Expanded Russian Customs Checks Disrupt China-Europe Rail Logistics

[para. 1][para. 2] Russian authorities have been intercepting containers bound for Europe via the China-Europe Railway Express, primarily due to the Russian Directive No. 1374 issued on October 15, 2024. This directive expands the list of banned transit goods, focusing on items like machinery, electronics, and camouflage clothing, which have potential civilian and military applications.

[para. 3] The directive grants Russian customs significant authority to detain goods suspected of having military or dual-use applications, leading to potential delays and examinations at any station on the route. This means even containers that clear the border may still face delays or detention deeper into Russian territory.

[para. 4] According to industry insiders, many goods remain stuck in Russia. For instance, Liu Zan, general manager of Bangdatong Logistics (Hunan) Co. Ltd., mentioned that a client's shipment of Christmas clothing is still held, with about 70 containers affected so far.

[para. 5][para. 6] Detentions began in late October and early November 2024. Containers carrying goods under specific codes, notably starting with 84, were most frequently stopped. Even containers sharing a railcar with restricted items were affected because if one container is flagged for inspection, the entire railcar is detained.

[para. 7][para. 8] China-Europe Railway Express switches from China's standard gauge of 1.435 meters to Russia's broader gauge of 1.52 meters at the Chinese-Russian border, requiring containers to be transferred to different railcars. In Russia, two 40-foot containers are often loaded onto a single railcar, resulting in both containers being detained if one needs inspection.

[para. 9][para. 10] The current scale of detention is unprecedented. Approximately 100 containers from one company have been detained, impacting over 1,000 containers in total. Once a container is stopped, Chinese freight forwarders must provide technical documentation to Russian customs, after which shipments may be returned, confiscated, or allowed to continue.

[para. 11][para. 12] Communication delays, numerous parties in the supply chain, and logistical congestion—especially at the Smolensk hub, a key transit point near the Belarusian border—compound the problem. This backlog of containers has significantly slowed traffic, with the China-Europe Railway Express experiencing a notable decline in operations.

[para. 13] Official data showed a 2% decrease in trains run by the China-Europe Railway Express in November 2024 compared to the previous year. Container shipments also fell to 165,400 20-foot containers, witnessing a year-on-year decline of 3.2% and a month-on-month decrease of 4.1%, despite a prior upward trend in October.

[para. 14] To mitigate delays, some logistics companies, including Liu's, have rerouted containers via alternative routes bypassing Russia, such as through Kazakhstan and Turkey, or switched to sea routes.

[para. 15] However, these alternatives have increased costs for freight forward companies, with fees for detained containers ranging from $5,000 to more than $10,000 per container due to overstay charges, railcar detention fees, inspection costs, and storage fees.

[para. 16] Consequently, the disruptions have made some shippers hesitant to use the China-Europe Railway Express, contributing to a slowdown in train operations. The seasonal lull before the Lunar New Year exacerbates this trend, leaving border ports like Alashankou less active.