Assessing the market niche of Eurasian rail freight in the belt and road era

Abstract

PurposeThis paper presents an overview of the recent development of Eurasian rail freight in the Belt and Road era and further evaluates its service quality in terms of transit times and transport costs compared to other transport modes in containerised supply chains between Europe and China.Design/methodology/approachA trade-off model of transit time and transport costs based on quantitative data from primary and secondary sources is developed to demonstrate the market niche for Eurasian rail freight vis-a-vis the more established modes of transport of sea, air and sea/air. In a scenario analysis, further cargo attributes influencing modal choice are employed to show for which cargo type Eurasian rail freight service is favourable from a shipper's point of view.FindingsAt present, Eurasian rail freight is about 80% less expensive than air freight with only half of the transit time of conventional sea freight. Our scenario analysis further suggests that for shipping time-sensitive goods with lower cargo value ranging from $US1.23/kg to $US10.89/kg as well as goods with lower time sensitivity and higher value in a range of $US2.46/kg to $US21.78/kg, total logistics costs of Eurasian rail freight service rail is cheaper than all other modes of transport.Practical implicationsAs an emerging competitive solution, Eurasian rail freight demonstrates to be an option beneficial in terms of transport cost, transit time, reliability and service availability, which offers a cost-efficient option enabling shippers to build up agile and more sustainable supply chains between China and Europe.Originality/valueOur study firstly provides a comprehensive assessment of present Eurasian rail freight including a thorough comparison with alternative modes of transport from a shipper's point of view.