Steel Silk Road is far away from the logistic situation

Many have wrongly assessed the positive effects of the "Steel Silk Roa
d" (rails connecting Asia and Europe) on logistics, Dr. Lim Jong-kwan
from the Korea Maritime Institute (KMI) reported in a recent study.
It has been said that if the Korea Trans-Rail (KTR) connects to the Tr
an Siberian Rail (TSR), it will allow cargoes from Pusan to reach into
central Asia and Europe, and make real those dreams of finally connec
ting to the continent.
Although this new vision is expressed as the "Steel Silk Road", many e
xperts have over emphasized the positive logistic effects of that visi
on, the report said.
Many have noted that rail transportation is much less expensive than o
cean transportation, both in terms of transit times and transportation
costs, when going between Pusan and Rotterdam in Europe.
This report, however, pointed out that that kind of opinion resulted f
rom misinformed views, and not an actual assessment of the competition
between the TSR and maritime transportation.
Looking into cargo capacities, the TSR has transported at most 110 TEU
from the early 1980's with no change. Ship capacities, on the other h
and, have increased to 6,000 TEU from 1,800 TEU in the 1980's, and thi
s trend in increasing ship capacities is continuing so that in two to
three years 10,000 TEU capacities should be available to the market.
This study exposed how trains cannot exceed ships in terms of economy
of scale. Comparing costs between maritime transportation and the TSR,
sea transportation efficiency is inclined to rise where the TSR is no
t.
Service to shippers would be improved in ocean transportation, whereas
the TSR would not be able to offer the same.
Looking at cargoes shipped by Japan and Korea on the TSR provides a cl
ear proof of this; cargoes decreased from 107,000 TEU in 1991 to a mer
e 45,000 TEU in 1999.