During a recent tour through Asia, forwarders told Cargo Facts that their shipments of goods between Asia and Europe by rail was reliant on subsidies from the Chinese Government. They said the choice to select rail transportation over ocean freight was a decision based almost entirely on price. Even with subsidies, rail transport is roughly 70% the cost of air freight. Therefore, if the many subsidies were scrapped, rail could end up losing much of its price advantage. At least in the short-term however, there have been no efforts to curb subsidies. Forwarders also say that a weak Euro has balanced trade flows which were previously one-sided. Booking space on rail cars which, in the past, were coming back to Asia nearly empty, is now a challenge for forwarders.
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