Land Transport Options Between Europe and Asia

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Land Transport Options Between Europe and Asia

• WORLDNET Beijing Workshop, 8 May 2008

Dr Arman Farahmand-Razavi, Associate Director,
Ramboll Whitbybird, London
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Acknowledgements

• Study of Land Transport Options Between Europe
  and Asia
• Commissioned by US Chamber of Commerce
• Carried out by Søren Jakobsen, Ramboll Denmark in
  2006

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Study outline

• Feasibility of land transport, and particularly
  trucking, between Asia and Europe
• Comparison of cost of transport and door to door
  transit time for 20 and 40 containers
• Based on freight rate quotations from transport
  operators and freight forwarders

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World Container Flow 2005 (million full load
containers)
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Modal Split Transport of Full Load Containers
between China and Europe (million full load TEUs)
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Growing imbalances- in millions of TEUs and as
- share of total full load containers
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A Route from China to Western Europe
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Study methods and assumptions

• Method
• Quotes obtained from transport operators and
  freight forwarders
• Full door to door transportation cost of 20 and
  40 containers
• Expected transit times
• Included 100km of trucking at both origin and
  destination

• Assumptions
• Freight rates for single container large
  customers command reduced rate
• Insurance and other liability costs not included
• Surveillance and guarding costs included
• Transit times are indicated by operators and
  forwarders
• Snapshot subject to seasonality and capacity
• Small sample size

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Typical transport costs and transit times for
transport between China and Western Europe
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Maritime transport
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Road transport - Trucking
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From China (Shanghai) to Western Europe (Hamburg)
a distance of 11,000 km for a 40 container
(FEU)
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Rail
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Rail
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Air
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Transit-times and cost of transporting a 40
container between China (Shanghai) and Western
Europe
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Shanghai to Berlin 2006
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Conclusions

• Sea transport is characterised by economies of
  scale and mature market
• most inexpensive if measured by cost alone
• Eurasian trucking is not yet mass marketed to
  shippers and there is a need to develop capacity
• cost 3-4 times higher than sea transport
• Land transport quotes have a higher uncertainty
  and deviation between lowest and highest rates.
  Transit times also varies
• It is not clear if existing trucking
  infrastructure can provide required framework for
  a build up of volumes
• Regulatory perspective for long term include
• Wage and labour conditions
• Truck standards
• State subsidies for fuel
• Shippers increasingly using co-modality?

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Land Transport Options Between Europe and Asia

• WORLDNET Beijing Workshop, 8 May 2008

Dr Arman Farahmand-Razavi, Associate Director,
Ramboll Whitbybird, London
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Transport Costs and Transit Times Road
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Transport Costs and Transit Times Sea
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Transport Costs and Transit Times Rail