ERAI rail transit index included in Drewry international shipping report
The “Eurasian Rail Alliance Index” (ERAI) which reflects the indicative cost of rail transit services on the 1,520 mm railway gauge used in the former USSR, has been included in the February issue of the «Sea and Air Shipper Insight» report prepared by Drewry, the leading independent provider of research and consulting services to the maritime and shipping industry. This marks the first time that the role of Eurasian rail transit has been recognized and highlighted on an international level.
According to the Drewry report, the competitiveness of rail services has increased due to the reduction in the cost of transportation and an increase in the speed of delivery throughout the year 2018. In all, 370 thousand TEU were transported by rail between China and Europe in 2018, an increase of 35% compared to 2017. About 75% of the total traffic volume was routed via Kazakhstan, with the gross transit volume soaring by 59% compared to 2017. This was due to the increase in the number of trains from 2167 in 2017 to 3384 in 2018, as well as the average number of carriages per train. The current imbalance of East-West freight traffic has decreased during 2018: the number of westbound trains grew by 37% compared to a 90% increase in eastbound trains.
As noted in the report, a comparison of the ERAI index with the Drewry World Container Index, representing the cost of shipping, shows that the cost of rail transportation is less volatile than the price of sea delivery. In addition, rail transport has achieved significant success in terms of cost reduction compared with maritime transport. Although sea routes still account for about 98% of the trade volumes between Europe and China, Drewry expects that rail transport to further improve its competitiveness. It is expected that cargo ships on the Asia — Europe trade will continue slow steaming, and freight charges will increase during 2019 and 2020, while the speed of rail traffic will increase. To summarize, Drewry experts forecast that in the coming years high rates of growth in rail traffic are expected, in part due to the low initial base.
Drewry is known for its World Container Index which constitutes a set of freight rates on 8 major two-way routes between to the United States, Europe, and Asia.
The ERAI Index (http://index1520.com) was developed in October 2018 by the JSC “United Transport and Logistics Company – Eurasian Railway Alliance” (UTLC ERA) in order to help shippers in choosing the optimal way of cargo delivery. Now, with the help of a new tool, each client can get up-to-date and transparent information on the cost of shipping container cargo on Asia-Europe-Asia routes direction and calculate and compare delivery times.
Source: UTLC ERA