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Faster speed and lower costs – why has the China-Europe rail line been such a success?

Increased speeds and falling costs could see the China-EU land bridge handle more freight, some 2m teu a year, while IMO 2020 has the opposite effect on sea freight.

Head of Russian Railways Oleg Belozyorov told delegates at the International Railway Congress in Vienna that new projects would boost transit times and create a better service for shippers.

“A few years ago, we could only speculate that around 600,000 containers would travel through Russia. Now, this has been achieved. We have seen an increase of an additional 30% on the previous year. We could reach 2m teu a year or more,” he said.

With trade between China and the EU worth some $5trn, Mr Belozyorov pointed out that the two economies were now connected via the land bridge – but the service could be improved, he believed.

Russian Railways plans to reduce transit time from China to the western border of Russia to seven days, while increasing the speed of the trains so they can cover 1,500km a day, up from 1,150, following the completion of infrastructure projects.

He added that construction of the 1,520mm gauge Košice-Bratislava-Vienna railway line would also add efficiencies.

“This project will bring the work of the railways to a new level,” said Mr Belozyorov. “We will try new technologies to speed up border crossings and unify legal issues. We need to focus our attention to ensure that it takes place as soon as possible.”

But he also called for “a unified regulatory framework”.

“Much has been done as part of the International Union of Railways, but more work is necessary. We need to quickly cross borders. We can cover long distances quickly, but the cargo sits at the border under customs clearance two whole days,” he said.

One way would be to increase training and add new technologies, he argued.

“We are accustomed to traditional railway professions, and we need to create new professions based on the use of new digital technologies. These will be the real railway workers of the future,” he said.

Another key aspect would be digital technologies,

“Tools such as blockchain and smart contracts can allow us to make decisions in a matter of seconds and save billions of dollars.”

Rail is gaining more traction in the market, with its combination of speed and price attracting some shippers. Last year, costs fell, while speed increased, according to a Drewry report.

2018 saw 370,000 teu transported by rail between China and the EU, up 35% on a year earlier. Some 75% of that was routed via Kazakhstan, with gross transit volumes up 59% as the number of trains grew as well as the number of containers per train. The imbalance also improved – there was a 90% increase in eastbound trains compared with a 37% increase in westbound trains.

Drewry also noted that the rates were less volatile than in ocean freight, and that costs had fallen.

Sea freight, meanwhile, is expected to see a significant rise in costs following the implementation of IMO 2020 fuel regulations, while ships are also expected to opt for more slow-steaming. Rail costs, however, will fall while speed increases.

gridlock customs

Gridlock for British ports if additional customs checks approved

As government negotiations to facilitate Britain’s exit from the European Union gather pace, the UK Chamber of Shipping says the EU is ignoring the risk Brexit could bring to European ports. According to one group of MPs the increase would be five fold and confidence in border arrangements post Brexit is alarmingly low. Her Majesty’s Revenue and Customs have told the Treasury select committee that it estimates a customs declaration rise from 60million a year to over 300million a year after the UK leaves the EU.

Chief executive of the chamber, Guy Platten, said: “The EU sells £240bn of goods to the UK each year, most of which travels through ports. So the negative impact of a so-called hard Brexit on ports such as Dover will be felt just as severely if not more so by European ports. I don’t think the EU has fully grasped this yet.”

The chamber said the proposed return of border controls would lead to increased bureaucracy, “guaranteed” lorry gridlock and threats to the prosperity of both EU member states and the UK. Platten continued: “Much of the attention on the impact of leaving the customs union has been on UK ports, but major EU ports such as Calais, Zeebrugge and Dublin would find themselves equally as vulnerable. The UK government understands the importance of sorting this out around the negotiating table, but we are yet to see evidence that the EU negotiators fully understand their own vulnerability.”

Dover has no room to expand from its 2.6 million lorries a year, and Eurotunnel, which caters for 1.6 million lorries a year faces the same issue. John Keefe, its spokesman, said: “On one side of Eurotunnel we have an area of outstanding beauty, so you can’t build to the left, and on the right we have the motorway; then you have to look at moving up, down, or back along the motorway.” Earlier this year, senior freight industry leaders including Eurotunnel said the introduction of customs checks at Dover after Brexit could cause gridlock in south-east England, with lorries queueing in Kent for up to 30 miles (48km) to get across the Channel.

In the summer of 2015, a French ferry workers strike led to more than 7,000 trucks backed up the motorway almost as far as Maidstone. With as many as 16,000 trucks a day using Dover, the potential for a repeat of that episode alarms business. An emergency traffic management strategy at the time, called Operation Stack, is estimated to have cost the Kent economy £1.5m a day, with parts of the M2 turned into a vast lorry park.

Concerns that this could be the case again seem to be well founded, and there doesn’t seem to be any evidence of a hard and fast plan for the UKs customs situation. With under two years to go until this would have to come into force, decisions need to made fast.

pot-hole

Lorry pothole claims rejected by road transport group

The poor state of Britian’s roads does not lie with the logistics industry say the Freight Transport Association (FTA)

According to the Local Government Association (LGA) there are more potholes and wear of the roads because of the 5% rise in lorries on British roads since last year, an increase of 1.7bnt.

LGA transport spokesman Martin Tett said…

“Our local roads network faces an unprecedented funding crisis and the latest spike in lorries could push our local roads network over the edge. Lorries exert massively more weight on road surfaces than cars, causing them to crumble far quicker.”

According to the Department of Transport’s road freight statistics the food and drink industry accounted for nearly a quarter of the road traffic in the UK in 2015. However, the FTA refute this, instead calling the lack of government spending on repairs the real issue. The FTA insist that the cuts to local insfrastructure have caused a repair backlog on a national level.

The FTA’s head of policy Christopher Snelling said the LGA’s report was an attempt to escape responsibility for the problem…

“The real issue is the need for increased funding from central government to address the potholes problem nationwide, local authorities are facing large bills – one-off costs of approximately £69M per council – to bring their roads up to a reasonable condition.”

Snelling continued…

“The transportation of essential goods on our roads is crucial to the continued health of the economy. To claim that lorries are the cause of the potholes across the country is simply not true. Larger lorries do not cause increased damage to the road surface – in fact, they have more axles which spread payloads more evenly. When combined with road-friendly twin tyres and road-friendly suspension, this reduces the impact of road usage by lorries.”

When responding to a recent RAC survey on potholes, Martin Tett had this as his response…

‘’Councils are fixing more potholes than ever – one every 15 seconds – and keeping roads safe is one of the most important jobs we do. However, councils face a £12 billion backlog of road repairs, which would already take councils more than 10 years to clear. Over the remaining years of this decade the Government will invest over £1.1 million per mile in maintaining main roads and motorways, which make up just three per cent of all total roads. However, it invests £27,000 per mile in council-controlled local roads, which make up 97 per cent of England’s road network. This difference in funding puts the country’s businesses at a competitive disadvantage and provides poor value for money’’

The state of Britain’s roads has long been a source of contention, but with increased usage and little money to make improvements, unfortunately our industry will always be under scrutiny.