A sharp decline in volume and sea freight rates as a result of rampant inflation in Europe and reduced consumption. Improvement of capacity on sea routes from China. Reduction of delivery time on the rail route from China. China now overtakes Germany as the world's second largest car exporter. The northern rail route bypassing Russia continues to be the best transport route from China. The relaxation of the covid policy in China is a great facilitation for road transport.


  1. Sea freight

According to Bloomberg Economics, the world economy is facing its worst year in 30 years, with Europe entering recession early next year and the US six months later.

Consumer spending in Europe is very low due to high inflation and rising costs of living, resulting in less demand for containerized goods.

Container freight rates continue to fall, with Asia-Europe rates dropping a further 15% over the week to $1.700/FEU. Carriers quote values ​​as high as $1550-$1600/ FEU. The industry expects spot rates to drop below $1500/FEU after Christmas. There is a sharp drop in volume.

On the Asia-Europe route, shipping companies are not making a profit and are under pressure from operating costs. The cancellation of sailings remains the most important measure to prevent a sharp drop in freight rates.

If demand drops significantly, the shipping industry may enter a price war. Some started it already 2 months ago. The shipping companies have made big profits over the last 2 years and are now able to fight for market share at significantly reduced spot rates.

In the meantime, traffic flow has improved again as bottlenecks and congestion related to the pandemic have eased. According to the analytical company Sea Intelligence, punctuality and on-time deliveries increased by 6,6% in October and now stands at 52%. The average delay time, which remains consistently below the 6-day limit, also decreased from 0,31 days to 5,56 days.

Currently, 8% of global maritime traffic is congested, compared to a peak of 14% in 2021. Congestion in container shipping decreased sharply in the two consecutive months of this year.

China's covid policy was recently eased after the largest-ever anti-covid protests. China is now entering the post-covid era. Due to declining trade, the Chinese authorities are sending representatives to Europe to fight for new customers. However, this is unlikely to affect shipping demand as inventories in Europe are high and it takes time to increase cargo volumes.


  1. Rail freight

With the economic slowdown in Europe, the number of trains from China to Europe has also decreased. Duisburg station received an average of 60 trains a week from China at the beginning of the pandemic, now this number has fallen by almost half. A major Polish logistics company said its rail freight volume fell in November. by 75% y/y.

The decrease in the amount of freight and the easing of traffic congestion resulted in shorter delivery times. From the main Chinese railway stations (Chongqing, Chengdu, Xi'an, etc.) to Małaszewicze in Poland, the journey takes about 12 days.

Faced with declining demand for traditional container loads to Europe, China-Europe trains are shifting their focus to transporting new energy cars (also known as alternative fuel cars).

China Railway announced in September this year that new energy cars can be transported by rail using JSQ (Railroad Car Carrier) or containers.

China has now overtaken Germany as the world's second largest car exporter. In the first 10 months of this year, In 2,6, almost 2021 million cars were exported, which is more than in the whole of 0,3. In October this year total exports fell by 60%, while car exports increased by 352% to 000 units. In addition, Europe is the largest market for Chinese cars. Many railway stations (such as Zhengzhou, Chengdu, Chongqing, Xi'an, Wuwei, Shanghai, Wuhan) have launched special trains to export cars with new energy. The transit time by rail is around 18 days and can serve the rapidly changing European market. Recall that the train to Europe was established in 2013 to facilitate the rapid delivery of smartphones manufactured in Chongqing.

Cargo volumes from China to Russia and Central Asia remain high, which will greatly help many Chinese rail companies weather the global shipping crisis. Bilateral trade between Russia and China increased by 30% (y/y) in the first 10 months of this year. reaching USD 129 billion. Russia expects this volume to exceed $2023 billion in 200. The intensification of trade leads to high demand for shipping from China to Russia. However, in the medium term, it is impossible to expand shipping opportunities on the Far East coast. For this reason, Russia sees the need for large investments in railway infrastructure and its renovation. Currently, Russian Railways has announced plans to build 4 new railway crossings on the border with China and to modernize the existing ones.

The middle corridor (China-Kazakhstan/Uzbekistan-Azerbaijan-Turkey/Black Sea-Europe) will not be a good alternative in the short term (several years). Loads must be reloaded many times, and the infrastructure on this route is outdated and shippers complain about the insufficient number of parking spaces and the too slow work of customs services.

An alternate route via Pakistan and Iran will not become a viable option before 2030.

At the moment, the traditional northern route bypassing Russia remains the best route. Poland is the most important transit country for China-Europe trains.


  1. Road transport

Currently, the door-to-door delivery time in road transport from China to Europe is 21-30 days. Due to bottlenecks on the border between Russia and China, most of the cargo to Europe leaves China via the China-Kazakh border. The control of e-commerce loads in Poland is still very rigorous and lengthy. Entry from Belarus to Poland is free and takes up to 1,5 months, and crossing the border between Poland and Belarus takes 2-4 days.

Freight rates from Kazakhstan to Europe surged last week due to limited EU entry permits and bad weather. In addition, the demand for road loads to Russia is high, so drivers prefer to go to Russia rather than to Europe.

With the relaxation of China's covid policy, crossing the Chinese border will be faster due to less need for testing and disinfection. There is also consent to more driving trailers. This can lead to shorter transit times and lower freight rates. The industry believes that trucking has a bright future as it can achieve door-to-door transportation and is well suited for dangerous goods, batteries, magnetic objects, high-value goods, etc.