Talk with Alexey Grom, CEO UTLC ERA

March/April 2020 |Rynek Kolejowy (print) |Poland

  Jakub Madrjas, "Rynek Kolejowy": There are more and more corridors that can be used for rail transport between China and Europe. Which one is the most important?
Alexey Grom, CEO of UTLC ERA: The basic corridor that we use - we call it UTLC Basic Route - runs through the infrastructure of Kazakhstan, Russia and Belarus - from the Kazakh-Chinese border to the Brest-Maleshevich crossing. We have an additional corridor that leads on the final section through the territory of Lithuania to Kaliningrad, where we also have a border with Poland.. The key to choosing a route is to meet the needs of the customer who must gain full confidence in rail transport.
In Poland there are some concerns related to the route to Kaliningrad, which bypasses our country. Why was it decided to open it?
I will answer this way: the maximum volume that can be served by European rail infrastructure is around 680,000 TEU. This is not enough even for our own plans, which cover one million TEU per year. Hence the need to open new corridors, such as the route to Kaliningrad. Anyway, you can also get to Kaliningrad via Poland, not only Lithuania. This route gives us a lot of advantages, because the port in Kaliningrad enables servicing ports of the Baltic Sea, including Gdańsk and Gdynia. Adding more options to the Silk Road therefore increases its capacity, of which our Chinese partners are very happy; in addition there are other innovations such as extending trains or increasing loading on the way from Europe to China.
3.5 years ago, when UTLC began the first regular transport Europe - China, Polish companies talked about 17 to 20 thousand TEU as the maximum volume that they can handle for us. Now it is 30 or even 35 thousand TEU and I think that we still have the opportunity to increase this number. To achieve this, however, we must integrate more - not only when it comes to the integrated use of infrastructure, but also in terms of technological and organizational potential.
The idea of the Trans-Caspian route is also being developed. What do you think about it?
In my opinion, every route has the right to be developed and if we look at it from the customer's point of view, it is very important for them to be able to choose between different routes. Competition cannot be excluded from our lives. However, what we offer to all route managers is cooperation. A simple example: I have a shortage of rail cars, so I ask my neighbor if there is a surplus that I can use. Competition should not be aggressive, but rather take into account that the future of the entire railway infrastructure depends on our actions. That is why it is not in my interest for the competition to be at a low level, because it translates into a negative image of the whole railway, and thus of my transport.
Another frequently reported problem is the imbalance between load level of containers going from China with those that are shipped in the opposite direction. How are you dealing with this?
This is by no means an exceptional situation in transport as such. This is how the world is constructed. Even the transport of petroleum products always takes place with an empty tank in one direction. An attempt to balance transport is the daily bread of a logistics operator and one of our main tasks. We started operations with a container loading rate from Europe to China of around 50% and in recent months we have reached about 80%. This shows that our European customers have a growing need to fill these containers - and this is not surprising, because China is a great, capacious market. Few people know that China is, for example, not only one of the largest exporters of apples, but also ... one of their largest importers. It is very important to provide clients with information about these possibilities and the potential of our services.
More important than prices?
Everything is important, of course the rate also. This is basic knowledge, even the foundation: we will not be able to compete with sea transport by price, not for the next ten years. But it can get closer to it, make the difference smaller, to convince more customers to take advantage of rail advantages over sea transport, such as travel time. That is why we do not leave profits in our pocket, and we immediately invest everything back into market development.
And can railway use its advantage of greener transport than air transport in the coming years?
This is certainly a chance, but we must be open to changes. In our opinion, the time has come for alliances - this is required by customers who want to be provided with constant, predictable service. The aviation industry has a very developed system of alliances, as does sea transport. The time has come for rail alliances.