Number of Containers Transported over New Silk Road Track Approaching One Million
The container traffic volume between Europe and China along the New Silk Road has been growing in 2021. The integration projects and new logistics solutions implemented at the Eurasian railways are becoming a benchmark for other international transport corridors. Alexey Grom, General Director of UTLC ERA, expects up to 20% further traffic volume growth.
Economic recovery in Asia and Europe in 2021 has led to increased demand for logistics services. The route between Europe and China has become the world’s fastest-growing rail freight traffic route. By the end of 2021, the number of containers transported by the New Silk Road between two major economies will approach record-high 1,000,000 TEUs.
Stability of the New Silk Road
Alexey Grom, Chairman of the Management Board of United Transport and Logistics Company – Eurasian Rail Alliance (UTLC ERA JSC), a Eurasian logistics operator, links the growing traffic volumes to rail transport stability during the crisis. “One of the main competitive advantages provided by the rail transport as compared to other modes of transport is its ability to remain stable even in challenging times. The pandemic clearly revealed the best competitive qualities of the rail transport: reliability, timeliness, environmental friendliness and stable tariffs.”
Benchmark for other transport corridors
According to its internal information, UTLC ERA, a joint venture of Russian, Kazakhstan and Belarusian railways, will have transported over 80% of all cargo volumes on the wide gauge track of the New Silk Road by 2021. By mid-November, the company’s Europe – China and China – Europe traffic was 573,900 TEUs. The 2021 target is 675,000 TEUs. The same indicator in 2020 was 547,000 TEUs.
“Every year, we transport more and more goods in Eurasia,” Grom says. “Our company is now in many ways a benchmark for other transport corridors which use the technologies we have already implemented. On the one hand, it is related to train length, capacity utilization and double cargo operations on the border infrastructure, which saves a lot of time. On the other hand, it is about the development of transport corridors to diversify traffic flows and maintain a sufficient safety margin for future growth.”
The total value of goods transported by UTLC ERA services in 2020 was $31.5 billion. According to Alexey Grom, it will grow to $45 billion in 2021 and will make up 5.5% of the total Europe – China trade value. The most important goods transported from the East to the West include electronic and engineering products and car spare parts. In addition, the New Silk Road route is increasingly used to transport mass-produced goods, such as plastic parts, wooden, textile, optical and rubber products, as well as top-of-the-range products to the West.
Since the growing rail traffic between Europe and China currently makes up just over 3% of the total cargo traffic, it will increasingly complement the sea freight. The total container traffic between Europe and Asia by sea, air and rail is estimated at approximately 24 million TEUs.
The trends associated with the growth of rail container traffic have made it obvious that the efforts should be focused on debottlenecking at the border crossing points and diversifying cargo traffic rather than on increasing the train speed. Alexey Grom: “I would like once again to emphasize the significance of coordinated efforts among all traffic participants to improve the traffic process and to make the transit corridors more competitive, both in the 1,520 mm region and in the adjacent sectors with the 1,435 mm gauge track, in order to meet customer expectations as to high and full load of the rail network. If we currently had all required capacities on the European and Kazakhstan borders, it could add 20% to the total container traffic volume.”
More container transshipment operations in Kaliningrad
Last week, UTLC ERA signed a cooperation agreement with the Kaliningrad railway and the ports in Kaliningrad Oblast concerning the container traffic arrangements on the China – Europe – China routes. The agreement envisages guaranteed acceptance of the declared container trains, as well as timely and comprehensive handling operations, provided that at least 190,000 TEUs of additional traffic flow will be attracted to the region in 2022.
According to Alexey Grom, the route via the city of Kaliningrad, the Russian exclave situated on the Baltic shore between Poland and Lithuania, has a very high potential. UTLC ERA first container unit trains ran on this route as early as in 2018. A high traffic volume that has since been observed in the region is largely contributing to the transport infrastructure development. For example, the new East-West transport and logistics center was opened in Chernyakhovsk on October 1, 2021. The new rail terminal increases the annual customs clearance capacity up to 450,000 TEUs.
In general, Kaliningrad Oblast has beneficial transport connections with a well-developed rail, road and sea infrastructure. Transit services via this region have a large growth potential, as they can make use of both the land border crossings and the multimodal connection points through the Baltic Sea ports. They offer quick access to many European countries and regions: North Europe, Scandinavia, Great Britain and France, as well as Central and South Europe, e.g. Hungary, Czech Republic and Slovakia. A number of containers have already been sent by sea from Kaliningrad to the US within the framework of UTLC ERA multimodal services.
“In terms of traffic prices, transit time or technologies, Kaliningrad Oblast has become more competitive for European, South Asian and Chinese customers,” Grom says. “We expect our traffic through Kaliningrad Oblast to potentially exceed 120,000 TEUs.”
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