China’s state-run Global Times on Sunday noted the Red Sea shipping crisis has entered its third month — despite the Biden administration ostensibly putting together a multinational security alliance to protect ships from the Iran-backed Houthi terrorists of Yemen — so China is stepping in to offer its railroad network as a “viable alternative.”
Shipping demand is increasing as the Lunar New Year holiday approaches and long detours to avoid the Red Sea are both inefficient and expensive. The Global Times suggested companies like Maersk, which just announced the indefinite suspension of shipping through the Red Sea and Suez Canal, should think about the China-Europe freight train service instead.
This photo released by the Houthi Media Center shows Houthi forces boarding the cargo ship Galaxy Leader on Sunday, Nov. 19, 2023. Yemen’s Houthis have seized the ship in the Red Sea off the coast of Yemen after threatening to seize all vessels owned by Israeli companies. (Houthi Media Center via AP)
Trains are usually more expensive than massive cargo ships and they lack the capacity to match the immense volume of Red Sea shipping, but China is telling potential customers those costs might look more acceptable with swarms of Houthi drones and missiles coming over the horizon:
Trains can make the trip in about 12 days, compared with about 40 days for ships, industry sources said.
But traders are grappling with price differentials. “The use of China-Europe freight trains is an option, but they run less often and often mean higher costs compared with ships,” Gao Yangjiang, general manager of Ningbo Rapid International Freight Agency Co, told the Global Times.
“More traders are using China-Europe freight trains, but there’s no fundamental solution to the Red Sea crisis at the moment. Rail shipping accounts for less than 3 percent of sea transportation, and it’s very difficult to increase that by even one percentage point,” Kang Shuchun, a director of the China Federation of Logistics and Purchasing, told the Global Times on Sunday.
This photo released by the Houthi Media Center shows a Houthi forces helicopter approaching the cargo ship Galaxy Leader on Sunday, Nov. 19, 2023. Yemen’s Houthis have seized the ship in the Red Sea off the coast of Yemen after threatening to seize all vessels owned by Israeli companies. (Houthi Media Center via AP)
According to the Global Times, inquiries about Chinese railroad shipping have “significantly” increased during the Houthi crisis but pressure to ship by all available methods might decrease after the peak demand of Lunar New Year passes in February.
The New York Times (NYT) on Saturday warned that higher shipping costs will start hitting consumers soon, adding to the misery of high inflation. Some analysts worry the Red Sea shipping disruption could begin to resemble the massive disruptions of the Wuhan coronavirus pandemic if the situation does not improve soon.
