Abstract
The planned launch of Deutsche Bahn Schenker' s two-way weekly rail container
service between China
and Germany has been postponed on the back of
falling freight volumes between China and Europe. The
Germany rail cargo
operator' s container service had been due to begin operations in February
2009, but
the Journal of Commerce quotes a spokesperson from DB Schenker' s
logistical arm as saying, ' we are in
contact with our customers…
discussing the right time to start it… We will offer the service this
year…
we can' t be more specific because of the [economic]
situation.' BMI notes that it in the space of three
months DB Schenker has
had to revise its plans for what promised to be one of the biggest
developments
in the global rail freight sector for decades. The planned
container service was trialled in October 2008
and led many observers to
herald the arrival of a new era in the development of the ' iron silk road' .
On
October 6 2008 the first ever Fujitsu Siemens Computer (FSC) train
pulled in at Hamburg railway
station with a cargo of 50 containers of IT
products, including monitors and PC chassis made in China.
The train had
come from Beijing, a distance of 10,000km, in a total of 17 days. The project
was a
collaboration between DB Schenker, Russian Railways, and Chinese
Railways. It was hoped that the
planned service would provide some
much-needed revitalisation for the rail freight sector, and would
directly
compete with air and sea freight. Heribert Göggerle, an FSC executive,
stated that ' Shipping IT
products by rail is more flexible and around one
third faster than by ocean freight,' adding that ' compared
with air
freight, we save around one quarter of the costs.' Despite a successful trial
period, the project has
not been immune to the global economic downturn
and the fall in trade volumes. The International
Herald Tribune quotes
figures from China' s customs agency, which state that exports fell by 2.8%
yearon-
year (y-o-y) in December 2008. The decline in exports was the
steepest China has seen since April
1999. Imports were also down, falling
by 21.3% y-o-y. BMI believes that the fall in Chinese exports has
made the
launch of a rail service between China and Europe unviable on the short term.
The decline in
trade between China and Europe has also affected sea and
air freight companies. BMI has been following
the downturn in the shipping
industry, and notes that many major container shipping operators have been
revising their Asia-Middle East-Europe services, by scrapping ports of call
and laying up vessels.
Container fees on the route are reported to have
fallen to only US$200 per twenty-foot equivalent unit
(TEU), making it
less economically viable for liner companies to ship containers as this fee is
below
operating costs. Asia' s air freight sector has been badly hit by the
fall in trade volumes. The International
Air Transport Association (IATA),
which represents approximately 230 airlines, reported in December
2008 the
air freight industry' s growth figures for the year up to November. Freight
tonne kilometres
(FTK), which measure actual freight traffic, for Asia
were down by 4.7% y-o-y in January-November
2008. BMI believes that
freight carried growth across all modes, measured in million tonne-kms
(mntkm)
will slow down from an estimated 13.4% in 2008 to only 4.4% this
year. However, we are confident it
will recover quite strongly after that,
and that the annual average in the five years to 2013 will be 8.8%,
ahead
of average GDP growth of 7.1%.
China’s economy continues to grow,
albeit at a slower rate, driving trade and demand for freight
transport.
Our latest estimates put GDP growth at 9.0% in 2008, easing quite sharply to
5.6% in 2009.
China’s foreign trade will ease from 21.8% growth in
2008 to 13.4% in 2009 and 16.9% in 2010. This
double-digit trade growth
continues to create major demands on the country’s transport and
infrastructure
capacity. Underpinning the optimistic outlook is a
supportive operating environment. BMI has given
China’s freight
industry a rating of 63.7 (out of a theoretical maximum of 100), which places
it right up at
the top of the Asia Pacific region.
Based on available
data, we have recently trimmed down both rail freight and river and sea cargo
growth.
Our forecast for freight carried across all modes in 2009-2013 now
stands at 8.8% per annum (pa).
According to our latest estimates,
transport and communications GDP rose by 10.8% in 2008, 1.8
percentage
points (pps) faster than overall GDP, which we estimate will have expanded by
9.0%. For the
2009-2013 forecast period, we expect the transport and
communications sector to continue outpacing the
economy as a whole. It
will achieve average annual growth of 8.0%, versus 7.1% for overall GDP.
The
total value of transport and communications GDP will rise to US$397bn
in nominal terms by 2013,
representing 6.3% of China’s GDP. The
transport and communications sector employed 22.27mn people,
or 2.7% of
the labour force, in 2007. We see the figure rising to 23.37mn by 2013.
Despite current conditions, prospects for the freight transport industry
remain encouraging. As our figures
indicate, the freight sector will
continue to grow at a faster rate than the economy as a whole, in line
with
intensifying demand for transport at this stage in the Chinese
economy’s development. By transport
mode, growth will be led by oil
and gas pipelines (at an average rate of 22.3% a year), shipping and
inland waterways (9.0%), air freight (7.9%), road haulage (7.3%), and rail
freight (also 6.8%).
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