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

Xu Zhang (School of Transport Engineering, Environment and Planning, Technological University Dublin, Dublin, Ireland)
Hans-Joachim Schramm (Department of Global Business and Trade, Vienna University of Economics and Business, Vienna, Austria) (Department for Operations Management, Copenhagen Business School, Frederiksberg, Denmark)

The International Journal of Logistics Management

ISSN: 0957-4093

Article publication date: 16 June 2020

Issue publication date: 17 November 2020

882

Abstract

Purpose

This 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/approach

A 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.

Findings

At 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 implications

As 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/value

Our 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.

Keywords

Acknowledgements

This paper forms part of a special section “Impacts of the Belt and Road Initiative on Global Supply Chain and International Logistics”, guest edited by Paul Tae-Woo Lee, Kamonchanok Suthiwartnarueput, Kevin X. Li, and Ying-En Ge.We would like to thank the journal editors and reviewers for their constructive feedback and recommendations. We also like to acknowledge all the interviewees for their valuable time and insights, and to everyone who provided contacts for interviews, this study would be not possible without such kind collaboration. We would further like to thank the participants of the 2018 NOFOMA conference for the valuable feedback on a previous version of this article.

Citation

Zhang, X. and Schramm, H.-J. (2020), "Assessing the market niche of Eurasian rail freight in the belt and road era", The International Journal of Logistics Management, Vol. 31 No. 4, pp. 729-751. https://doi.org/10.1108/IJLM-12-2019-0351

Publisher

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Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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