"The value of freight between Europe and Yiwu, a much-touted overland rail hub near Shanghai, came to 2.27 billion yuan ($330 million) in the first four months of this year [snip] China’s top four ports alone process about the same value of cargo every three hours."
Also see this graph from the article: https://www.bloomberg.com/toaster/v2/charts/e6c45ea06db24277...
In nominal terms the US is the world's largest economy. Let's put it at ~$20tn gdp nominal with moderate growth. EU is about ~$17tn with less than moderate growth say and China is about ~$13tn and growing fast. Problem is that EU and China are at opposite ends of the Eurasian landmass. Anything that reduces trade times and cost between the poles of this massive continent and interconnects a combined ~$30tn economy is going to have an enormous impact.
But even so the article contradicts itself.
“The overwhelming majority of China's trade with Europe is by sea and air. Overland routes don't cut it”
What the detailed stats show is that by value rail is 2% and road is 6% of total trade. (Air is 28%). Take into account that,
“Just 10 years ago, regular direct freight services from China to Europe did not exist. Today, they connect roughly 35 Chinese cities with 34 European cities.”[1]
And that,
“Rail services are considerably cheaper than air and faster than sea”[2]
So 2% of trade captured in 10 years. So if people stop thinking in terms of years and start thinking in terms of decades it is obvious that improvements in land logistics will far surpass those of sea and air. By the middle of the century it is anybody's guess what fraction of total trade will be capture by road and rail but it could be very significant. From my reading most analyses put Khazakstan as one of the major bottlenecks, an upgrade there could have huge knock on effects. (And that's not even taking into consideration different sized rail gauges.)
[1] https://www.csis.org/analysis/rise-china-europe-railways
[2] https://csis-prod.s3.amazonaws.com/s3fs-public/180228_fig1.p...
This is about the fundamental capacity constraints and costs of rail versus maritime transport. The former will always be more expensive than the other, and always be further capacity constrained. The only thing that could change that is a quantum leap in several technologies, in which case the current investments become useless.
> “Rail services are considerably cheaper than air and faster than sea”
Where are you getting this quote?
This increases wear on the train and tracks. We might have materials breakthroughs that change the balance. But such materials would make (a) shipping more efficient and (b) large fractions of the existing Belt and Road obsolete.
> right now the China-Belgium trip can take 20 days by train (cf. https://www.train-chain.com/) and usually around 30 days by sea
Emphasis on can. In any case, there is a reason the world's commercial shippers are all focussing on Arctic maritime routes.
Rail is a neat way of controlling territory. It's better than trucking or flying, when it comes to cost. But water beats it at scale.
Yes. But it's also much faster. This creates new opportunities. Rail freight is not replacing sea or air freight, it's supplementing it.
Expensive but faster freight means that heavy but valuable items can be delivered faster. Heavy Air freight (>100 kg) typically costs 15-20 percent of the value of the goods. Rail wright can be expected to cost 5-10 percent easily, more for items weighing more than 1000 kg. That's value created by the rail.
When logistics starts to trust the route, the volumes and the cost or railway freight will increase. Railway freight is currently just 20-30% more expensive than ocean freight but takes only 10-15 days. Ocean freight takes two months.
Air freight for items above 500 kg is rarely cost effective. Rail freight opens up new possibilities for faster deliveries.