In the first quarter of 2023, the China-Laos Railway’s import and export freight volumes increased by 274,4 per cent year-on-year. According to customs data from the Chinese city of Kunming, goods transported along the route in the first four months of 2023 amount to 1,033 million tons.
Increased volumes also correspond to more trains. Data from Laotian authorities show that 954 freight trains transited on the Laos section of the China-Laos Railway, a year-on-year increase of 112,47 per cent. According to CCTV News, there are more than 2,000 different types of goods transiting along the corridor.
From China to Laos, it’s primarily mechanical equipment, household appliances, vegetables, flowers, and machinery parts, while the goods transported from Laos to China are mainly metal ore, cassava, and barley. It has only been 16 months since the opening of the China-Laos Railway in December 2021, and the corridor is constantly growing.
Laos connects to Vietnam
On 1 March, Vietnamese infrastructure investor DEOCA Group signed a joint venture agreement with Laos oil trading company PTL to research the construction of the Vietnam-Laos railway. According to the agreement, the railway will link the Laotian capital Vientiane with the Vietnamese port of Vinh An. The total length of the railway will be 554,7 kilometres, with a standard gauge and an operational speed of up to 150 km/h. The total investment will reach 4,38 billion Chinese Yuan (roughly 582 million euros).
Most importantly, the planned new railway line will connect to the China-Laos Railway and reap the maritime advantages of Vinh An, where goods will arrive by rail and then be shipped directly to markets such as Thailand, China, South Korea and Japan through a changeover. Although the agreement is still at the feasibility stage, it gives a new blueprint for the future of rail-sea transport between China and Laos.
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Too early for the sunrise?
There is a lingering hope for improvement in the spot rates dynamic as Drewry's Composite World Container Index was doing better in the past month in comparison with March 2018 and March 2019. Although it showed 9.6% deep, the overall rate remained strong which contradicts the scenario that everyone expected (the continuous downfall of rates in the first quarter of 2023). Following this improvement, the containership charter market is experiencing a surge. Many professionals expect an improved peak season compared to last year.
However, there are still risks of disruption and it is too early to ride a wave of this trend. Therefore, when such companies as CMA CGM aggressively keep splurging on secondhand vessels to capitalize on high demand and increasing rates, it becomes concerning whether such moves would lead to overcapacity in the future.
Routes & services
- Ruscon, a Russian intermodal transport company, has partnered with Mountain Air Shipping, a Dubai-based container shipping company, to start a weekly container service between Saint Petersburg and Ambarli.
- Container carriers are expressing frustration and disappointment over the recent decision of terminal operators at India's Jawaharlal Nehru Port Trust to increase tariffs. The move is expected to result in higher costs for carriers, which could ultimately be passed on to shippers. Carrier groups have called for greater transparency in the tariff-setting process and are urging the Indian government to intervene in order to prevent further cost increases.
- Uzbekistan and Georgia are increasing their trade cooperation, focusing on the Baku-Tbilisi-Kars (BTK) railway line as a gateway to the Georgian Black Sea ports.
- PSA Italy is set to launch a new rail service between the Italian port of Genoa and Kornwestheim hub in Stuttgart in May 2023.
- Vietnam is investing in a new railway line that will connect with the China-Laos railway running from Lao Cai in northern Vietnam to Hanoi, with plans to eventually extend it to Haiphong Port.
- A new neutral shunting service has been launched in the Antwerp North rail terminal, aimed at creating a level playing field for all rail freight operators by reducing congestion and wait times.
- The Alataw Pass, a key rail border crossing between China and Kazakhstan, has seen a 10.35% increase in the number of China-Europe freight trains passing through it in the first quarter of 2023. The pass has undergone significant upgrades and improvements in recent years to increase its capacity and efficiency.
Other
- The migration of cargo from West Coast ports to East Coast ports in the United States is set to become a logical trend that will continue in the coming years. The shift is being driven by a number of factors, including growing demand for e-commerce and the expansion of the Panama Canal, which has made it easier for larger ships to transit. While the West Coast ports will remain important, the East Coast ports are expected to see continued growth as shippers seek more direct and efficient routes to major population centers in the eastern US.
- Cosco has reported a 35% drop in sales and leasing revenue for 2022 due to fluctuating market conditions in the container industry. Yet, the company remains optimistic and explores opportunities in other areas of the logistics sector, including port development and supply chain management.
- Several terminals at the Ports of Los Angeles and Long Beach were forced to shut down due to a lack of available dockworkers due to the labor dispute between the International Longshore and Warehouse Union and the Pacific Maritime Association. The shutdowns caused significant disruptions to cargo operations at the ports.
- Maersk has achieved the highest schedule reliability among the major carriers in February 2023.
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China dispatched the first train carrying humanitarian aid products for Turkey on 29 March. This train carried fifty 40-foot containers; however, according to KTZ Express, 150 more containers remain to be dispatched to Turkey from China. For this purpose, the Kazakh company prioritises the relief trains operating them as shuttle trains.
The shuttle train operation results in less time spent crossing the territory of Kazakhstan. KTZ Express underlined that crossing the country takes only 90 hours currently, with an optimised departure schedule from the Altynkol station. Specifically, trains depart three times a week, while the service tariffs are also fixed.
Three times faster
The humanitarian cargo consists mainly of tents that will temporarily accommodate people affected by the devastating and deadly earthquake that hit Turkey and Syria in February. The route relief trains follow starts from China, crossing through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia and from there to Mersin in Turkey.
KTZ Express claims that the special shuttle train conditions in Kazakhstan, combined with measures taken from the Chinese side, transit times will reduce by three times. Chinese sources have commented that the best possible transit time for these services is 30 days, in contrast to the average of 40-50 days spent to complete services via the same route.
American trucking company Borigi LLC has posted freight rates on MaxMmodal multimodal network. Shippers and forwarders are welcome to have a look, negotiate, and book their rates
