2024-01-09 06:06:27
Title: International Importers Consider Land Shipping as Red Sea Crisis Disrupts Sea Transport
The ongoing crisis in the Red Sea has prompted international importers to reconsider land shipping as a viable alternative amidst the significant increase in cost and lengthening of sailing time for sea transportation.
Due to repeated attacks by the Houthis, importers, particularly in Europe, are exploring the option of switching to imports via trains from China instead of ships. While shipping by sea is generally cheaper than shipping by land, the avoidance of major shipping companies from crossing the Red Sea has led to a drastic increase in the price of shipping a 40-foot container by sea on the Far East-Israel line, jumping from about $2,000 to about $7,500.
The report highlights that the lengthening of the sailing duration significantly reduces the availability of ships and adds approximately a million dollars to fuel costs. Currently, the voyage from the Far East to Israel takes about 50-60 days, while the journey to Northern Europe lasts about 70-80 days.
In comparison, air shipping, while quicker, is considered the least economical option. The cost of air transport from the Far East to Europe is about 100-200 thousand dollars for 20 tons.
Land shipping from China to Europe, particularly Germany, takes about 18 days and may save Europeans 40 shipping days compared to sea shipping, for approximately $10,000 for a trailer with a similar volume to a 40-foot container.
However, for Israel, the land solution saves only ten shipping days, as the trains do not have the ability to go through a direct land route to Israel and must take a more cumbersome route through European destinations.
Despite the current higher cost of land transport, industry experts believe that the time-saving of about 40 days may tip the scale in favor of using this alternative, especially if the prices of sea transport increase or the supply of space in the land alternative becomes more available and lowers transportation costs significantly.
Additionally, for the Chinese, exporting by train not only brings economic benefit, but also aligns with the modern “Silk Road” flagship project driven by Chinese President Xi Jinping. The project aims to establish infrastructure such as seaports and airports in approximately 150 countries and has seen a significant increase in transport trips and TEUs transported.
As the crisis in the Red Sea continues to disrupt sea transport, the potential of the “New Silk Road” as a viable alternative for international trade continues to rise, offering a network of railroads stretching from the Chinese eastern coast to central Europe.
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