China’s land link with Europe no match for ocean
The fastest growing container port in China last year was Lianyungang, a small mainland city in Jiangsu Province with a population of just 4.8 million.
The throughput of the port of Lianyungang in 2010 reached 3.8 million TEUs, up 27.7 percent on the previous year. In February alone, its cargo throughput reached 12.11 million tonnes, and container throughput hit 322,800 TEUs, according to China' Ministry of Transport.
It is not one of the high profile ports that usually feature in news reports, such as Shanghai with its impressive Yangshan Deepwater Port, and Shenzhen with its fast growing throughput about to overtake that of Hong Kong.
However, Lianyungang may have been under the media radar, but it is no slouch when it comes to handling bulk cargo. The 135 million tonnes of cargo that crossed its wharves last year comprised grain imports and exports, timber, containers and coke.
Like most ports in China, Lianyungang is expanding. In the "National Ocean Development Plan" part of the Ninth Five-Year Plan, the port is listed as one of three special development zones. The Chinese government has great plans for the port, designating it as the starting point for the grandly titled “New Eurasia Continental Landbridge”.
The city will connect by rail with Western Europe via South Asia and the Middle East.
The New Eurasia Continental Landbridge is not to be confused with the other rail link between China and Europe – the Trans-Siberian Railway. It will take a more southerly route across the continent, passing through Kazakhstan instead of Russia.
But when it comes to shipping cargo from China to Europe, rail does not beat ocean. The shortage of rail cars in China is always a problem, as passengers tend to take precedence over freight, not to mention changes in rail gauge between Russia and China, although it that is not an issue on the Eurasia route.
On such a long-haul route, rail will not be able to generate the volume required to lower the cost of shipping, either for bulk or containers. Throw in currently weak ship charter rates and the rail link is on a hiding to nothing.
For today, anyway. Situations can change pretty fast in China.