Railways Expanding New Silk Road Transport Capacities
By: Robert Przybylski
Almost one million TEUs will be transported by rail on the New Silk Road this year, which is still not the limit for the rail carriers and infrastructure.
“Today, our carrying capacities are experiencing a relatively high load. We need to continuously improve the traffic process and raise the rail route competitiveness. If we currently had all required capacities on the European and Kazakhstan borders, it could add 20% to the total container traffic volume,” says Alexey Grom, General Director of United Transport and Logistics Company – Eurasian Rail Alliance JSC (UTLC ERA), the largest carrier on the New Silk Road.
New transshipment terminals
UTLC ERA accounts for 80% of the total rail cargo traffic market between Europe and China. In 2021, the company expects to transport 675,000 TEUs (as compared to 547,000 TEUs transported in 2020). The total value of all cargoes to be transported by UTLC ERA may approach $45 billion next year, or 5% of the total Europe – China trade value. This year, this amount will exceed $31.5 billion.
In physical terms, the railway traffic between Europe and China makes up just over 3% of the total traffic on this route. The container turnover between Europe and Asia is estimated at approximately 24 million TEUs. However, Vladislav Martin, Head of the Railway Department for EU and China at AsstrA-Associated Traffic, considers the border situation to be unstable: “The total transit time varies greatly, and while transport companies claim that transit takes 14 days, the actual situation may be different. The transportation time was sometimes extended to 60 days. The Polish side decided which trains should pass first and which should follow. Some trains stayed at Belarusian stations for 30 to 40 days pending permission to cross the border to Poland. This is yet another proof that there are too many bottlenecks in logistics, especially on the railway routes to and from China,” Martin says.
The CEO of UTLC ERA, in his turn, notes that the railways are expanding their capacity. Alexey Grom thinks this task is addressed very effectively on the Kazakhstan – China border, much better than elsewhere: there are two state terminals at the Altynkol and Dostyk stations.
In the past two years, private investor projects also gained momentum. In 2021, UTLC ERA began cooperating with a new private transit terminal, Dostyk Trans Terminal (DTT), which can add at least half a million containers to the volume of cross-border operations for UTLC ERA in the next 2 to 3 years. On the Kazakhstan border, UTLC ERA will close out the year with 100,000 to 120,000 TEUs on private terminals and about 70,000 TEUs on DTT.
The new Dostyk Trans Terminal (DTT) with a design capacity of 700,000 TEUs was opened in early June on the China – Kazakhstan border. The terminal in Małaszewicze, Poland, is undergoing renovation.
On August 20, the Memorandum on Facilitating Sustainable Development of Transit Potential and Environmental Safety of Rail Transport in Member States of the Eurasian Economic Union (EAEU) was signed at the meeting of the Eurasian Intergovernmental Council. Under this arrangement, UTLC ERA acts as a pilot company to build an ecosystem of EAEU digital transport corridors and to implement the Unified Customs Transit System. Pilot projects with the participation of UTLC ERA are also scheduled so as to implement digital solutions and to test effective IT innovations and technologies.
For instance, a trial batch of empty fitting platforms was dispatched based on an e-waybill only in UTLC ERA services in November. The train was bound from Brest to Dostyk/Altynkol. This pilot project was the first step towards transition to a fully digital transit waybill format to transport cargoes in the EAEU member countries and, in the long run, on the entire China – Europe – China route.
“We have spent much time to develop this area, and today we are the benchmark for others. Many of them now apply the technologies that we pioneered in respect of the train length, capacity utilization and double cargo operations on the border infrastructure that save a lot of time, or in respect of developing additional directions to diversify traffic flows and maintain a sufficient safety margin for future growth,” Alexey Grom says.
Rzeczpolspolita is the largest Polish daily newspaper that covers politics, economy and finance. It is published in online and printed versions.