The idea to link the Far East and Europe by rail took its origin with the construction of the Trans Siberian railway linking Moscow to Vladivostok, completed in 1916. With a length of 9,200 km, it is the longest rail segment in the world. It was initially used solely as an inland rail link. Still, in the 1960s, the Soviet Union started offering a landbridge service from Vladivostok using the Trans Siberian to reach Western Europe. However, geopolitical considerations would limit the adoption of this trade corridor by international shipping companies. In addition, the collapse of the Soviet Union in the early 1990s created a context of geopolitical instability within Russia and its former republics and a lack of investments and maintenance of the existing rail and terminal facilities. The idea of using the corridor as a transcontinental and transnational route was abandoned.
The beginning of the 21st century has brought renewed interest in a long-distance rail connection between Asia and Europe, especially with the booming Asian trade and the increasing pressure to ship containerized freight in a time-sensitive manner over long distances. These connections came to be known as the Trans Asian Railway, the Northern East-West Corridor, the Eurasian Landbridge, the New Silk Road, OBOR (One Belt One Road; a term used between 2014 and 2017 ) or the BRI (Belt and Road Initiative; a term used since 2017). The Belt and Road initiative underlines the importance of China in shaping the development of these infrastructure and trade corridors. China is seeking to expand trade relations in Central Asia through infrastructure development, including rail connections, inland terminals, and ports.
The main route uses the Trans-Siberian Railway either branching to Vladivostok with connections to Eastern China, branching to Kazakhstan, entering western China at Khorgos and Druzhba and then through the Lanzhou rail hub and onward to the coast of China or branching into Mongolia to enter China at Erenhot and then to the main Beijing hub.
All the necessary infrastructure exists to ensure the setting and operations of the Eurasian Landbridge, particularly along the Trans Siberian, which is double-tracked and electrified. The question remains to improve some segments to better integrate all the elements of this complex multinational transport chain. Among the numerous challenges the corridor is facing:
Multinational cooperation
There are seven countries involved in the rail land segment that are politically, economically, and culturally very different. Unlike the North American landbridge where rail segments are entirely contained within an individual nation (US, Canada, or Mexico) and owned by large rail companies, the multitude of actors requires a level of multinational cooperation. In 2006, the Trans-Asian Railway Network Agreement was signed by most of the countries the Eurasian landbridge is going through. This agreement tries to coordinate rail investments, customs procedures, and the setting of long-distance rail corridors.
However, a transport chain is as reliable as its weakest link. Kazakhstan, parts of Siberia (semi-autonomous administrative divisions), and even some parts of western China present political risks. In 2011, a customs union (the Eurasian Economic Union) was established between Kazakhstan, Russia, and Belarus, implying that all the goods transiting are subject to the same regulations. It is thus essential to ensure cargo security along the entire transport chain as well as the continuity of rail operations.
Break of gauge
The rail system operates on two gauges, standard (1.435 m; China and most of Western Europe) and broad (1.520 m; Russia and some Scandinavian countries), which imposes a technical challenge. It requires reloading or an adaptation of the equipment to gauge change. Moving cargo between China and Germany would involve two gauge changes. The first consists of a switch from the Chinese standard gauge to the Russian broad gauge. The second involves a switch from the Russian broad gauge to the European standard gauge. At each gauge change, containers are transloaded from one train to the other, side by side, in a thruport-like facility. Although containerization enables an efficient transfer of cargo, this still involves additional costs and delays. A key priority has been the setting of efficient gauge transloading facilities, such as Khorgos in Kazakhstan.
Economics
Long-distance rail services are facing several economic challenges undermining their commercial potential. This is particularly the case for the Eurasian landbridge.
- First, there are no doublestack services on the Eurasian landbridge, which significantly reduces the economic efficiency of rail. This is further exacerbated by the use of shorter trains. Therefore, the Eurasian landbridge is able to offer a speed advantage, but with limited scale economies as it is possible for North American rail corridors.
- Second, the usual optimal distance for rail freight services is around 3,000 km (in North America, it can easily go to 5,000-6,000 km for doublestack services), while the Eurasian landbridge involves 3 or 4 times that distance. It is thus very difficult to make these services profitable because of the higher transport costs involved for such distances.
- The third challenge concerns transit time. While reaching European locations such as Germany from China takes about 15 days, going further inside Europe can take up to 21 days, which is close to the same time it takes for a maritime service to reach Europe from China. Servicing European locations in about 2 weeks has some commercial advantages for many goods, particularly those of high value, but once this threshold is exceeded, maritime services start to make more sense since they are much cheaper compared to the marginal additional time they imply. Yet, this is a notable advantage for inland manufacturing activities.
- Fourth, we must look at the cargo itself. It can be difficult to find backhaul opportunities that would make the whole service more profitable. Since the Asia-Europe trade is highly imbalanced, the Eurasian landbridge is facing a challenge similar to maritime transportation, such as the repositioning of empty containers and equipment. Imbalances stand at 30-70 in favor of Chinese flows toward Europe.
- It is also worth considering that during winter, the Eurasian landbridge is going through regions experiencing very low temperatures. This is not suitable for certain cargo types and would require temperature control equipment.
In spite of these challenges, the prospects of the Eurasian Landbridge remain positive. For China, the Eurasian Landbridge could partially fulfill an opportunity to develop the interior provinces and avoid congestion at the coastal ports. In January 2008, a long-distance service called the “Beijing-Hamburg Container Express” was inaugurated, along with a service to Duisburg in 2009. The 10,000 km (6,200 miles) service takes 15 days to link the Chinese capital to the German port city, going through Mongolia, the Russian Federation, Belarus, and Poland. The maritime journey covering the same markets would take about 30 days. In 2014 the longest commercial rail service in the world was achieved when a train carrying 82 containers traveled from the city of Yiwu (a major manufacturing cluster in Zhejiang Province) to Madrid, a journey of 12,800 km that took 21 days. In 2017, the first service between Yiwu and London using the channel tunnel took 16 days. Since then, regular rail services have been established between China and several European cities. It is, however, difficult to assess which services are profitable and which are simply subsidized for a promotional purpose (up to 50% of the transportation costs are subsidized in some cases). The expectation is that these subsidies will attract cargo.