of arrival) and capacity (i.e. the availability of
freight space) are the most important ones. Later on, Rodemann (2013) as well as Seo et al.,
2017) confirmed that transport cost, transit time, as well as transit time reliability are the major
modal choice decision criteria concerning goods transports between China and Europe.
Principal Component
Service Attributes
Carrier characteristics
Arrival time; Fast response to problems; Handle special requirements and urgent
deliveries; Good relationship with carrier.
Route characteristics
Proximity to origin and destination; Optimised route choice.
Timing characteristics
High service frequency; On time collection and delivery; Short transit time;
Price characteristics
Low price; Value for money price; Special offer or discounts.
Control over other parties
Transport preference of trading partner; Documentation completed carrier.
Table 2: Service attributes for service choice decision
Source: Adapted from Matear and Gray (1993)
3. Comparison of Transport Modes
Now we want to examine the service quality of rail freight compared to the other current exist-
ing transport solutions carrying containerised cargo between China and Europe, namely sea, air
and sea/air transport modes.
As mentioned before, transport cost and transit time have been
identified as the two major components contribute to the service quality of freight transport. To
achieve this purpose, a trade-off model and a scenario analysis will be constructed based on
transport costs and transit time, to compare the cost and time differences of sending a contain-
erized shipment from China to Europe by sea, air, sea/air, or rail respectively.
Data Collection
Quantitative data obtained in this study includes quotes of transport, transit time, distance of
each routes for each mode on each route (see Table 3). In order to maintain the integrity and
reliability of data collection process, freight rates for rail and sea/air were requested from major
container operators or forwarders through direct contacts in Austria, Germany, China and Ka-
zakhstan and average freight rates for sea and air were retrieved from Freightos
( and SeaRates ( Both freight rates and
transit times presented are averages based on a sample of quotations for each transport leg.
Furthermore, a set of assumptions have been made to make the different modes comparable:
Transport routes are all terminal-terminal intermodal, excluding local cartage service at both
origin and destination. Accordingly, ancillary costs (i.e. fees for customs clearance, security
checks, agency, insurance, document and container handling) are not included.
Freight rate quotations for all modes of transport are for a FEU full container load (FCL)
freight-all-kinds. The cargo transported in a FEU by sea and rail is assumed max. 20 tonnes,
and for air and sea/air max. 10 tonnes. Concerning transport capacity, it is assumed that max.
45 FEU can be transported per block train, max. 3 FEU per plane (Rodemann, 2013; Woods,
2015) and 9,000 FEU or more per vessel by sea (Rodemann, 2013).
Transit times stated were as indicated by the freight operators or forwarders. However, de-
lays caused by congestions at intermodal terminals, border crossing points, documentation
handling processes still occur on a regular basis (Galushka, 2016).
The sea/air concept is a multimodal transport of cargo by sea on its first leg followed by air
which comes along with „half the time half the cost“ (Raguraman and Chan, 1994).
Data Collected
Data Type
Collection Method
FEU FCL freight rate for all
possible routes from Asia to
Europe, transit time along
major corridors
European and Central Asian
block train operators
Chinese and Central Asian
rail freight forwarders
Direct contacts,
online enquiries,
site visits,
skype call meetings
FEU FCL freight rate from
China to Germany
Transit time for the routes
Route distance
Drewry container freight
rate monthly report
Online enquiries,
secondary data collection
Unit rate (per kg) and transit
times from China
to Germany
Online inquiries
Unit rate (per kg) from
China to Germany
Transit time for the routes
European freight forwarder
Sea/air freight operator
Direct contacts
Secondary data collection
Separate distance of each
transport leg and total dis-
tance of each route
Online enquiry
Table 3: Data collection summary
It is noted as all the primary data from direct contacts were collected during the period from 1st
June to 31st July 2017, freight rate quotations and transit times stated may be subject to change
due to the volatility of the freight rates in the marketplace. In this sense, the freight rates and
transit times presented here reflect a “snapshot” of current market situation and need to be con-
sidered in a more general context.
Transit Times and Costs Comparison Results
To build up a realistic and at the same challenging scenario, Shanghai in China and Hamburg
in Germany were selected as the origin and destination points, as both cities have a seaport
serving as a major container hub with direct connection on the China-Europe trade lane and are
quite often used when it comes on freight rate benchmarking.
Table 4 summarises the transport costs and average transit times of shipping a single FCL ship-
ment of one FEU from Shanghai to Hamburg for four modes of transport on a terminal-terminal
basis for 2017 compared to figures raised by U.S. Chamber of Commerce (2006) with sea/air
calculated separately based on historical freight quotations available to the authors.
By freight rate, sea was and is still the cheapest option and air is very much higher than the
other modes. Sea/air transport costs are around half of air, whereas Eurasian rail freight is about
80% less costly than air and ranked next to sea as the second cheapest option. In terms of transit
time, which includes the actual time of transport plus time when a container is waiting at ter-
minals or borders crossings for customs clearance or trans-loading gauge changes etc., air (3 to
5 days) is by far the fastest transport solution from China to Europe, and rail (14 to 16 days) or
sea/air (18 to 20 days) are about half of the time than sea (usually 30 to 34 days, but could be
much longer when a container is subject to transhipment en route).
Transit Time
Transport Cost
Transport Speed
Table 4: Transport costs and transit times for different transport modes in 2006 and 2017
Source: U.S. Chamber of Commerce (2006), own calculations.
Furthermore, these different modes of transport come along with different routing, so that the
distance of each mode travelled varies and cost per kilometres is in line with the total transport
cost of each mode. In terms of average transport speed, sea/air (about 843 km/day) is faster than
rail (about 704 km/day), but due to its slower sea leg (about 627 km/day), the total transit time
of sea/air is still higher than Eurasian rail freight.
Finally, most striking is a significant shift of transit times in the past decade from 45-50 days
to 16 days on average with now only 1 or 2 days of variation due to different routing. While
rail freight rates have shown a slightly decreasing trend in recent years as well, the transport
costs decreased from 8,450 USD to nowadays 6,350 USD for a FEU from Shanghai to Ham-
burg. On some specific routes from inland China cities (i.e. Chongqing or Changsha) to Ger-
many via Kazakhstan, these transport costs can be even lower with around 3,700 to 4,500 USD
due to subsidies granted by Chinese government (Bresharati et al., 2017; Qiwen and Xianliang,
2017; Vinokurov et al., 2018).
Scenario Analysis Based on Cargo Type
In the previous section it has been discovered that rail comes along with much shorter transit
time than sea and much lower cost than air which qualify it to be an alternative mode of
transport to fit into the market niche of shipping high-value and time-sensitive goods. But goods
transported by Eurasian rail freight cover a wide range from high value goods such as luxury
products, machinery and equipment, automotive vehicles and spare parts, time-sensitive goods
such as food and beverage, to general commodities such as textile and construction material.
Goods are considered to be time sensitive when they are subject to depreciation and uncertain
demand due to “inventory holding costs, perishability, rapid technological obsolesce, and un-
certain demand” (Hummels, 2007; Hummels and Schaur, 2013). Furthermore, inventory hold-
ing costs include capital cost of the goods in transit, cost of buffer stock at destination ware-
house to accommodate variation in arrival time. In addition to this, depreciation costs include
spoilage of perishable goods or rapid technological obsolescence. Hence, time of goods spend
in transit will impose a combination of inventory holding and depreciation costs on consumers.
Moreover, Hummels and Schaur (2013) defined estimated value of time per day transit time
which depends mainly on the value of cargo and expressed these time costs in tariff equivalents
by calculating the estimated value of one day saved in transit for each product. To reflect how
much consumer’s value of timely delivery for the full range of product categories being traded
and shipped, it was estimated that each day of goods in transit is equivalent to a tariff of about
1% per day levied on value of cargo for most goods employing trade and shipping data from
U.S. imports of merchandise database. This estimation varies over the type of goods, as bulk
products and raw materials are less time sensitive than complex manufactures and perishable
goods are subject to rapid depreciation, such as fresh fruit and vegetables (Hummels, 2007). As
the daily depreciation rate of goods with high time sensitivity and high value can be as high as
about 2%, one day in transit translates into a tariff equivalent of 2%.
When combining these findings with transit times and transport cost figures as shown in Table
4, estimated values of time per days in transit can now be employed for scenario analysis to
include time sensitivity and value of cargo transported. Then the value of time in transit (defined
as a combination of inventory holding and depreciation cost) allows to assess the relations be-
tween transport costs, transit time and total logistics costs for goods of high versus low time
sensitivity between different modes of transport. Or more strictly defined:
Inventory holding and depreciation costs are incorporated in form of a tariff equivalent as
a proxy. In line with the estimations of Hummels and Schaur (2013), this tariff equivalent
is set to 1% per day of cargo value for goods with lower time sensitivity, and 2% per day
for goods with higher time sensitivity.
Calculation of total logistics costs only include the direct transport costs and indirect inven-
tory holding and depreciation costs during the transit expressed in this tariff equivalent.
An average shipment is assumed to be 10 tons per FEU, so that cargo value in USD per kg
can be easily calculated and compared over all four modes of transport.
Figure 3: High time vs. low time sensitivity scenario
Results of the scenario analysis are shown in Figure 3 and can be summarized as follows:
Whenever goods shipped have a low time sensitivity, and cargo value is around 2.55 USD/kg,
rail is almost equal to sea and after around 21.78 USD/kg, air gets cheaper than rail. If goods
shipped have a high time sensitivity, rail is already cheaper than sea for cargo values of higher
than 1.23 USD/kg and air is then cheaper when cargo value is higher than 10.89 USD/kg.
Hence, in both scenarios, sea is the cheapest mode of transport when cargo value is low. Then
rail fits into the niche and becomes the cheaper solution for cargo values ranging from relative
1 3 5 7 9 11 13 15
Tsd USD High Time Sensitivity Scenario
1 3 5 7 9 11 13 15
Tsd USD Low Time Sensitivity Scenario
low value to average and high value goods with sea/air always coming along with higher total
logistics costs.
To interpret these results, it is important to understand value/weight ratios and carrier liability
for cargo. According to own calculations based on EUROSTAT COMEXT dataset DS-016890
from 2000-2013, the export price of goods traded between China and European Union (EU)
ranges from around 6 USD/kg to 23 USD/kg, and the majority share of the products have a
value under 6 USD/kg. Moreover, it is important to note, that carriers on all transport modes
have certain liability limits for loss or damage of goods being transported. For example, air
carrier liability is limited to about 26 USD/kg (or max. 19 SDR/kg following to Montreal Con-
vention of 1999 or IATA Resolution 600a), in rail freight it is max. 22 USD/kg (or max. 17
SDR/kg according to CIM of 1999 and SMGS of 2015 with no limitation other than value of
cargo) and in sea freight usually max. 3 USD/kg (2.5 SDR/kg in Hague-Visby Rules of 1968,
see e.g.
Based on the above findings, preferred modal choice can be split in 2x2 scenarios as follows:
Scenario I: High-value cargo with high time sensitivity: Whenever cargo value is above 12
USD/kg (120,000 USD per FEU), it can be generally considered as high-valued (U.S. Chamber
of Commerce, 2006). This is especially true for automotive spare parts and high-tech products,
which may require frequent weekly replenishment. In this scenario, air with the shortest transit
time of less than one week and most of the time lowest total logistics costs is the most favour-
able solution. However, whenever special space and weight limitation occur for air, rail with
less restriction on cargo type and much larger capacity available might be an alternative solution
at least in some cases.
Scenario II: High-value cargo with low time sensitivity: High-value cargo with low time sen-
sitivity can be luxury garments and leather goods. In this scenario, rail with about 2 weeks
transit time is able to cover a wide range of goods from 2.46 USD/kg to 21.48 USD/kg with the
lowest total logistics costs in comparison to all other modes of transport.
Scenario III: Low-value cargo with high time sensitivity: When the average cargo value is
around 6 USD/kg (60,000 USD per FEU) or less, this can be considered as low-value cargo. In
this scenario, for goods with short lead-time demand (e.g. high-fashion apparel, electronic ap-
pliances), rail continues to be the favourable option with half of the transit time than sea and
much lower transport cost and larger capacity than air. Rail is able to provide cheapest total
logistics cost for a range from 1.23 USD/kg to 10.89 USD/kg.
Scenario IV: Low-value cargo with low time sensitivity: For the majority share of transport
goods with low-value of less than 2.46 USD/kg, sea with by the far largest shipping capacity
available is the cheapest solution closely followed by rail.
Discussion of Results
BRI must be considered as a major enabler to the rapid development of Eurasian rail freight
within the last decade and it can be regarded favourable for three reasons:
Faster than sea and cheaper than air: In Section 3.2, a general comparison based on the costs
and transit times among rail, sea, air and sea/air was conducted, which pointed out that Eurasian
rail freight is about 80% cheaper than air with only half of the transit time of sea. Besides, a
historical shift of its positioning in the market has also been captured - its transit time has sig-
nificantly shortened from one month (or more) to only two weeks or even less. The driving
force behind this significant improvement of its service in recent years can be traced back to
two main factors. On one hand, BRI focuses on the Central Corridor rather than the traditional
Northern Corridor, which helps to boost domestic economy in the rural west part of China, as
well as avoids to deal with Russian monopoly on the TSR. Therefore, new railway infrastruc-
ture projects and dedicated container block train services launched under BRI have greatly re-
vived Eurasian rail freight. On the other hand, changes to global trading patterns and increasing
demand for the speed to market also drive the development of intermodal logistics solutions
both within Europe and along the New Silk Road (Davies, 2017).
Alternative to air for time-sensitive goods: Certainly, a pure transport cost comparison is not
sufficient, as other costs occur during the transport process like inventory-holding and depreci-
ation cost are worth to take into consideration. Therefore, in Section 3.3, they have been incor-
porated to compare the total logistics costs of rail, sea, air as well as sea/air where rail stands
out as the most favourable transport solution when it comes on time sensitive goods with a
cargo value ranging from 1.23 USD/kg to 10.89 USD/kg. In the past, air used to be the only
option when shipping high-value, time-sensitive goods. But as transit time shortened and
transport service got more reliable, rail becomes a perfect alternative for time-sensitive goods,
especially for those with average cargo value not necessarily worth to be transported by air.
Besides, rail freight with higher capacity than air can accommodate almost all kinds of contain-
erized cargo, which again demonstrates higher service availability.
Alternative to sea for low-value goods: Again, our scenario analysis found that when shipping
goods with low time sensitivity, rail would be the cheapest option for cargo ranging from 2.46
USD/kg to 21.78 USD/kg. Sea used to be the best option for low-value goods. However, present
short-term flexibility tactics executed by liner shipping companies like slow steaming and re-
routing of vessel as well as blanking of sailings results in longer and less reliable transit times
(Munim and Schramm, 2016) and this cannot fulfil the requirement for today’s agile supply
chains. In this case, rail with a speed advantage over sea can also cover a wide range of goods
from low to high value. Instead of to upgrade from sea to air (or sea/air), rail gives the customer
a window of opportunity to meet deadlines without bearing full expense of air (Davies, 2017).
Since the global economy continues to slow down, the world searches for new engines to drive
trade growth, the BRI offers “a major development framework and opportunity for connectiv-
ity, international trade and economic development” (Davies, 2017). The momentum of Eurasian
rail freight has already been witness to enhance connectivity and trade growth between China
and Europe. Implications of this on supply chains can be summarized as follows:
Not competition, but another option: Our calculations in Section 3.2 clearly demonstrate that
Eurasian rail freight service is an emerging competitive solution - faster than sea and significant
cheaper than air. However, rather than being seen as a threat, it provides a potential alternative
for companies that no longer like to consider air (or sea/air) as the only options when shipping
high-value and/or more time-sensitive goods. This offers a cost-efficient option to tailor freight
lead time relevant to production (Davies, 2017).
The value of short transit time: Matear and Gray (1993) suggested that when shipper and
freight forwarders making the decision on freight service choice, transit time is frequently con-
sidered as more important than a low freight rate. As shown in Section 3.3, a substantial amount
of inventory holding and depreciation costs will add up to the total logistics costs during
transport if transit time of a shipment is too long. This is especially critical for perishable or
time-sensitive goods with frequent changes in consumer preferences (U.S. Chamber of Com-
merce, 2006). Eurasian rail freight with shorter transit time than conventional sea and higher
reliability is able to help shippers to reduce total logistics costs and gain more flexibility on
cash flow and liquidity.
Bring agility to supply chains: Shorter and more reliable transit times give Eurasian rail freight
advantage of higher accountability. On one hand, this will allow companies have more control
over their logistics operation and production forecasting (Zhang, 2013); on the other hand, it
will encourage companies conduct “just-in-time” business practices with timely delivery in or-
der to reduce production costs by minimising inventory (U.S. Chamber of Commerce, 2006).
In addition, with more frequent scheduled container block trains and adding more terminals of
origin and destination, the Eurasian rail freight service is able to offer a variety of end-to-end
routing options, which again gives shippers more flexibility than sea and air. Moreover, high
reliability of service delivery and flexibility of service availability will bring agility to com-
pany’s supply chains, which potentially offer companies a chance to tailor made their supply
chains based on different product categories.
4. Conclusions
This paper examined the service quality of Eurasian rail freight based on transit times and
transport costs, and a scenario analysis with a special focus on cargo type and associated total
logistics costs has been used to identify its market niche. Taking a transport of a FEU from
Shanghai to Hamburg as an example, we found that present Eurasian rail freight service fits
into the sweet spot between the sea and air; it is about 80% cheaper than air with only half of
the transit time of conventional sea. Our scenario analysis further suggests that when shipping
time sensitive goods with cargo values ranging from 1.23 USD/kg to 10.78 USD/kg, rail is
cheaper than all other modes of transport and much faster than sea - the same is valid for goods
with lower time sensitivity ranging from 2.46 USD/kg to 21.78 USD/kg.
Moreover, some practical recommendations on the way forward for Eurasian rail freight service
development in the OBOR era should be noted. On strategic level, high-level collaborations
among government of countries and railway stakeholders along the Belt of BRI are required to
establish favourable legal and technical agreements to facilitate Eurasian rail freight operations.
On operational level, keep rail freight rates low to maintain competitiveness, optimise routing
to lower transit times, target market to seize profit, improve public awareness to gain business
are recommended for Eurasian rail freight operators to keep developing in this new OBOR era.
Reflecting research process and findings, some limitations have to be remarked. First, this paper
intends to examine the service quality of Eurasian rail freight and compares it with other modes
of transport. By doing this, it focused on two quantifiable attributes – transport costs and transit
time. However, there are other important attributes that contribute to service quality as well,
such as transit time reliability, service availability, environmental impact etc., which were men-
tioned in the paper but not included in the comparison model. Second, given that the Eurasian
rail freight market is still in its infancy state (Sárvári and Szeidovitz, 2016), rail freight quotes
collected by the authors may not fully reflect long-term competitive freight rates that companies
get in the markets, as freight quotes obtained e.g. from freight forwarders might be already
being bundled with other value-adding services on top of bare costs of rail transport. Moreover,
Chinese government is providing subsidies to Eurasian rail freight operations under BRI
(Bresharati et al., 2017; Qiwen and Xianliang, 2017), which may to some degree hide real costs
of transport service provision. Beside this, costs of local cartage service at both origin and des-
tination as well as other ancillary costs were not included in our calculations. In sum, this study
does not intend to provide a pricelist for individual business decisions, however it does offer
guidance for assessing transport options available for shippers. Last but not least, much larger
data samples, specific cost models and detailed market insights are required to get the full pic-
ture. Accordingly, further research could investigate traffic volume on the different rail routes
as shown in Section 2.1. to capture the Eurasian rail freight market landscape, thus to identify
market demand for rail and to provide recommendations for further route optimisation. More-
over, some key attributes of service quality briefly outlined in Section 2.4. such as transit time
reliability and service availability not explicitly included here may be subject to surveys to
capture full aspects of service quality. Finally another direction for further research would be
to collect more detailed data of freight costs and transit time which enables to compare total
logistics cost of shipping goods from specific origins to destinations by rail, sea, air and sea/air
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... The data of train, freighter and RORO are taken from State-Owned Companies and truck data are from Private Companies. The aeroplane is not used as one of the parameters due to the high cost and cannot much loading of goods much, so it is used as an exclusive alternative for sending small goods and fast time [18][19][20]. ...
One way to minimize national logistics costs is to develop multimodal transportation. The steps for multimodal development are forming a linear model for each transportation mode, the simultaneous formation of a linear model, and forecasting and simulation of the minimum transportation costs. Area partition based on distance can be used as a solution for selecting transportation modes in multimodal with a certain distance. It can be useful in reducing transportation costs that only rely on unimodal, namely trucks. The estimation of reducing logistics costs is by forecasting goods that will pass through transportation modes in 2025 and making the simulation. Train or truck is used for short distances such as moving goods from factories or warehouses to transhipment points and from transhipment points to consumers or retailers. Trains, freighters and planes are used as the main routes as needed. The simulation results show that national logistics costs reduce by 17% when using the lowest-cost transportation mode in the area division.
... These limitations are divided into two categories as physical and nonphysical barriers. Physical barriers occur due to technical reasons such as varied railway systems (NIIAT, 2017), varied gauges (He, 2016), or scarce rolling stocks (Zhang & Schramm, 2018); inadequate or complete lack of infrastructure at a given link or node; and inability of handling a certain capacity or certain objects. Nonphysical obstacles negatively affect the quality of services, e.g., improper handling of cargo, transparency level of procedures, and policies (NIIAT, 2017); inefficient BCP Procedure (ESCAP, 2018) (CAREC, 2018); inconsistent custom regulations (Yan & Filimonov, 2018) (Jakóbowski,et al.,218); border security (Haiquan, 2017) (Islam, et al., 2013); and shipment disparity (Leijen, 2019) (Feng et al., 2020). ...
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Rail freight has exhibited significant growth within the last decade between Asia and Europe, especially after the announcement of China's Belt and Road Initiative in 2013, which consists of seaborne and land routes. Within the latter one, this paper focuses on the railroad network that consists of six major corridors. Using the software AnyLogic (Version 8), we give a macroscopic model designed as a GIS-based discrete-event model of rail freight from China to Germany under existing border control point capacities, eventually providing a general overview toward the classification of different routes and countries and later ranking them according to their criticality index. This criticality index is computed as a product of time variance and the Logistics Performance Index. The former is obtained through various scenario analyses within the paradigm of shortest route and current border control points having constant capacity, but variable number of trains per day. In an attempt to understand the network under stress, the results obtained from this study also establish the need to increase the processing capacity at border control points to maximize the utilizability of this transcontinental railway network. The results show that lower capacity at border control points leads to higher time for trains to reach their destination. Stakeholders who are actively
... The SLB with a total length of 9,258 km linking Russian Far East seaport Vladivostok to Moscow 1 was completed in 1916 (Rodrigue 2016). As its development, it further access to some European countries such as Finland, Latvia and Poland (Schramm and Zhang 2018). Nowadays the SLB section has been integrated as one section under the framework of the NELB (see Figure 4.29). ...
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This study applies a system thinking view to argue that transportation infrastructure is a strong driving forces for the dynamic evolution process of the GLN. Especially in context of the BRI, with its large scale and broad scope transportation infrastructure construction and upgrade, the spatial structure of GLN is rapidly altering due to the changing competitiveness of some logistics nodes and links. These changes can further induces a sequence of dynamic process, such as development of local logistics industries, MNEs’ relocation behaviors, industrialization of local regions, etc, hence substantially shift the pattern of the GLN on a long-term view. Case studies of Piraeus port and Gwadar port were conducted to validate the impacts of ports infrastructure improvements on global shipping network and its potential for regional economic growth. Apart from sea port, a very important aspect is the improvements of land connectivity and the construction of dry ports. With the operation of CR Express, China and Europe are connected passing through the vast territory of landlocked countries in between. Through investigating the case of Khorgos dry port city, the study also presents the pattern shift induced the large potential of land logistics nodes.
... 22 The pattern of costs of rail, sea and air transport across Eurasia suggests that there may be opportunities for rail transport to gain market share as speed, reliability and associated services improve. The relative attractiveness of rail vis-à-vis sea transport between China and Europe increased substantially during the 2010s as better services , and in Zhang (2017-reported in Schramm and Zhang 2018 were offered, journey times were reduced, and efficiency improvements pushed down rail freight rates ( Fig. 10.1). 23 Meanwhile, sea freight rates fell by less and shipping times increased due to slow steaming. ...
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This open access book features various studies on democratization, transformation, socio-economic development, and security issues in the Organization for Security and Cooperation in Europe (OSCE) geographical region and beyond. Written by experts and scholars working in the field of human dimension, security, transformation and development in Europe and Asia, particularly in post-soviet and communist countries, it examines the connectivity that the OSCE provides between the East and the West. The 2021 edition of this Compilation Series of the OSCE Academy presents studies on peace and conflict as well as political regime development in various member states of the OSCE as well as their economic, security and human rights performance and the challenges countries and society face currently. The OSCE is working in promoting Human Rights and Democratization under the notion of Human Dimension of ODIHR and is enhancing securitization and development policies in Eurasia, Europe, Central Asia and North America since 1991. 2021 marks the 30th anniversary on the tremendous efforts in promoting democracy, security and development. This compilation reviews some of these efforts in light of this anniversary, the achievements and shortcomings.
... 22 The pattern of costs of rail, sea and air transport across Eurasia suggests that there may be opportunities for rail transport to gain market share as speed, reliability and associated services improve. The relative attractiveness of rail vis-à-vis sea transport between China and Europe increased substantially during the 2010s as better services , 2006, and in Zhang (2017-reported in Schramm and Zhang 2018 were offered, journey times were reduced, and efficiency improvements pushed down rail freight rates ( Fig. 10.1). 23 Meanwhile, sea freight rates fell by less and shipping times increased due to slow steaming. ...
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The Organization for Security and Co-operation in Europe (OSCE), while primarily a security organisation, has always included economic and human baskets or dimensions. Currently, the Office of the Co-ordinator of OSCE Economic and Environmental Activities operates in four main areas: (1) good governance and anti-corruption, (2) money laundering and financing of terrorism, (3) transport, trade and border-crossing facilitation, and (4) labour migration. This chapter addresses developments in Central Asia since the dissolution of the Soviet Union that are relevant to the third area of OSCE operations. The chapter’s focus is on the potential for the landlocked Central Asian countries to become land-linked, using improved transport connections between East Asia and Europe to promote economic development through export diversification and growth. Rail services across Central Asia improved considerably during the 2010s. They have been resilient, despite strained political relations between Russia and the EU since 2014, and rail traffic between Europe and China continued to increase in 2020 despite the shock of COVID-19. Further infrastructure improvements are promised under China’s Belt and Road Initiative. However, the expanded network has been little used by Central Asian producers to create new international trade, and the improved infrastructure represents a potential opportunity rather than a past benefit. If the Central Asian economies are successful in taking advantage of the opportunity, it will stimulate their trade across the Eurasian region and help economic diversification. The main determinant of success will be national policies and national economic development. The chapter concludes with a discussion of the role of multilateral institutions and, in particular, the prospects for OSCE collaboration with existing fora to promote cooperation and economic development in Central Asia.
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Sürdürülebilir küresel tedarik zincirlerinin önem kazandığı dünyamızda, bu kitap, tedarik zinciri performansına odaklanarak pandemi sonrası ortaya çıkacak yeni dünya düzeninde demiryolu yük taşımacılığını etkileyen temel faktörlerin araştırılmasını ve değerlendirilmesini amaçlamaktadır.
Trade and transport are in constant change to better meet the needs of global value chains. New logistics trends in the Eurasian supply chains have put rail transport into the focus of service providers as an alternative to maritime transport. The railway sector has begun to revive as container block trains travel between Europe and Asia—and its growth becomes especially apparent in the transport of high-value and capital-intensive goods. This paper aims to summarize recent developments in the improvement and expansion of Eurasian railways. We also wish to highlight the main opportunities and challenges on the Eurasian Southern rail corridors by focusing on the Middle Corridor. Exploratory research was carried out through a varied literature review.
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This paper develops a game-theoretic model to analyze the competition between two container freight transportation modes (shipping and railway) using competitive game strategic interactions method, namely, deterrence, by taking account of the most cost-effective scale of the transportation capacity settings. The competition was set against the background of China’s Belt and Road (B&R) Initiative as a new situation for intercontinental Sino-Europe container freight transportation. The behavior of each mode (modeled as a carrier, resp.) is characterized by an optimization model with the objective of minimizing its cost by setting optimal basic freight rate and transportation deployment. A firm can use this method to compare the difference in the time value of the cargos and reduce the expense during the whole transportation process. Finally, the developed model is numerically evaluated by a case study of intercontinental transportation between Hefei (China) and Hamburg (Germany). The results show that deterrence effects largely depend on the deterrence objective, and the differential in the cost of two transportation modes tends to be stable with higher values in the deterrence objective. In the new intercontinental circumstance, the mode of railway transportation provides a new way to transport the cargos between China and Europe.
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This expanded and revised fourth edition of The Geography of Transport Systems provides a comprehensive and accessible introduction to the field with a broad overview of its concepts, methods and areas of application. Aimed mainly at an undergraduate audience, it provides an overview of the spatial aspects of transportation and focuses on how the mobility of passengers and freight is linked with geography. The book is divided in ten chapters, each covering a specific conceptual dimension, including networks, modes, terminals, freight transportation, urban transportation and environmental impacts, and updated with the latest information available. The fourth edition offers new material on the issues of transport and the economy, city logistics, supply chains, security, energy, the environment, as well as a revised content structure. With over 160 updated photographs, figures and maps, The Geography of Transport Systems presents transportation systems at different scales ranging from global to local and focuses on different contexts such as North America, Europe and East Asia. This volume is an essential resource for undergraduates studying transport geography, as well as those interested in economic and urban geography, transport planning and engineering. A companion web site, which contains additional material, has been developed for the book and can be found here:
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CHINA RAILWAY Express (CR express) refers to the international container train running in the East Asian Economic Circle and the developed European Economic Circle, and it is an important link in the development of “The Belt and Road”. However, as CR Express is still in the early stages of development, it is still on the way to fully market-oriented operations, and also has some problems such as high overall transportation cost, disorderly competition and other issues. From the perspective of government subsidies, this paper by searching the relationship in incomplete information dynamic game between local government and local relevant enterprises, gets the optimal subsidy amount for the government to obtain the maximum social benefit. The results can provide a reference for the government to formulate a reasonable subsidy policy and for the CR express to realize market-oriented.
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This study introduces a state-of-the-art volatility forecasting method for container shipping freight rates. Over the last decade, the container shipping industry has become very unpredictable. The demolition of the shipping conferences system in 2008 for all trades calling at a port in the European Union (EU) and the global financial crisis in 2009 have affected the container shipping freight market adversely towards a depressive and non-stable market environment with heavily fluctuating freight rate movements. At the same time, the approaches of forecasting container freight rates using econometric and time series modelling have been rather limited. Therefore, in this paper, we discuss contemporary container freight rate dynamics in an attempt to forecast for the Far East to Northern Europe trade lane. Methodology-wise, we employ autoregressive integrated moving average (ARIMA) as well as the combination of ARIMA and autoregressive conditional heteroscedasticity (ARCH) model, which we call ARIMARCH. We observe that ARIMARCH model provides comparatively better results than the existing freight rate forecasting models while performing short-term forecasts on a weekly as well as monthly level. We also observe remarkable influence of recurrent general rate increases on the container freight rate volatility.
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What has now been coined the term XXI Century Silk Road had evolved from a speech given by Chinese premier Xi Jinping in Kazakhstan in 2013. It was initially a plan aimed at promoting the bilateral relations of China and its neighbors; however, the initiative had since then traversed the region’s borders and become a global project. This paper examines the Silk Road Economic Belt initiative in light of Chinese-EU relations. It reviews the initiation of the Silk Road Project and focuses on its political economic analysis through investigating the potential routes the Belt can take, the EU-Chinese trade and investment standings as well as the global political context that the increased cooperation and connection is likely to influence. The paper uses the Modern Silk Road concept as an example of China’s foreign policy in the wake of globalization and the emergence of a new multipolar world order. To set the stage we will begin with a political-economic approach of the New Silk Road. Highlighting the possibilities of Chinese high culture, which accommodate global governance, we state that the Modern Silk Road project is one of its materialized forms. The concept of the New Silk Road (together with the Eurasian Union) denies the previous era of corruption and personality cult and indicates a milestone in the development of China, proving that it is already a globally responsible power (Värk, 2015). Even if transport by land is significantly more expensive than transportation by sea, the New Silk Road may have significant advantages: It may take only two weeks, saving potentially a week in shipping time, and diversify China’s dependence on sea transport that could reduce the importance of its regional diplomatic conflicts. Already these aspects show that the purpose of the Modern Silk Road is basically not to explore cost-efficiency but to contribute to the establishment of a new, multipolar world order. The fact that the Modern Silk Road is a supply-driven concept in spite of the historical one underlines this argument. Even if politics dominate, henceforward directing the economic activities, we will nonetheless examine the China-Eastern European relations through the lenses of trade and investment as well. After the initial analysis and description of the Silk Road Economic Belt as a tool of Chinese foreign policy, the paper goes on to examine the potential routes the railway takes from China to Europe. It reviews the trade and investment ties that the two entities share and assesses how this initiative contributes to the rise of Europe and China beside the USA. Lastly, it outlines how various regional and global powers are affected by the renewal of the Silk Road.
China and some of its trade partners in Western Europe apply different legal regimes for international carriage of goods by railway - respectively Agreement on International Railway Freight Transportation (SMGS) and Uniform Rules Concerning the Contract of International Carriage of Goods by Rail (CIM). For transportation of goods by railway between China and Western Europe both the CIM and the SMGS are often applicable. China's initiative "the Belt and Road" promotes development of railway transport in Eurasia and creates new incentives for comparative study between those two international legal systems. This article provides a brief historical outline of comparative studies between the CIM and SMGS. This article also purports to show that some similarities and differences between the two regimes might be better understood from the perspective of comparative legal history. Taking into account inter alia the common origin of the current versions of the CIM and SMGS in the 4th revision of the CIM of 1933, differences and similarities between two legal regimes have been analysed with regard to the following topics: the scope of application of the CIM and SMGS; the nature of the carrier's liability under the CIM and SMGS; exclusivity of the CIM, exclusivity of the contract of carriage under the SMGS; period of responsibility; persons for whom the carrier is liable.
Multimodal transportation is a key component of modern logistics systems, especially for long-distance transnational transportation. This paper explores the various alternative routes for laptop exports from Chongqing, China to Rotterdam, the Netherlands. It selects seven available routes for laptop transportation from Chongqing to Rotterdam. The multimodal model was adopted to demonstrate alternative routes using various factors such as transport cost, transfer cost, transit time, transport distance, document charge, port congestion surcharge, customs charge, confidence index and so on. Among possible alternative routes, the results indicate that the route 6 was the fastest routes except for the air transport (route 7), while the route 1 was the cheapest and safest way. Nonetheless, route 1 may be not suitable for the laptop transport due to the importance of timeliness. The logisticians may able to utilize this research's findings to make a balance between transit time and transport cost for effective multimodal transport of laptops from Chongqing to Rotterdam.
This paper intends to investigate the ways to maintain sustainable china –europe block train operation. Then it makes an analysis of the current situation of China-Europe Block Trains, and points out it’s fast, booming development. Meanwhile, the paper collects some data about container rate that causes the loss of operation parties. To deal with such challenge, China’s provincial governments provide subsides to maintain operation; however, it is looking for solutions to the problem, in case the challenges are sustainable.It, also, has made some proposal for using empty return wagons and coantainer from Europe efficiently.
The sea-air intermodal transportation service is considered a relatively recent entrant into the transportation industry involving the movement of cargo by sea on its first leg of its journey and air on its second. Its transit time is about half that of seafreight and the cost is reduced to half that of airfreight. The "half the time half the cost' notion was touted as the mainstay of the concept and proved impressive on paper as the service sought to capture the advantages of both sea and air transportation giving users a greater flexibility to meet a variety of schedules and situations. This paper traces the global trends in the development of sea-air transportation from its teething stages to rapid growth and subsequent stagnation over the past 30 years. The pattern of growth highlights the question of the viability of the concept which is also examined in the paper. -Authors