China's national railway system delivered 2.35 billion tonnes of cargo in the first seven months of 2026, marking a modest 0.7% year-on-year increase, with average daily wagon loadings reaching 187,000 units, up 2.1%, according to data released on August 19 by China State Railway Group Co., Ltd.

Nationwide statistics from the National Railway Administration paint a slightly stronger picture, with total cargo volume reaching 3.052 billion tonnes in the January-July period, up 1.4% year-on-year. Breaking down by commodity, coal shipments totaled 1.61 billion tonnes (up 2.4%), containerized freight reached 638 million tonnes (up 7.2%), and grain shipments hit 33.51 million tonnes (up 3.4%).

Despite the cumulative growth, July brought a notable contraction in monthly performance. The national railway system moved 430 million tonnes of cargo in July, a sharp 4.7% decline year-on-year, marking the second monthly drop of the year following a marginal 0.4% decrease in June, with the pace of decline accelerating.

Where the growth is coming from

For key commodities, China State Railway Group reported that national railway coal shipments reached 1.216 billion tonnes in the first seven months, including 813 million tonnes of thermal coal, while coal inventories at power plants served directly by railways remained at elevated levels. Chemical, grain, and textile category volumes grew by 7.4%, 5.4%, and 21.4% respectively during the same period.

Rail logistics products have shown particularly strong momentum. The first seven months saw 165 new "one-bill" rail-sea intermodal products launched, with 71,600 TEUs booked, driving a 9.2% increase in containerized rail-sea intermodal volume. Rail-road combined transport reached 294 million tonnes, surging 80.9% year-on-year. A total of 96 special cotton trains departed from Xinjiang, contributing to a remarkable 157.3% jump in cotton transport volume. The railway operator also signed 1,523 total logistics contracts covering 1.236 billion tonnes of contracted volume.

China-Europe (Asia) freight trains maintained strong growth, with 21,570 trains dispatched in the first seven months, up 10.3% year-on-year. Of these, China-Europe trains accounted for 12,988, a 17.6% increase, while China-Central Asia trains numbered 8,582, up 0.7%.

The coal-heavy Datong-Qinhuangdao railway line, operated by Daqin Railway Co., Ltd. (601006.SH), continued its recovery trajectory. The line transported 235 million tonnes in the first seven months, up 6.70% year-on-year, though July volumes slipped 0.82% to 31.53 million tonnes.

For the full year 2025, the national railway operator targets 4.13 billion tonnes of freight, representing 1.5% growth. Current progress stands at 56.9% of the annual target, with growth rates still lagging behind projections.

Passenger numbers rise while monthly figures dip

Passenger traffic painted a similar picture of cumulative growth with monthly softness. Nationwide railway passenger volume reached 2.8 billion trips in the first seven months, up 4.1% year-on-year and setting a new record for the period, with an average of 11,462 passenger trains operating daily, an increase of 571 trains or 5.2%.

Cross-border services showed robust expansion, with the Guangzhou-Shenzhen-Hong Kong high-speed rail carrying 20.049 million cross-border passengers (up 11.5%) and the China-Laos railway handling 214,000 cross-border travelers (up 38.2%). Foreign passenger volume reached 14.852 million trips, a 32.5% surge. Tourism trains totaled 2,159 in the first seven months, including 1,184 dedicated tour trains and 975 special route services, along with 79 customized fan-themed trains for concerts and sporting events.

July passenger figures, however, declined 0.6% year-on-year to 452 million trips, mirroring the cargo trend.

Why just 10 ASX 200 shares?

An industry insider explained that the divergence between national railway performance and the broader network stems primarily from regional railway operators. These local lines, which typically serve mining spurs, port collection and distribution routes, and short-distance commuter services, are more tightly coupled to regional industrial activity, port throughput, and local travel patterns, making them more susceptible to short-term fluctuations.

In July, adjustments in downstream industrial production schedules, weaker port cargo flows in certain regions, and rainfall affecting regional short-distance travel contributed to a temporary softening in the local railway segment, dragging down the national monthly figures. However, the cumulative year-to-date metrics still show overall growth, indicating this is a temporary monthly fluctuation rather than a structural downturn.

The national and local railway networks serve complementary roles. Going forward, the national operator will strengthen coordination with regional rail companies to enhance overall transport capacity.

What the second half holds

Acknowledging that freight growth still trails annual targets, railway authorities outlined their strategy for the remainder of the year. Coal remains the cornerstone of cargo volumes, particularly as the winter energy supply period approaches. The operator will leverage heavy-haul corridors including the Daqin, Haoji, and Tangbao lines to ensure stable cross-regional thermal coal transport.

Growth opportunities lie primarily in general merchandise and multimodal transport. With rail-road intermodal already expanding rapidly and rail-sea "one-bill" products gaining traction, container volumes represent a key growth area. Plans include enhancing multimodal product offerings, deepening the shift from road to rail, strengthening rail-port and rail-logistics park connections, and expanding scheduled intermodal train services to better align with shipping schedules.

The official cautioned that railway freight growth remains highly dependent on macroeconomic conditions, with regional industrial and port cargo fluctuations potentially constraining expansion. Rather than pursuing volume growth at all costs, the railway sector will prioritize supply security and operational efficiency, balancing volume growth with safety and service quality while addressing bottlenecks in collection and distribution networks.