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Monday 25.09.2017 | Name days: Rauls, Rodrigo
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Researcher: 2,500 containers from China annually – the best Latvia can expect

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUMore than 99% of Chinese exports are transported to Europe by sea. More than ten million cargo containers worth more than EUR 350 billion were transported by sea last year.

Average transportation costs for a single container in the last seven years have been equal to approximately USD 1,185. Last year, costs declined to EUR 629 per container. The reason for that is the recent increase in the number of cargo shops – the order that was made before the crisis, CERTUS think tank’s researcher Sergejs Gubins told Delfi.

«As a comparison – 50,000 containers were moved from China to Europe by rail last year. It is a drop of water in the sea. It is a small amount even for Latvia’s transit industry – in 2015 alone Riga Freeport transshipped 335,000 containers. Considering the cost of transporting a single container from China to Germany’s Duisburg logistics center by rail is USD 2,400, the small volume is no surprise,» – said Gubins.

«In addition, half of containers that are transported from China to Europe by rail are sent back to China by sea. Latvia’s geographical location allows the country to attract cargoes to its ports to be sent further to Scandinavia. Exports to Sweden and Norway form 3% of China’s total export volume to Europe. Another 2% of exports are sent to Denmark. With that, we have to conclude that Latvia can expect 2,500 containers annually in the best case scenario. Not much. It should be clear that we may not see larger cargo increase at current prices,» – the researcher added.

According to him, China’s New Silk Road initiative is aimed at the development of railway transports from Asia to Europe; its goal is to reduce transport costs in order to increase cargo transport efficiency and volumes. China claims it is prepared to invest in transport infrastructure. Why is this necessary for China if it is cheaper to use ships? Because it is necessary to enhance economic development in western provinces, which do not have exit to the sea and whose investments in production are small.

[…] According to OECD studies, in 15-35 years cargo turnover by rail between China and Europe could reach one million containers annually. Latvia can expect 50,000 containers sent to Scandinavia. Fortunately, the possibility of Russia blocking Latvian ports is low, because railway transports compete with marine transports. This means if Russia decides to divert Chinese cargoes to its ports, it may end up without cargoes, which will likely be sent around Russia (through Caucasus or Turkey, using TRACECA transport corridor). This is where Latvia’s and Russia’s economic interests coincide, said the researcher, adding that it is unlikely that the volume of Chinese cargoes to Latvia is not likely to grow in the near future.

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