Due to the COVID-19 pandemic, china-Europe freight trains have effectively guaranteed smooth trade routes for imports and exports between China and Europe. Statistics show that by the end of January, more than 50,000 China-Europe freight trains had operated, carrying more than 4.55 million TEUs of goods worth 240 billion US dollars, reaching 180 cities in 23 European countries, making positive contributions to the high-quality development of the Belt and Road Initiative.

However, with the Ukraine crisis and other changes in the international situation, some routes of China-Europe freight trains have inevitably been affected. At present, what obstacles and risks do the China-Europe freight trains encounter on their way forward? And how should Chinese companies respond?

Short-term stress

Since the outbreak of the Ukraine crisis in March, the short-term difficulties faced by China-Europe freight trains are emerging.

First of all, the frequency of operation is greatly reduced. It is reported that since March, the export volume of railway goods from The Chinese port of Dalian to Europe has fallen sharply, with freight volume increasing by an average of more than 70 percent in the first two months of this year. A total of 300 TEU (equivalent containers) have been cancelled for the Hefei China-Europe express, totaling 6 whole trains.

Secondly, transportation in conflict areas and even surrounding areas is partially limited, and the impact of the global epidemic has extended the shipping period of freight trains.

Again, freight drops. For example, from Chengdu to Duisburg, a container freight of electronic products without batteries is about $12,000 at present, which may drop to about $10,900 including container rental in April. In addition, there is a risk of seizure. Due to the eu's escalating sanctions against Russia, there are also cases of goods being detained in transit by the EU for non-military purposes.

Compared with the obstacles encountered in running lines, some shipping enterprises in Hebei, Chongqing and other places report that the current difficulties encountered in goods settlement are more obvious. The United States, along with the European Union, Britain and Canada, announced that some Russian banks would be removed from the SWIFT international settlement system, leaving trade with Russia unable to be settled in dollars and having to be settled in other currencies.

Wan Zhe, a researcher of The Belt and Road Institute of Beijing Normal University, said in an interview with the International Business Daily that the current shipping enterprises should adopt a variety of ways to deal with the current difficulties. On the one hand, comb the capital access and evaluate whether the capital is safe. Shippers need to map transactions involving sanctioned financial institutions and assess the impact of sanctions on specific transactions. At the same time, check whether the fund path of russia-related transactions involves financial institutions of a third country, determine the currency involved, project background, transaction subjects, etc., and evaluate the impact of freezing measures taken by financial institutions of a third country on enterprises. On the other hand, the use of cross-border RMB settlement is encouraged. As the payment risks caused by European and American sanctions against Russia are increasing, it is suggested that commercial transaction entities adopt cross-border RMB settlement.

Wan zhe also reminded relevant enterprises to pay attention to exchange rate changes. Due to the sanctions imposed on Russia by western countries, the ruble depreciates sharply against the RMB, which significantly increases the import cost and procurement risk of Russian buyers.

Overall controllable operation

At present, Chinese departments and enterprises are actively and effectively coping with the impact of the Conflict between Russia and Ukraine. Operators of China-Europe freight trains are doing their best to retain large freight customers such as white goods and cars. Some operators are exploring offering freight insurance-like services to shippers to ease market concerns; Railway departments also began to take corresponding measures, such as in the case of goods less than 50 teU continue to keep the train running, so as to maintain the density of the train running; Local customs are also helping enterprises tide over difficulties.

The good news is that recently, Freight trains from Wuhan, Lianyungang, Shenzhen, Gansu and other places have set off for Europe. It is worth mentioning that on April 3, wuhan Hanou International Logistics Co., Ltd. released data showing that 104 china-Europe freight trains (Wuhan) were shipped in the first quarter, totaling 8,570 TEUs and worth about 2.508 billion yuan, up 60%, 59.23% and 7.59% year-on-year respectively, achieving a "good start" in the first quarter.

"On the whole, the operational risks of China-Europe freight trains are generally controllable. In the long term, only a very small percentage of china-Europe freight trains pass through conflict zones, and infrastructure remains intact and recovers relatively quickly. In addition, after the development of recent years, the operation of China-Europe freight train has gradually matured, the model is scientific, the situation of 'return empty container' has been greatly reduced, in the long term, the carrying capacity and profitability of the line are relatively optimistic." 万喆 said.

Under the current circumstances, Wan suggested that the government provide timely guidance and policy support, find other routes to replace or strengthen shipping capacity, and recalcitate logistics costs to optimize china-Europe logistics routes. It is suggested that enterprises strengthen risk awareness and fulfill the main responsibility of direction control.

万喆, for example, in the countries and regions set up along the overseas warehouse base in the construction of logistics nodes, on the one hand, can be scattered or avoid a situation caused by the concentration of risk, return supply planning organization, on the other hand also can make overseas warehouse central trains of overseas sourcing center, distribution center and distribution center, to further solve the china-eu trains a return to the problem of insufficient supply of goods. At the same time, we should make various contingency plans and sign long-term agreements as far as possible to avoid more price risks and legal risks. Share the risk through financial instruments such as insurance.