In Europe's east, a border town strains under China's Silk Road train boom

aerial view of train cars in busy rail yard

June 26, 2018 - When cargo trains from China began arriving at the Polish border town of Malaszewicze almost a decade ago, they were considered a novelty - able to ship laptops and cars to Europe in as little as two weeks, but extremely infrequent, with one service a month.

However, a surge in the number of trains over the past year, fueled by Beijing’s plans to grow trade along ancient Silk Road routes to Europe, has left authorities scrambling to meet the demand that has ballooned to as many as 200 locomotives a month.

Rail shipments have experienced delays of over ten days at land ports in both Europe and China, bogged down by insufficient infrastructure and paperwork pileups, shippers say. That congestion is anticipated to worsen as Chinese authorities encourage a further ramp up in volumes.

The situation illustrates how China’s Belt and Road initiative is delivering some successes but also how its partners are struggling to keep up.

The rail network, used by companies like Hewlett Packard, the sports gear company Decathlon and the carmaker Volvo, handled 3,673 train trips between China and Europe in 2017, up from 1,702 in 2016 and just 17 in 2011, according to China Railway, the national operator.

The network remains unprofitable and heavily supported by subsidies, but Chinese city authorities have launched new services with fervor after it was subsumed under the four-year-old Belt and Road initiative.

In 2016, China’s top state planner named the network “China Railway Express” and said it wants train trips to hit an annual number of 5,000 by 2020.

By April, the number of regular rail services linking China and Europe jumped from just one in 2011, between Chongqing and Duisburg in Germany, to 65, connecting 43 Chinese cities and 42 destinations in 14 countries including Spain and Britain, China Railway said on its website.

Carsten Pottharst, managing director of InterRail Europe, is among a number of freight forwarders who expressed frustration to Reuters about congestion on the network, citing insufficient government investment in European railway infrastructure.

“They believed that they would come, but they didn’t believe that it would become that big,” he said.

Congestion 

While congestion occurs across the network, much of the shippers’ frustrations are being directed at Malaszewicze, which handles roughly 90 percent of the cargo.

There, containers which travel from China through Kazakhstan, Russia and Belarus on Russian gauge tracks are transferred to other trains running on European standard ones.

The land port processed nearly 74,000 containers in 2017, four times the volume it handled in 2015, earning Poland nearly 400 million zlotys ($109.02 million) in tax and customs revenues last year, Polish tax and customs authorities said.

But PKP Cargo, the Polish state-controlled rail operator that runs the main terminal, said in March that the current infrastructure was unable to handle the anticipated growth. Europort, which runs a private rail terminal, said that in late 2017 there were queues as long as 100 trains awaiting entry to Poland from Belarus.

“This is a huge challenge and a huge chance,” said PKP Cargo’s chief executive, Czeslaw Warsewicz in March.

PKP Cargo said in an e-mail that there were currently no queues at its terminal and that it was looking to expand capacity and cooperate with private terminal operators to shorten loading times. Poland’s infrastructure ministry, meanwhile, said the government was considering opening a second border crossing with Belarus.

However, shippers say they are concerned that the improvements will not happen fast enough.

This is worrying locals such as Krzysztof Iwaniuk, mayor of Terespol Municipality, which includes Malaszewicze, who has seen the town and surrounding areas benefit from the rail trade.

Source: Reuters