Train Cargo Growth to Chug Higher for Fourth Straight Year

What’s new: China’s cargo volume by rail is expected to grow for the fourth consecutive year in 2020, with a 4% year-on-year increase, according to Zhuang He, a department director at China State Railway Group Co. Ltd., who made the statement at an industrial conference on Tuesday.

Coal freight volume by rail is likely to be on pair with last year’s 1.8 billion tons, said Zhuang, in part due to sluggish downstream demand earlier this year. Cargo volume on the country’s busiest coal railway, the Daqin Line, could drop by 7.2% to 400 million tons this year from 2019, Zhuang added.

Another coal line, the Haoji Railway, which started running last September, is due to significantly fall short of a 2019 target to transport 60 million tons. Zhuang estimated its transport volume through 2020 will be around 25 million tons.

What’s the background: Beijing has been boosting cargo volumes by rail in a bid to curb pollution caused by road transport since 2017. Driven by government support, railway freight volume in China has maintained steady growth, with an average 9% year-on-year increase over the past three years.

The high transportation fee for Haoji Railway, the 1,813-kilometer (1,127-mile) freight line running from Inner Mongolia autonomous region to East China’s Jiangxi province, has depressed freight volume, said a person close to the operator.

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Contact reporter Lu Yutong (yutonglu@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

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