News

26.01.2021

Rail operators along the New Silk Road combine forces

In anticipation of further growth in the volume of goods, improvements especially in infrastructure are planned

The increase in the volume of goods being transported by rail along the New Silk Road urgently requires answers to infrastructural challenges as well as an increase in capacities for cross-border traffic. Rail operators, ports and other service providers are striving to achieve closer cooperation in order to ensure the frictionless transit of goods.

On the initiative of the Kazakh-Russian-Belarusian “United Transport and Logistics Company – Eurasian Rail Alliance” (UTLC ERA), top managers from Chinese, Russian and European companies held a digital conference in the name of the so-called “One Million Club” at the end of January to discuss developments during 2020 and, in particular, public and private sector initiatives to increase the number of containers being transported on the China-Europe-China rail route.

By 2025 the volume of goods being transported along the Eurasian rail route could rise to around a million standard containers (TEU). This figure was confirmed by Alexey Grom, the CEO of UTLC ERA. As Mr Grom explained, “The pandemic led to an increase in goods transport of sometimes more than 64 per cent in 2020. This trend shows that what is important now is not so much to speed up the trains themselves but rather to adhere to timetables and to increase the number of border crossing and customs clearance points.”

In 2020 UTLC ERA, which is responsible for 91% of all goods transport on the broad-gauge track of the New Silk Road, already transported 546,900 TEU from Europe to China and from China to Europe. This represents an increase of 64 per cent compared with 2019. There was particularly brisk trade in the transport of medical products and equipment, car parts, electrical goods and cooling agents. What also had a positive impact was the fact that since the spring of 2020 Russia has allowed the transit of so-called sanction goods, in particular fruit, vegetable and high-quality groceries, through its territory.

Pulling together instead of competing

It was the view of many participants that rail transport between Europe and China, which despite its growth still only accounts for about 3 per cent of the total goods transported, will increasingly complement freight transport by sea. In total, the number of containers transported between Europe and Asia every year is approximately 23 million TEU.

It was also pointed out at the meeting that, whilst sea freight was admittedly cheaper than rail freight, the journey time was several weeks - and sometimes even months - longer. By contrast, it was argued, the journey times for transport by rail were becoming ever shorter and already averaged just 12 days, with the number of trains being handled every day increasing. Moreover, calculations showed that rail transport creates 95 per cent fewer CO2 emissions than air freight.

According to UTLC ERA, 21 countries and 92 cities are connected to the Eurasian container transport network. Particularly for Germany, the advantage of rail freight is noticeable. Almost half of all goods trains that travel between China and Europe have Germany as their destination, which makes the country a hub between Europe and China. Last year, DB Cargo Eurasia, a subsidiary of Deutsche Bahn, handled 12,000 train journeys with a total of 200,000 containers – 300 train journeys more than in 2019. The trains operate on the 11,000-kilometre route between Duisburg or Hamburg and the Chinese economic centres of Chongqing, Xi’an, Hefei and Zhengzhou.

Fabio Amato, the Vice-President of the Italian railway company “Mercitalia Rail”, expressed the view that it was important for all companies from East and West that were operating on the Eurasian rail corridor “not to be in competition with one another, but to join forces and to develop and maintain models for cooperation.”

New solutions in rail transport

Since 2019 there have been new routes via the ports of Mukran and Rostock to Kaliningrad, from which Italy, for example, benefits. This means that Porto Quadrante in Verona, one of the largest logistics terminals in Italy, is cooperating with UTLC ERA and the port of Rostock and, in so doing, is contributing to the further development of multimodal routes.

As Alberto Milotti, CEO of Interporto Quadrante Europa Verona, the second largest logistics terminal in Europe, explained at the meeting, “The first shipments via multimodal routes are already showing enormous potential. However, the success of this new route depends on the degree of integration and the interaction of all the transport companies involved. So, we are looking forward to the continued development of this joint project.” The company is planning to expand its capacities in the coming years. For example, planning is underway to construct a 750-metre-long terminal.

The multimodal routes, rail-ship-rail, via the port of Baltysk in the Russian-Polish border area of Kaliningrad have proved themselves overall to be a good alternative for diversifying transport. The port in the Russian-Polish border area can handle up to 16 trains a day and is connected via short sea routes to the entire German Baltic region as well as to the Scandinavian countries.

Several participants made reference to the modernisation and innovation work that has already been undertaken. It was pointed out, for example, that work was underway to improve the energy efficiency of the trains and to speed up customs clearance at the border crossings between Europe and China as well as the reloading time for containers necessitated by the switch from the 1520 mm broad-gauge tracks in Kazakhstan, Russia and Belarus to the 1435 mm standard-gauge tracks in Europe.

In Kazakhstan, there are five new transit terminals planned. Furthermore, in addition to what has been up to now the most important border crossing at Brest between Poland and Belarus, new border crossings are being tested with a view to achieving a diversification of transport routes.

As Dr Carsten Hinne, CEO of DB Cargo AG, explained, Germany is also planning, in collaboration with UTLC ERA, to use the new route via Kaliningrad more intensively next year. Overall, the company intends in 2021, which has been declared by the EU Commission to be the European Year of Rail, to attach greater importance to the strategy of sustainable growth and to strengthen its presence in Eurasian rail transport. It is also planned to make use of more digital solutions and environmentally friendly technologies. This includes the paperless processing of transport orders or digital transport tracking.

Alexey Grom summed up the discussion as follows: “Our One Million Club is growing in popularity. The number of companies interested in collaborating is growing constantly. This is also evidenced by the great interest in our digital conference today. I am optimistic that together we can achieve an increase in TEU of 20 per cent in 2021 and that, in so doing, we can make further progress towards our medium-term goal of around a million TEU by 2025. It is, therefore, our overriding responsibility now to motivate each other to achieve new records, to identify bottlenecks and to deal with them together.”

For further information, please contact the Communications Department at UTLC ERA at +7 (495) 995-95-91 Teterina Maria, email: m.teterina@utlc.com