Getting railroaded
Although these new Silk Road systems may be greener and popular with shippers and forwarders, there still remain many airfreight skeptics as to the long-term viability of railfreight, especially in the Asia-Pacific region. For Tom Crabtree, regional director for airline market analysis, marketing and business development, at Boeing, his doubts can be summed up in one word: Russia.
Crabtree, who has done extensive research on doing business in the region since the late-Soviet era of the 1980s, said the state-owned Russian Railroad Corp., known as RZD, is still a hopelessly outdated system that is plagued by delays and is slow to upgrade its decades-old infrastructure.
While China is pouring funds into rail modernization, “there has been no new rail investment in Russia for many years,” Crabtree said. Part of the Northern Route of the Silk Road service uses the Baikal-Amur Mainline (BAM), which was built as an alternative to the century-old Trans-Siberia Railway, linking Moscow and Vladivostok. Long stretches of the BAM date back to the 1930s, and the project wasn’t fully complete until the 1980s, he said.
“The rail option is limited because you can’t use double-stack freight containers on it,” he continued. “The tunnel infrastructure along the line was never built to accommodate the height of two stacked 40-foot intermodal containers, so you can’t get the same efficiencies as you can get in other regions of the world.”
Crabtree said he also expects problems with security and reliability. “In Russia, the domestic vitriol against the West today is even worse than in Soviet times,” he said. The remoteness of much of the route, he said, leaves the trains especially vulnerable to theft during the journey.
Even ESC’s van Doesburg, who has sung the praises of the Eurasian rail link at various cargo conferences, is the first to admit there are some serious limitations to this mode of cargo transport – including the price. “The cost is still not really attractive,” he said. “It’s cheaper than air, but it’s too much more than for ocean shipping.”
While today’s rail containers are well-equipped with sensors that let you know when a shipment is being tampered with, they aren’t much help in remote locations. “Say an alert goes off about a problem in Siberia. What can you do about it? Call the forwarder?”
These problems, he said, are not limited to Russia, either. “If you’re sending something by rail from, say, Rotterdam to Genoa, the average speed is just 35 kilometers per hour,” he said. “Now just imagine how many other things can happen along the way to delay shipments from Europe to China.”