Roads are gradually eroding rail freight dreams as China builds out the initial modern highway sections of its New Silk Corridor initiative.
Dreams of a bold new Chinese financed silk corridor giveaway are behind the scenes taking execution shape. Lots of it will be a financed highway network growth.
EVIDENCE? Kazakhstan, rather than Mongolia, is the first link west from China as construction of the first phase HIGH CAPACITY paved highway network is actually underway.
Started slowly after 2009, a modern multiple lane truck capable highway network already links western China and much of eastern Kazakhstan. Journey’s from local villages to sub regional cities with this geography have been shortened by the first improved highways in some cases from ten hours to less than three.
Slowly construction appears to be improving and expanding the older lane and a half width Soviet road network during 2014-2016 — gradually spreading west towards Western Europe.
Not unexpectedly, the first links were east into China. Because China wrote the checks and bought the Kazakhstan resources and commodities.
Under the label WE-WC, the Western Europe to Western China corridor funding is opening up high valued goods logistics to more and more short, Mid distance, and yes even long distance trucking. Rail freight now sees much more truck/road competition for the Asian freight market share.
Where have we seen this before? Ah yes, the Eisenhower sponsored US Interstate Highway program some 60 + years ago. And in India as highways are being improved faster than India’s railway capacity is.
The early benefits are for linking the shorter to mid length Western Asia communities together. Think Baltimore to Philadelphia. Think Berlin to Warsaw. These short to mid distance lengths of haul less than 500 kilometers are expanding sub regional trade and commerce ties. Not as glamorous as in Berlin to Beijing, or long distance Philadelphia to Los Angeles. But critically important to jump start local region growth.
LONG DISTANCE EURASIA SURFACE FREIGHT TODAY IN 2016
And as one traveling journalist (Wade Shepard) points out in his published works, lots of wine and other valued goods are moving as much as 5,000 to 8,000 kilometers between central China into central and Western Europe. Mostly by trucks.
Trucking is considered more reliable. With low driver wages, not much more expensive than what is charged by the national rail companies. Truckers often charge less than 7 cents US equivalent per ton-km. Service in either direction takes as little as 7 to 9 days by truck.
Rail can cost 10 cents or more per ton-km and take 14 to 21 days.
Trucking to an east coast China port and then by giant 18,000 TEU vessel can take between 25 to 29 days. Longer if the shipper opts to pay an even lower price. But the truck/ocean price paid is overall less than 4 cents per ton-km. Sometimes less. Which is why the water option according to most experts is calculated at a whopping better than 95% range.
Trucking at maybe a 4% market share.
Rail freight at 1% or less. I am ignoring air freight.
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For more, read Wade Shepard @vagabondjourney. He cites the following.
China’s “New Silk Road” A massive infrastructural and political project that’s overtly opaque, extremely relevant, and globally important that spans across a massive swath of geography. Capital cost to build might be in the three trillion dollar equivalent range. No one is sure. Closely guarded state secret.
Even the route and the physical capacity details are sketchy. Shepard’s travel out into the Asian “boondocks’ shows that although there are currently many contrasting versions of the actual routes, the vision behind this plan is to build a network of rail lines, highways, logistics centers, and new cities connecting China with Central Asia. And yes, with Europe
Geo-politically, it’s already fairly well under constructed. Certainly the highway portion is.
Though it’s being developed somewhat quietly, this project and its broader implications will be one of the big global stories of the coming decades. But a lot of it will be highway based changes. It’s much more than a railroad story.
There are also large scale pipeline and maritime project details. You might scan his research papers for more of his local color field reports. Jim Blaze Sent from my iPad ==============================
Riding the New Silk Highway: New Road Connects Europe and Asia //by Wade Shepard @vagabondjourney
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