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Is the Shanghai rail link one answer to Europe's supply chain problems?
Updated 00:55, 28-Oct-2021
Ryan Thompson in Hamburg
Europe;
02:16

 

The maiden voyage of a new Shanghai-Hamburg freight train arrived in Germany on Tuesday with more than 40 fully loaded shipping containers.

The operator said all inbound trains to Hamburg are fully booked until the end of the year, a sign of the demand by suppliers to move goods in a timely manner. 

The freight line slashes the average travel time of cargo traveling from China to Germany by ship.

"When you think about the shipping crisis going on in the sea, this can be balanced via railroad," said Hamburg Deputy Mayor Peter Tschentscher.

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The Shanghai-Hamburg rail link is not the first line connecting China and Germany. Dozens of trains already arrive weekly in the North Rhine Westphalia, carrying toys, electronics, and auto parts to Europe's largest inland port.

Signs of a global supply chain crisis are becoming increasingly visible in Europe. Empty store shelves are reported in the United Kingdom and Germany, while the port of Antwerp in Belgium has reported historic demand for its facilities, while others across Europe have struggled with demand. 

Experts said the crisis shows no immediate sign of letting up and could drag on for at least another year.

The economic cost could mean a years-long delay to full eurozone recovery from the COVID-19 pandemic. Recent data suggested the rebound is losing momentum because of supply bottlenecks, rising manufacturing costs, and increasing inflationary pressures.

 

In figures:

· First run: Fifty 12-meter containers loaded with clothing, shoes, glassware, automotive parts, cooking utensils, furniture, and more consumer goods. 

· One train per week will leave Shanghai for Hamburg - which could increase to three with demand. 

· Departures until the end of the calendar year are fully booked.

· 2.4 million containers are handled between the port of Hamburg and China each year. Every third container in Hamburg is bound for or originates from China.

 

The head of Ocean Network Express, one of the world's top shipping companies, urged governments to boost investment to increase the capacity of ports, railways, and warehouses.

"There needs to be some government support here to maybe switch people out of some parts of the economy where demand is not so strong to more critical parts of the economy where the demand is very strong and important for global supply chains," CEO Jeremy Nixon told the Financial Times.

It's likely that those types of investments could take many years to fully come to fruition.

However, other new trade links in and out of Europe are being sped up to ease the supply chain squeeze.

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