China-EU rail freight volumes returned to growth in 2024, benefiting in particular from a sharp rise in the vehicle segment. In the other direction, however, flows continued to decline.
After two years of sharp decline, rail freight volumes between China and the EU rebounded sharply in 2024, according to statistics from the operator European Rail Alliance. With a total of 380,434 TEUs, they are 80.2% up on 2023.
This increase is exclusively attributable to the growth in flows from China to Europe, which rose by 130.8% to 330,704 TEUs. Conversely, volumes from Europe to China fell by 26.7%, to 49,730 TEUs. This is the lowest score since 2017.
Figure 1 - Data source: ERAI
This development reflects the trajectory of foreign trade between China and the European Union. According to preliminary statistics from Chinese customs, China's exports to the EU, expressed in value terms, rose again in 2024. They totalled 516.5 billion dollars, up 3% on the previous year. Conversely, Chinese imports from the EU fell by 4.4% to $269.4 billion. You have to go back to 2020, the year of the Covid epidemic, to find a lower level.
Figure 2 - Data source: Chinese customs
East-West rail traffic characteristics
During 2024, freight rates rose again on containerised maritime routes between Asia and Europe, due to the disruption caused by attacks by Yemen's Houthi rebels in the Red Sea. This has enabled rail freight to regain its competitiveness.
Figure 3 - Source: Upply Freight Index
In the China-EU direction, since 2020 Poland has been the dominant gateway for rail freight, ahead of Germany, and its importance continues to grow. In 2024, 292950 TEU entered via Poland, representing 88.6% of total flows. This represents a jump of 149% compared with 2023, after two years of decline linked to the slowdown in demand and above all the outbreak of war in Ukraine, which disrupted operations.
China-Germany rail flows have also returned to growth, but remain at a historically low level of 23,790 TEU. The China-Belgium route came a distant third, with 7,900 TEU (+7.8%), while Hungary, in fourth place with 4,046 TEU, saw stable traffic despite a dynamic first half.
Figure 4 - Data source: ERAI
A detailed analysis by product type shows that traffic is increasing in virtually all segments in an East-West direction. Machinery and mechanical and electrical equipment (HS codes 84 and 85) dominate the market, accounting for 30% of volumes if the results of the two categories are taken together. But 2024 also saw strong growth in the vehicle segment (+192% to 31,304 TEU for products corresponding to HS code 87), and in furniture, bedding and lighting equipment (HS code 94), up 182.7%. Finally, if we add up the figures for the clothing, textiles and footwear sector (HS codes 60, 61, 62, 63, 64), we see that this type of product is in 3rd place after machinery and vehicles, with a total of 31,108 TEUs and year-on-year growth of 268.4%.
Figure 6 - Data source: ERAI
East-West rail traffic characteristics
In an analysis of China's economic performance in the third quarter of 2024, published on 8 January, the French Treasury noted "an increase in the divergence between production and consumption". Consumption remains weak both cyclically (+3.3% over the first three quarters) and structurally (32% of GDP)," the note said. In the EU-China direction, this situation is undoubtedly weighing on rail freight volumes, which are at a low, suffering from the contraction in demand in China.
On this route, Germany-China flows are largely dominant but are losing ground, with their share falling from 86% of the total in 2023 to 78.6% in 2024. Volumes fell by 33% to 39079 TEU, the same level as in 2017. On the Poland-China route, they increased by 24.3% year-on-year in 2024 to 8626 TEU, but are still well below the 2017 level.
In other words, in the EU-China direction, there is no real appetite for rail services. The upturn in 2020-2021 was largely due to exceptional factors, namely the Covid-19 crisis and the disruption to maritime transport, which was then marked by difficulties in accessing capacity and soaring prices.
Figure 7 - Data source: ERAI
Analysis by type of product shows a drastic fall in the flow of vehicles and associated parts (HS code 87). This category remains the most important in the West-East direction, but has fallen by 41.7% to 8579 TEUs. The fall is even more striking for machinery (HS code 84) and electrical equipment (HS code 85), with a drop of more than 70% in both cases. The fall in demand for these product segments hit Germany particularly hard.
Outlook
EU-China Rail freight is likely to continue to face headwinds in 2025. On the one hand, the conflict between Russia and Ukraine persists, creating uncertainty and preventing the full deployment of projects. Secondly, demand in China is likely to remain moderate, which will weigh on flows in the West-East direction. In the other direction, China's ambitions for the European market, particularly in the automotive sector, could be a factor favouring the development of flows. This is all the more true given that if the Trump administration implements the announced tariffs on Chinese products, China will more than ever need to turn to other markets, particularly Europe.
However, it is not certain that this will benefit rail freight to any great extent. Indeed, even though the conflict in the Red Sea did not cease in 2024, freight rates fell overall in the second half of the year as ships passing through the Cape of Good Hope became the new norm. There was a slight overheating at the end of the year, but it was moderate and did not last. The ceasefire agreement reached in mid-January between Israel and Hamas may pave the way for a further fall in maritime transport prices on the Asia-Europe route, which would further undermine the competitiveness of rail freight. A few days after this agreement was reached, the Houthis themselves announced a truce in attacks on ships, and on 22 January they freed the crew of the Galaxy Leader, who had been held hostage for over a year.
The ceasefire is extremely fragile, and attacks could resume at any time. The shipping company MSC announced on 21 January that, as things stand, its ships will continue to pass through the Cape of Good Hope. However, if the process of appeasement is confirmed, allowing ships to pass through the Suez Canal once again, there is a risk of a significant drop in maritime freight rates, since the extension of maritime routes had in part made it possible to absorb an overcapacity that promises to be massive if the situation returns to normal. Chinese exports will then be able to count on low-cost maritime transport and fluid access to capacity. For the time being, rail freight between China and the EU remains a tool with room for improvement, from both an operational and pricing point of view.
However, China's rail freight strategy is clearly not limited to trade with the European Union. Overall, China Railway Express, which handles flows to Russia and non-EU European countries, carried 2.08 million TEUs last year (+9.2%), including 1.14 million in the East-West direction (+12.9%) and 935,780 TEUs in the other direction (+5%). The number of journeys also increased, with a total of 19,392 trains (+10.7%), including 10,546 in the China-Europe direction and 8846 in the Europe-China direction (+8.1%).
