China opens this month a railway from Yiwu to London, or by other words it connects Chinese network to English one. It is a breakthrough as the whole journey takes 2 and half week (boat around 5 weeks). Whole journey is thought Kazakhstan, Russia, Belarus, Poland...
It will be amazing to see the costs both towards England from backwards. Currently being around 5 USD a kilo I would like to see how much will quicker train be. It also changes the trade landscape, as trade will follow Silk road instead of traditional road by boat. Economies like Singapore, Shenzhen, Shanghai, Egypt may suffer as a considerable amount of budget depends on it. And it also affects banking and finance, as there will be different flow of capital following the new routes.
Difference by two and half weeks would decrease a cash flow need for companies and bring better response-rate to product-quality-development costs ratio. Following my calculation if the transportation of goods costs makes around 10% of the price of the goods from China (example from toy industry by boat) than a quicker way may be allowing the purchase managers to pay more for new mean of transportation (ceteris paribus). Expected increase may be in the range of %s though.
It might bring the issue with taxes and dues paid and being return (GST China issue). Also it might be interesting to see what will happen on borders in Poland, as the tax office there could have different approach to goods than Hamburg has (or UK port). There is also almost no big forwarder focusing on a trains from China with almost no infrastructure around the track.
No comments:
Post a Comment