BUSINESS

Ukraine War Sends Chinese Goods on Circuitous Route to Europe

Published: Nov. 7, 2024 8:06 p.m. GMT+8

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Chinese goods are taking more roundabout ways to Europe as complications from the Russia-Ukraine war have forced traders to try alternatives to the more conventional rail routes across Asia.

On one route, cargo is taken by train out of China, through Kazakhstan, and on to a ship to cross the Caspian Sea. It is then hauled overland to the Georgian port of Poti on the Black Sea, where it is loaded on a freighter to Greece. It can then be transported farther into Europe.

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Due to the Russia-Ukraine conflict, traders are avoiding traditional rail routes through Russia, opting for a "southern corridor" instead.
The southern corridor involves complex routes through Kazakhstan, the Caspian Sea, and the Black Sea, with significant increases in transport time and costs.
Logistics companies are expanding southern corridor routes to meet demand, despite challenges such as increased costs and potential congestion.

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Who’s Who

Eurasia Logistics: Eurasia Logistics, a Shanghai-based freight forwarder, reports a significant decrease in the use of traditional China-Europe freight routes through Russia, now down to about 15% from 45% pre-conflict. This decline is attributed to European businesses boycotting Russia in support of Ukraine, leading traders to opt for alternative routes like the southern corridor for improved security and punctuality.

China United International Rail Containers Co. Ltd.: China United International Rail Containers Co. Ltd. is the container shipping arm of China's national railway operator. The company significantly increased its activity along the southern corridor, operating 111 China-Europe trains in the first half of the year, marking a 15-fold increase compared to the same period in 2023. As of July 1, they operate one train per day on this route.

DHL Express USA Inc.: DHL Express USA Inc. has completed initial trials of two new multimodal routes that circumvent Russia for shipping goods from China to Europe. However, these routes result in longer delivery times, with shipments taking up to 47 days to reach buyers.

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What Happened When

First half of 2024：: China United International Rail Containers Co. Ltd. operated 111 China-Europe trains along the southern corridor, a 15-fold increase from the same period in 2023.