British website: How does the Red Sea crisis affect the economy between China and Europe?

The British website, The Loadstar , which specializes in economic affairs, said that the increase in rail shipments between China and Europe could negatively affect the economy if the Red Sea crisis ends.

After two years of decline, freight volumes by rail between China and the European Union are back on track, with westbound flows up 130% year-on-year last year, partly due to the Red Sea crisis, the site explained in a report translated by "Yemeni Youth Net".

Freight volumes from China to Europe topped 330,700 TEU, with 49,730 TEUs going the other way. While this represents the lowest since 2017 – and a 26.7% year-on-year decline – combined China-Europe freight volumes are up 80.2% in 2023, according to the European Rail Alliance.

Supply chain analytics platform Opply said the disruption was one factor in the surge in shipments from China to Europe.

“During 2024, freight rates on containerized sea routes between Asia and Europe rose again, due to disruptions caused by Houthi rebel attacks in Yemen in the Red Sea. This enabled rail freight to regain its competitiveness,” she said.

But she warned against relying on the Red Sea for growth, noting that if the Middle East ceasefire holds and the Houthis refrain from attacks on shipping, shipping rates could fall significantly.

“The expansion of sea routes has partly made it possible to absorb excess capacity, which is expected to be enormous if the situation returns to normal. Chinese exports will then be able to rely on low-cost sea transport and seamless access to energy,” she added.

“At present, China-EU rail freight remains an instrument that needs improvement, both operationally and in terms of pricing,” she continued.

Overall, Chinese exports to Europe enjoyed a healthy 12 months, up 3% year-on-year, according to preliminary data from Chinese customs, with a total value of $516.6 billion.

With Europe's manufacturing sector struggling, China's automakers had a particularly strong year, growing 192% to 31,304 TEUs, accounting for 9.5% of total export flow.

With all the talk of tariffs coming out of Washington, this could be vital in the coming years, especially with suggestions that President Trump’s hostile rhetoric against the bloc could force Europe to move closer to China.

If rail can hold its ground, one country looking to benefit is Poland, which handled more than 88%, or 292,950 TEUs, of volumes coming from China.

Four years ago, Poland overtook Germany as China's main gateway for freight to Europe by rail, and last year's figures held up well, with the eastern European country posting a 149% year-on-year increase.

After reaching 150,000 TEU in 2021, flows to Germany collapsed, but returned to growth in 2024, albeit at a “historic low” of just 23,790 TEU.