Rail Transport Demand Soars in Wake of Red Sea Disturbances

In the aftermath of recent Houthi attacks in the Red Sea, a significant rise in demand for rail transport through Russia from Asia to Europe has been witnessed, reshaping global trade dynamics.

With major container shipping lines altering their routes away from the Suez Canal due to ongoing attacks, the rerouting of ships around Africa’s Cape of Good Hope has led to extended journey times and increased costs, prompting logistics companies to explore alternatives.

Logistics companies are reevaluating routes through Russia as a response to the volatile situation in the Red Sea. Germany’s DHL reported a 40% surge in demand for the Russian rail route since container ships began opting for the longer journey in December.

RailGate Europe noted a 25 to 35% increase in requests, while Rail Bridge Cargo observed a 31% rise in cargo rail traffic through Russia compared to the same period last year.

DHL emphasized that the majority of goods traveling from Asia to Europe via rail use the “west corridor” through Kazakhstan into Russia and Belarus, with some traffic following the “north corridor” directly from China into Russia east of Mongolia. Despite western export restrictions related to Russia’s conflict in Ukraine, DHL stated that it is not handling any traffic to or from Russia.

Rail transport is gaining traction among shippers due to its cost-effectiveness compared to air freight and faster delivery times than ocean transportation.

RailGate Europe’s chief business development officer highlighted the route’s appeal, citing a transit time between 14 and 25 days, significantly better than ocean times.

Despite initial concerns during the Russia-Ukraine conflict, the route has seen a recovery in the past year, with demand for rail transport skyrocketing since the attacks on vessels in the Red Sea at the end of 2023.

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