Geopolitics cast shadow over New Silk Road
The operators of the trains and companies that use them say they have yet to see any repercussions from the conflict in Ukraine.
“There have been no delays”, insists DB Schenker, Deutsche Bahn’s freight arm.
Yet, mindful that it is a route whose future depends as much on the goodwill of Vladimir Putin, Russia’s president, as the mercantilist ambitions of Mr Xi, companies like HP are also dusting off contingency plans.
Ronald Kleijwegt, the man in charge of European logistics for HP, likens the possibility of an interruption in service to the closure of the Suez Canal due to turmoil in the Middle East. “There’s always a risk nowadays,” he says. “We always have a plan B.”
The vast majority of the trade between China and the EU still moves by sea. Each of the four to five trains from China that arrive in Duisburg weekly carries 40-50 40-foot containers. Modern cargo ships carry thousands.
But the rail volumes between Europe and China have been growing rapidly and are becoming harder to ignore. DB Schenker, Deutsche Bahn’s cargo unit, says its own trains have carried the equivalent of 40,000 20ft containers between Europe and China over the past two years. It only launched the service in 2011.
The attraction of the route is simple: it offers what to some companies looks like a much more efficient version of globalisation. Door to door, the journey from China to Duisburg for HP’s products takes an average 22 days by train, or half what it can by sea, and costs just 20-25 per cent more, Mr Kleijwegt says. HP has more direct control over the train route, which makes it more predictable than by sea where even big companies can be at the mercy of sometimes erratic shipping schedules.
HP’s plans are, for now, to increase its use of the overland route. But that all depends on Russia’s borders with Europe remaining open to trade and Mr Putin’s own calculations, some of which may be long term.
For now, the Kremlin is eager to keep China on its side. However, China and Russia are fundamentally strategic rivals in central Asia, says Niklas Swanström, who heads up the Silk Road Studies Programme, a joint venture between Johns Hopkins University’s School for Advanced International Studies and Sweden’s Institute for Security and Development Policy.
Beijing and Moscow have rival rail plans for connecting China to Europe, he points out. In the long term Mr Xi’s proposed Silk Road wends its way around Russia rather than through it. Russia, meanwhile, is promoting the existing trans-Siberian line as the main trunk route to China from Europe.
The risk Mr Swanström sees is that Russia could start using the rail connections much as it has its natural gas pipelines into Europe: as a strategic tool that it can shut on and off.
The saving grace for Europe may be that any such move could pose bigger long-term risks to Moscow than to European governments, or even China, he argues. “Russia has very little to offer China over time other than natural resources,” Mr Swanström says, whereas the EU is China’s biggest export market.
At Duisburg, the trains to China keep coming and going for the time being. But officials there are conscious that the geopolitical shadow could darken. “I would be surprised if this will continue as smoothly as it has in the future,” says Julian Böcker, spokesman for the port. “We don’t know where this is going.”