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of Engineering Czech Technical University in Prague
Freight Volume in billion ton km
256433 which shows a very high degree of variance in the cost
250000 of both modes.
2010 2050 forecast The second reference source is an article by
200000
Maritime Executive dated Dec 2017, which also
150000 compares the per Km cost of long-distance rail vs road
in the USA and Canada. Its results show that rail cost
100000 is almost 3 times higher than ocean freight. Based on
60053
50000 both the references and a few inputs from experts, we
30945 19126
6388 191 1111 4262 have considered that rail freight is a minimum of 2.5
0 times higher than ocean freight and this assumption
Sea Freight Road Freight Air Freight Rail Freight
Source: Freight Connections by DHL has been taken for cost comparison.
In the proposed route of IMEC, almost 40 percent of
the distance will be travelled by rail mode. This will lead
to higher freight costs in spite of the reduction in transit
distance by more than 1000 Km. Based on the referred
assumptions, the transport cost via proposed IMEC
route will be higher by approx. 35 percent excluding the
cost of transhipment at 2 points. These transhipments
will also have some costs like wharfage, stevedoring etc
and will further increase overall costs.
Apart from the cost factor, planned IMEC will have
higher usage of rail mode compared to the existing
route of Suez, whereas rail is less environment
friendly in comparison with shipping. As per a study
by Fraunhofer ISI and CE Delft, carbon emission in rail
mode is more than in maritime shipping. On shorter
hauls of inland waterways, the emission may be higher
than railways. The proposed route is substituting
approx. 3700 Km maritime shipping with 2600 Km of
will be similar to other trade lanes. Mumbai to Piraeus rail corridor. This means no direct reduction in carbon
via Suez Canal is approximately 7637 km (4124 nautical emission is expected from IMEC. But once rail mode
miles), which takes approx. 15-16 days shipping time uses power generated from nuclear power plants,
(considering 11 knots per hour). This route goes without there will be a reduction in carbon emissions and
any transhipment of cargo. In the IMEC scenario, this benefit to the environment.
travel distance will reduce to approx. 6600 Km (Mumbai In spite of higher logistics costs, the proposed IMEC
– Dubai:1335 NM; Dubai to Haifa: 2600 Km and Haifa makes a very strategic sense for the future. In immediate
to Piraeus: 828 NM). This route may take a voyage time tangible terms, the route provides a trade-off between
of approx. 9 days considering the same cruising speed time and freight cost. This will lead to a faster flow of
of ships and 1.5 to 2 days will be required for train goods between Europe, the Middle East and Asia. On
connection between Dubai and Haifa. This time excludes a larger landscape, IMEC will be providing an option
the transhipment time for Dubai port and Haifa port, to handle increasing cross-border trade volume and
which can be considered one day in the optimal scenario mitigation of risk related to the Suez Canal. So far Suez
(12 hours for a single transhipment in a port including has handled a maximum of 107 ships in a day with
placement of ship and trains). So, the time from Mumbai 6.3-million-ton cargo. Global trade is growing at a fast
to Piraeus will become 10-11 days in total, saving 5-6 pace and as per a study by DHL freight connections, sea
transit days for any container. The scenario may vary freight is expected to grow more than 4 times between
slightly in the case of bulk / non-containerised movement. 2010 and 2050. With growing volumes, more challenges
On the other hand, the IMEC route will have an can be expected in the Suez Canal leading to a bottleneck
impact on shipping costs as well, due to variance situation for the supply chain. Suez also poses a risk of
in ocean freight vs rail freight and two additional disruption in the global supply chain caused due to any
transhipments. The freight cost varies based on unforeseeable blockage as happened in 2021. The cost of
various factors like mode, distance, volume, handling such blockage is exorbitant for the global supply chain.
requirement etc. In the absence of an absolute IMEC will not only provide a faster alternate route between
cost comparison between rail and ocean mode, we India and Europe, but it will also open newer growth
have referred to two different available studies from opportunities and lower supply chain risk. 
two different continents for per Km per container
transport cost comparison for a long-haul route. The Vikash Khatri is the founder of the logistics & supply chain
first source is from a research paper of the Faculty advisory and execution support firm Aviral Consulting
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