- Maersk announced the suspension of its intercontinental rail service to-and-from Russia.
- In the past two years, the volume of goods has increased by 29% to 1.46 million TEU thanks to the increasing popularity of China-Europe railway freight.
Stop taking reservations on China-Europe railway
Yesterday, Maersk, a strong supporter of the Russian railway as it avoids congested hotspots on the China-Kazakhstan border, announced the suspension of its intercontinental rail service to-and-from Russia.
Jacky Yan, founder and CEO of New Silk Road Intermodal, an international logistics and shipping business with offices in Europe and China, told The Load Star: “Currently, most trains are passing through Russia and Belarus to Poland, so the service remains unaffected. Likewise, the train which used to pass through Ukraine has been diverted to Malaszewicze in Poland, and the train to Kyiv has been stopped because of the war.”
Jacky Yan also added: “Some bookings were cancelled because sanctions against Russia caused payment problems for US dollars and some were cancelled due to concerns about cargo damage.”
In addition, a Taiwanese electronics manufacturer has suspended orders with Chinese railways, citing concerns that their goods could be “stuck on the Russia-Poland border.”
Lars Jensen, a founder of Vespucci Maritime, a container shipping business, said that, unless there was a major shift in the Russia-Ukraine war, “it seems clear that all shippers, carriers, and forwarders should at least have a contingency plan in place for a complete shutdown of services to Russia, possibly within the next few days.”
Pressure piled up on the shipping service line
It is known that in the past two years, the volume of goods has increased by 29% to 1.46 million TEU thanks to the increasing popularity of China-Europe railway freight. The reason for this is attributed to the Covid crisis and its negative impacts on sea and air transport.
Currently, the flow on the rail link is about 500,000 TEU. If this stops, demand on Asia-Uranian service routes may increase to 10,000 TEU/week, putting further pressure on already overcrowded trains.
“The cargo on the rail line is typically where the shipper has a high focus on speed and a willingness to pay higher freight rates, and hence, if this cargo was redirected onto ocean services, it might price out some of the lower-value cargo on those vessels.”