III КВАРТАЛ 2022Г. - 55 баллов
163.03513118963 monthAccess: 1
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Alexey Mironov, Head of RZD Central Traffic Directorate speaks about the new logistics approaches to rolling stock management.
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[DETAIL_TEXT] => Movement of Empty Wagons Should Be Clearly Planned
– Mr Mironov, what is being done to improve the efficiency of the wagon fleet in general? How will transport process management be structured in the conditions of an entirely private park?
– Creating a competitive freight market and starting The Second Cargo Company poses a key organisational challenge in terms of managing the transportation process effectively in the new conditions. Despite the upcoming changes, RZD will continue implementing the functions of a public carrier. Regardless of the type of wagon ownership, it is both a network carrier and infrastructure owner, therefore it will keep a number of fleet management functions. RZD continues to fully control such indicators as wagon circulation elements; technical and sector speeds; idling at the stations; optimising laden journey by means of planning loading and train schedules; and technical standardisation of operational work. The operator functions are: to provide shippers with rolling stock, to organise unladen journeys rationally by working out transport logistical schemes, to prevent long-term parking of empty wagons on station tracks waiting for cargo, and to reduce all types of idle time on tracks in front of enterprises.
The principles of rolling stock management have been systematically examined at various levels over recent years. Concrete proposals for changes in the freight regulatory and tariff framework have been worked out with the participation of representatives of the NP The Council of Railway Rolling Stock Operator Service Market.
The basic Principles of Traffic Management in a Fully Private Freight Wagon Fleet have been adopted in RZD, as well as a Single Railway Transport Network Process, which is, in fact, the first major regulation that consolidates all elements of the transportation process, including both planning and implementation of what was planned.
The most significant changes will take place in the technology of operating empty wagons. In this regard, we have developed Draft Rules to Transport Empty Wagons Which Do Not Belong to the Carrier. It implies that such wagons should be taken for transportation with consideration of throughput, loading capacities and demand for rolling stock in the places of loading. Moving empty wagons should be planned thoroughly. If too many wagons are available after unloading, in such a way that they may affect the transport process, the infrastructure owner must be able to move empty private wagons to the stations of their registration or to stations for technological idling.
Avoiding Rate Fractures
– Transportation technologies are also affected by tariffs for empty runs. What is to be changed in this respect?
– The tariff level should be cost-effective and stimulate optimisation of empty runs and using rolling stock for drive-by loading. The management system for private fleets has to resemble general methods of control, therefore it is extremely important to answer the question of how to avoid price rate fracture when destination stations for empty wagons are changed. The completely privatised wagon fleet and long distances make it necessary to focus on such a technology when empty wagons are to be moved in impersonal flows to railways of mass loading, to be distributed there according to shippers’ requests for specific stations and based on the goal of reducing empty runs, as well as on the technical and commercial suitability of the rolling stock. Today, the solution to this problem is being stifled by the current system of empty run tariffs, which works on the same principle as freight tariffs: the smaller distance, the larger fare. In order to solve the problem of empty wagon flow optimisation, an opposite approach could be more suitable, which would help to reduce the number of wasteful empty journeys.
Current tariffs make it unprofitable for operators to organise movement of empty wagons following the requirements for efficiency in the transportation process. It means that they send them neither to major stations of the destination railroad nor to stations of loading, because otherwise empty run costs grow considerably. Therefore, operator companies try to avoid this rate fracture completely by doing as little re-direction in the marshalling yards as possible, and transferring them to areas of loading.
An unacceptable situation in terms of operational work has been created as a result, when, for example, thousands of wagons are passing large marshalling yards such as Vkhodnaya, Inskaya and Krasnoyarsk-Eastern and moving to loading stations of the Kuzbass, which has a limited throughput.
Of course, it is difficult to provide customers with wagons in matching quantities when empty wagons are travelling for five to seven days, meanwhile combined shipment orders are changing, and the technical state of the fleet leads to amendments too. Wagons unclaimed at the loading points are either delivered to nearby stations or idle waiting for requests. Meanwhile, distances between coal-loading stations are small. It is advantageous for operators to change the destination of empty gondola wagons in the Kuzbass itself, so, very often they do not care about the situation across the network.
– Where do you think is the best starting point to test new technologies?
– Coal is the most socially significant cargo. This is why it makes sense to start testing private rolling stock control systems trying a special procedure for sending empty gondola wagons to coal-loading railways. Here it is necessary to avoid any technological risks connected with possible multiple changes of destination stations by many customers, increase shunting or putting an additional burden on the infrastructure.
This requires a number of significant changes in the basic regulatory and tariff documentation of freight transportation, such as:
1. Fares for carriage of empty private wagons should be based on the final distance traveled. If destination station is changed during the journey, the calculation of the freight payment should be made without rate fracture (from the departure station straight to the destination station rather than from the departure station to the destination station via the station of re-direction).
2. It is expected that tariff rate fractures will be avoided also in cases where destination stations are changed during the journeys of private gondola wagons to coal loading points.
3. In order to avoid too many changes of destination during the journeys for the sake of protecting operators’ interests, this event is only allowed on the coal-loading railroad and not more than once per empty run.
4. The list of stations where this procedure can take place is to be determined by the carrier in agreement with the infrastructure owner. Marshalling yards in the areas where a lot of coal is loaded can become such points for this special procedure of changing destination stations.
5. It is necessary to make sure that when such technology is applied, empty private wagons must be moved following electronic shipment documentation, otherwise costs will be too high for starting and finishing operations after changing destination point for wagons.
6. It makes sense to calculate and collect freight charges for empty private gondola wagon trips at the destination stations of coal-loading roads.
7. It would be useful if both regulatory and tariff bases include a stated opportunity to create multiple technical routes for the empty wagons of carriers. So far, such a rule can only be used for empty wagons going to destinations established by shippers. Generally, it is difficult to apply the route multiplication method in all cases of empty wagon flows. The area of its application spans just a few directions from points of mass unloading, those where it is technically possible to organise these kinds of routes.
All the above-mentioned changes in freight transport’s basic regulatory and tariff documentation will allow for sending non-personalised empty gondola wagons to large marshalling yards in areas of mass loading, where they are to be distributed to closest stations with high accuracy and minimal effort. This will considerably reduce the costs incurred by the transport sector due to large operation of empty wagons, their idling and counter-movement.
It should be mentioned that carriers will not lose anything in terms of shipment fares when the new system starts, because when empty gondola wagons are re-addressed at stations now, it is currently being done without breaking tariffs.
Time to Manage Infrastructure Rationally
– What improvements are needed in other areas in order for the network to handle the load better?
– Another important development concerns the introduction of modern information technologies to manage rolling stock. But this is a topic for another discussion. The directorate is ready to interact with the operating companies organising technical routing both for laden and empty wagon flows, even in cases where there is a high proportion of wagons loaded for various destinations.
Serious attention is being paid to the improvement of unified transport technology in the 1520 mm gauge area, where the proportion of private wagons is growing. For this reason, it is necessary to work out economically advantageous conditions for the use of the rolling stock of various forms of ownership, which requires changes in the normative documentation of the CIS, Latvia, Lithuania and Estonia.
Following the decisions taken in May 2009 during the 50th Meeting of the Council for the Railway Transport of the CIS Countries, a commission for reform and restructuring was created, which included representatives of railway administrations. It prepared a draft Concept for Managing the Shared Wagon Fleet, which was adopted as the basis during the 52th Council Meeting in May; and it was decided to create a Unified System of Cargo Wagon Fleets of Various Forms of Ownership on July 1st and 2nd in Kiev, following a round table on the operation of freight wagons of various forms of ownership in the new conditions. This will preserve the unique experience of the CIS and Baltic States railways on the principles of common technology, and ensure efficient use of rolling stock.
The most important issue is providing the compliance of infrastructure with the technological requirements of the private wagon fleet. In 2010, the quantity of rolling stock started to grow again. Holding companies and owners purchased more than 36,000 new freight wagons. This exceeds the figures for both 2009 (18,000 wagons per year) and 2008 (32,000). The rapid growth of the fleet creates an additional burden on throughput and pulling resources, therefore, rational use of infrastructure and increasing the pace of its renovation and development are becoming most important in the new conditions. First and foremost, this requires active support by the government and private business.
Currently, this issue is the most urgent for the railways in the east of the country, where the throughput and carrying capacity was considerably reduced in the main areas during the transport recession of the late 1990’s. The unprecedented growth in loading for the ports of the Far East and for the Eastern range (including BAM) requires strengthening of infrastructure. Considering inevitable market fluctuations and the trends of freight traffic, the Urals, North-West and South of Russia will require larger throughput as well. Also, new approaches to the development and placing of marshalling yards will be needed. This is due to additional demand for station track capacity when routes and special areas for empty wagons are figured out.
In order to make RZD’s work more effectively in the conditions of a totally private fleet, it is necessary to achieve the following:
• strictly adhere to such planning principles in loading as 10 days for domestic traffic and 15 days for exports;
• provide reliable planning of loading both in terms of volume and destination, replacing forecasting with real shippers’ requests. This is the basis for the policy to schedule the repair of infrastructure;
• organisation of empty private rolling stock movement for all owners and operators on the principle of applications for shipment;
• rapid improvements in technical routing and dispatching, in terms of reducing overtime at stations within the whole wagon run circle, in order to manage the marshalling network capacity rationally, and to reduce delivery time.
And finally, it is necessary to make some amendments to the Law “About the Railway Transport in the Russian Federation” and to the Charter, which would reflect the actual current structure of the freight market; also, it is necessary to adopt the RF Government’s Statement “About the Bases for Legal Regulation of Operator Activities” and to approve the list of criteria for technical and technological facilities, because the absence of the such documents gives grounds to the carrier and the infrastructure owner to refuse shipping applications. And, as mentioned before, the tariff system is to be improved, including in terms of the empty running of private wagons. Consolidated efforts are to be made by all interested parties, such as RZD, government authorities, cargo owners, operators and rolling stock owners.
Interviewed by Andrey Lazarev
[~DETAIL_TEXT] => Movement of Empty Wagons Should Be Clearly Planned
– Mr Mironov, what is being done to improve the efficiency of the wagon fleet in general? How will transport process management be structured in the conditions of an entirely private park?
– Creating a competitive freight market and starting The Second Cargo Company poses a key organisational challenge in terms of managing the transportation process effectively in the new conditions. Despite the upcoming changes, RZD will continue implementing the functions of a public carrier. Regardless of the type of wagon ownership, it is both a network carrier and infrastructure owner, therefore it will keep a number of fleet management functions. RZD continues to fully control such indicators as wagon circulation elements; technical and sector speeds; idling at the stations; optimising laden journey by means of planning loading and train schedules; and technical standardisation of operational work. The operator functions are: to provide shippers with rolling stock, to organise unladen journeys rationally by working out transport logistical schemes, to prevent long-term parking of empty wagons on station tracks waiting for cargo, and to reduce all types of idle time on tracks in front of enterprises.
The principles of rolling stock management have been systematically examined at various levels over recent years. Concrete proposals for changes in the freight regulatory and tariff framework have been worked out with the participation of representatives of the NP The Council of Railway Rolling Stock Operator Service Market.
The basic Principles of Traffic Management in a Fully Private Freight Wagon Fleet have been adopted in RZD, as well as a Single Railway Transport Network Process, which is, in fact, the first major regulation that consolidates all elements of the transportation process, including both planning and implementation of what was planned.
The most significant changes will take place in the technology of operating empty wagons. In this regard, we have developed Draft Rules to Transport Empty Wagons Which Do Not Belong to the Carrier. It implies that such wagons should be taken for transportation with consideration of throughput, loading capacities and demand for rolling stock in the places of loading. Moving empty wagons should be planned thoroughly. If too many wagons are available after unloading, in such a way that they may affect the transport process, the infrastructure owner must be able to move empty private wagons to the stations of their registration or to stations for technological idling.
Avoiding Rate Fractures
– Transportation technologies are also affected by tariffs for empty runs. What is to be changed in this respect?
– The tariff level should be cost-effective and stimulate optimisation of empty runs and using rolling stock for drive-by loading. The management system for private fleets has to resemble general methods of control, therefore it is extremely important to answer the question of how to avoid price rate fracture when destination stations for empty wagons are changed. The completely privatised wagon fleet and long distances make it necessary to focus on such a technology when empty wagons are to be moved in impersonal flows to railways of mass loading, to be distributed there according to shippers’ requests for specific stations and based on the goal of reducing empty runs, as well as on the technical and commercial suitability of the rolling stock. Today, the solution to this problem is being stifled by the current system of empty run tariffs, which works on the same principle as freight tariffs: the smaller distance, the larger fare. In order to solve the problem of empty wagon flow optimisation, an opposite approach could be more suitable, which would help to reduce the number of wasteful empty journeys.
Current tariffs make it unprofitable for operators to organise movement of empty wagons following the requirements for efficiency in the transportation process. It means that they send them neither to major stations of the destination railroad nor to stations of loading, because otherwise empty run costs grow considerably. Therefore, operator companies try to avoid this rate fracture completely by doing as little re-direction in the marshalling yards as possible, and transferring them to areas of loading.
An unacceptable situation in terms of operational work has been created as a result, when, for example, thousands of wagons are passing large marshalling yards such as Vkhodnaya, Inskaya and Krasnoyarsk-Eastern and moving to loading stations of the Kuzbass, which has a limited throughput.
Of course, it is difficult to provide customers with wagons in matching quantities when empty wagons are travelling for five to seven days, meanwhile combined shipment orders are changing, and the technical state of the fleet leads to amendments too. Wagons unclaimed at the loading points are either delivered to nearby stations or idle waiting for requests. Meanwhile, distances between coal-loading stations are small. It is advantageous for operators to change the destination of empty gondola wagons in the Kuzbass itself, so, very often they do not care about the situation across the network.
– Where do you think is the best starting point to test new technologies?
– Coal is the most socially significant cargo. This is why it makes sense to start testing private rolling stock control systems trying a special procedure for sending empty gondola wagons to coal-loading railways. Here it is necessary to avoid any technological risks connected with possible multiple changes of destination stations by many customers, increase shunting or putting an additional burden on the infrastructure.
This requires a number of significant changes in the basic regulatory and tariff documentation of freight transportation, such as:
1. Fares for carriage of empty private wagons should be based on the final distance traveled. If destination station is changed during the journey, the calculation of the freight payment should be made without rate fracture (from the departure station straight to the destination station rather than from the departure station to the destination station via the station of re-direction).
2. It is expected that tariff rate fractures will be avoided also in cases where destination stations are changed during the journeys of private gondola wagons to coal loading points.
3. In order to avoid too many changes of destination during the journeys for the sake of protecting operators’ interests, this event is only allowed on the coal-loading railroad and not more than once per empty run.
4. The list of stations where this procedure can take place is to be determined by the carrier in agreement with the infrastructure owner. Marshalling yards in the areas where a lot of coal is loaded can become such points for this special procedure of changing destination stations.
5. It is necessary to make sure that when such technology is applied, empty private wagons must be moved following electronic shipment documentation, otherwise costs will be too high for starting and finishing operations after changing destination point for wagons.
6. It makes sense to calculate and collect freight charges for empty private gondola wagon trips at the destination stations of coal-loading roads.
7. It would be useful if both regulatory and tariff bases include a stated opportunity to create multiple technical routes for the empty wagons of carriers. So far, such a rule can only be used for empty wagons going to destinations established by shippers. Generally, it is difficult to apply the route multiplication method in all cases of empty wagon flows. The area of its application spans just a few directions from points of mass unloading, those where it is technically possible to organise these kinds of routes.
All the above-mentioned changes in freight transport’s basic regulatory and tariff documentation will allow for sending non-personalised empty gondola wagons to large marshalling yards in areas of mass loading, where they are to be distributed to closest stations with high accuracy and minimal effort. This will considerably reduce the costs incurred by the transport sector due to large operation of empty wagons, their idling and counter-movement.
It should be mentioned that carriers will not lose anything in terms of shipment fares when the new system starts, because when empty gondola wagons are re-addressed at stations now, it is currently being done without breaking tariffs.
Time to Manage Infrastructure Rationally
– What improvements are needed in other areas in order for the network to handle the load better?
– Another important development concerns the introduction of modern information technologies to manage rolling stock. But this is a topic for another discussion. The directorate is ready to interact with the operating companies organising technical routing both for laden and empty wagon flows, even in cases where there is a high proportion of wagons loaded for various destinations.
Serious attention is being paid to the improvement of unified transport technology in the 1520 mm gauge area, where the proportion of private wagons is growing. For this reason, it is necessary to work out economically advantageous conditions for the use of the rolling stock of various forms of ownership, which requires changes in the normative documentation of the CIS, Latvia, Lithuania and Estonia.
Following the decisions taken in May 2009 during the 50th Meeting of the Council for the Railway Transport of the CIS Countries, a commission for reform and restructuring was created, which included representatives of railway administrations. It prepared a draft Concept for Managing the Shared Wagon Fleet, which was adopted as the basis during the 52th Council Meeting in May; and it was decided to create a Unified System of Cargo Wagon Fleets of Various Forms of Ownership on July 1st and 2nd in Kiev, following a round table on the operation of freight wagons of various forms of ownership in the new conditions. This will preserve the unique experience of the CIS and Baltic States railways on the principles of common technology, and ensure efficient use of rolling stock.
The most important issue is providing the compliance of infrastructure with the technological requirements of the private wagon fleet. In 2010, the quantity of rolling stock started to grow again. Holding companies and owners purchased more than 36,000 new freight wagons. This exceeds the figures for both 2009 (18,000 wagons per year) and 2008 (32,000). The rapid growth of the fleet creates an additional burden on throughput and pulling resources, therefore, rational use of infrastructure and increasing the pace of its renovation and development are becoming most important in the new conditions. First and foremost, this requires active support by the government and private business.
Currently, this issue is the most urgent for the railways in the east of the country, where the throughput and carrying capacity was considerably reduced in the main areas during the transport recession of the late 1990’s. The unprecedented growth in loading for the ports of the Far East and for the Eastern range (including BAM) requires strengthening of infrastructure. Considering inevitable market fluctuations and the trends of freight traffic, the Urals, North-West and South of Russia will require larger throughput as well. Also, new approaches to the development and placing of marshalling yards will be needed. This is due to additional demand for station track capacity when routes and special areas for empty wagons are figured out.
In order to make RZD’s work more effectively in the conditions of a totally private fleet, it is necessary to achieve the following:
• strictly adhere to such planning principles in loading as 10 days for domestic traffic and 15 days for exports;
• provide reliable planning of loading both in terms of volume and destination, replacing forecasting with real shippers’ requests. This is the basis for the policy to schedule the repair of infrastructure;
• organisation of empty private rolling stock movement for all owners and operators on the principle of applications for shipment;
• rapid improvements in technical routing and dispatching, in terms of reducing overtime at stations within the whole wagon run circle, in order to manage the marshalling network capacity rationally, and to reduce delivery time.
And finally, it is necessary to make some amendments to the Law “About the Railway Transport in the Russian Federation” and to the Charter, which would reflect the actual current structure of the freight market; also, it is necessary to adopt the RF Government’s Statement “About the Bases for Legal Regulation of Operator Activities” and to approve the list of criteria for technical and technological facilities, because the absence of the such documents gives grounds to the carrier and the infrastructure owner to refuse shipping applications. And, as mentioned before, the tariff system is to be improved, including in terms of the empty running of private wagons. Consolidated efforts are to be made by all interested parties, such as RZD, government authorities, cargo owners, operators and rolling stock owners.
Interviewed by Andrey Lazarev
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[DETAIL_TEXT] => Movement of Empty Wagons Should Be Clearly Planned
– Mr Mironov, what is being done to improve the efficiency of the wagon fleet in general? How will transport process management be structured in the conditions of an entirely private park?
– Creating a competitive freight market and starting The Second Cargo Company poses a key organisational challenge in terms of managing the transportation process effectively in the new conditions. Despite the upcoming changes, RZD will continue implementing the functions of a public carrier. Regardless of the type of wagon ownership, it is both a network carrier and infrastructure owner, therefore it will keep a number of fleet management functions. RZD continues to fully control such indicators as wagon circulation elements; technical and sector speeds; idling at the stations; optimising laden journey by means of planning loading and train schedules; and technical standardisation of operational work. The operator functions are: to provide shippers with rolling stock, to organise unladen journeys rationally by working out transport logistical schemes, to prevent long-term parking of empty wagons on station tracks waiting for cargo, and to reduce all types of idle time on tracks in front of enterprises.
The principles of rolling stock management have been systematically examined at various levels over recent years. Concrete proposals for changes in the freight regulatory and tariff framework have been worked out with the participation of representatives of the NP The Council of Railway Rolling Stock Operator Service Market.
The basic Principles of Traffic Management in a Fully Private Freight Wagon Fleet have been adopted in RZD, as well as a Single Railway Transport Network Process, which is, in fact, the first major regulation that consolidates all elements of the transportation process, including both planning and implementation of what was planned.
The most significant changes will take place in the technology of operating empty wagons. In this regard, we have developed Draft Rules to Transport Empty Wagons Which Do Not Belong to the Carrier. It implies that such wagons should be taken for transportation with consideration of throughput, loading capacities and demand for rolling stock in the places of loading. Moving empty wagons should be planned thoroughly. If too many wagons are available after unloading, in such a way that they may affect the transport process, the infrastructure owner must be able to move empty private wagons to the stations of their registration or to stations for technological idling.
Avoiding Rate Fractures
– Transportation technologies are also affected by tariffs for empty runs. What is to be changed in this respect?
– The tariff level should be cost-effective and stimulate optimisation of empty runs and using rolling stock for drive-by loading. The management system for private fleets has to resemble general methods of control, therefore it is extremely important to answer the question of how to avoid price rate fracture when destination stations for empty wagons are changed. The completely privatised wagon fleet and long distances make it necessary to focus on such a technology when empty wagons are to be moved in impersonal flows to railways of mass loading, to be distributed there according to shippers’ requests for specific stations and based on the goal of reducing empty runs, as well as on the technical and commercial suitability of the rolling stock. Today, the solution to this problem is being stifled by the current system of empty run tariffs, which works on the same principle as freight tariffs: the smaller distance, the larger fare. In order to solve the problem of empty wagon flow optimisation, an opposite approach could be more suitable, which would help to reduce the number of wasteful empty journeys.
Current tariffs make it unprofitable for operators to organise movement of empty wagons following the requirements for efficiency in the transportation process. It means that they send them neither to major stations of the destination railroad nor to stations of loading, because otherwise empty run costs grow considerably. Therefore, operator companies try to avoid this rate fracture completely by doing as little re-direction in the marshalling yards as possible, and transferring them to areas of loading.
An unacceptable situation in terms of operational work has been created as a result, when, for example, thousands of wagons are passing large marshalling yards such as Vkhodnaya, Inskaya and Krasnoyarsk-Eastern and moving to loading stations of the Kuzbass, which has a limited throughput.
Of course, it is difficult to provide customers with wagons in matching quantities when empty wagons are travelling for five to seven days, meanwhile combined shipment orders are changing, and the technical state of the fleet leads to amendments too. Wagons unclaimed at the loading points are either delivered to nearby stations or idle waiting for requests. Meanwhile, distances between coal-loading stations are small. It is advantageous for operators to change the destination of empty gondola wagons in the Kuzbass itself, so, very often they do not care about the situation across the network.
– Where do you think is the best starting point to test new technologies?
– Coal is the most socially significant cargo. This is why it makes sense to start testing private rolling stock control systems trying a special procedure for sending empty gondola wagons to coal-loading railways. Here it is necessary to avoid any technological risks connected with possible multiple changes of destination stations by many customers, increase shunting or putting an additional burden on the infrastructure.
This requires a number of significant changes in the basic regulatory and tariff documentation of freight transportation, such as:
1. Fares for carriage of empty private wagons should be based on the final distance traveled. If destination station is changed during the journey, the calculation of the freight payment should be made without rate fracture (from the departure station straight to the destination station rather than from the departure station to the destination station via the station of re-direction).
2. It is expected that tariff rate fractures will be avoided also in cases where destination stations are changed during the journeys of private gondola wagons to coal loading points.
3. In order to avoid too many changes of destination during the journeys for the sake of protecting operators’ interests, this event is only allowed on the coal-loading railroad and not more than once per empty run.
4. The list of stations where this procedure can take place is to be determined by the carrier in agreement with the infrastructure owner. Marshalling yards in the areas where a lot of coal is loaded can become such points for this special procedure of changing destination stations.
5. It is necessary to make sure that when such technology is applied, empty private wagons must be moved following electronic shipment documentation, otherwise costs will be too high for starting and finishing operations after changing destination point for wagons.
6. It makes sense to calculate and collect freight charges for empty private gondola wagon trips at the destination stations of coal-loading roads.
7. It would be useful if both regulatory and tariff bases include a stated opportunity to create multiple technical routes for the empty wagons of carriers. So far, such a rule can only be used for empty wagons going to destinations established by shippers. Generally, it is difficult to apply the route multiplication method in all cases of empty wagon flows. The area of its application spans just a few directions from points of mass unloading, those where it is technically possible to organise these kinds of routes.
All the above-mentioned changes in freight transport’s basic regulatory and tariff documentation will allow for sending non-personalised empty gondola wagons to large marshalling yards in areas of mass loading, where they are to be distributed to closest stations with high accuracy and minimal effort. This will considerably reduce the costs incurred by the transport sector due to large operation of empty wagons, their idling and counter-movement.
It should be mentioned that carriers will not lose anything in terms of shipment fares when the new system starts, because when empty gondola wagons are re-addressed at stations now, it is currently being done without breaking tariffs.
Time to Manage Infrastructure Rationally
– What improvements are needed in other areas in order for the network to handle the load better?
– Another important development concerns the introduction of modern information technologies to manage rolling stock. But this is a topic for another discussion. The directorate is ready to interact with the operating companies organising technical routing both for laden and empty wagon flows, even in cases where there is a high proportion of wagons loaded for various destinations.
Serious attention is being paid to the improvement of unified transport technology in the 1520 mm gauge area, where the proportion of private wagons is growing. For this reason, it is necessary to work out economically advantageous conditions for the use of the rolling stock of various forms of ownership, which requires changes in the normative documentation of the CIS, Latvia, Lithuania and Estonia.
Following the decisions taken in May 2009 during the 50th Meeting of the Council for the Railway Transport of the CIS Countries, a commission for reform and restructuring was created, which included representatives of railway administrations. It prepared a draft Concept for Managing the Shared Wagon Fleet, which was adopted as the basis during the 52th Council Meeting in May; and it was decided to create a Unified System of Cargo Wagon Fleets of Various Forms of Ownership on July 1st and 2nd in Kiev, following a round table on the operation of freight wagons of various forms of ownership in the new conditions. This will preserve the unique experience of the CIS and Baltic States railways on the principles of common technology, and ensure efficient use of rolling stock.
The most important issue is providing the compliance of infrastructure with the technological requirements of the private wagon fleet. In 2010, the quantity of rolling stock started to grow again. Holding companies and owners purchased more than 36,000 new freight wagons. This exceeds the figures for both 2009 (18,000 wagons per year) and 2008 (32,000). The rapid growth of the fleet creates an additional burden on throughput and pulling resources, therefore, rational use of infrastructure and increasing the pace of its renovation and development are becoming most important in the new conditions. First and foremost, this requires active support by the government and private business.
Currently, this issue is the most urgent for the railways in the east of the country, where the throughput and carrying capacity was considerably reduced in the main areas during the transport recession of the late 1990’s. The unprecedented growth in loading for the ports of the Far East and for the Eastern range (including BAM) requires strengthening of infrastructure. Considering inevitable market fluctuations and the trends of freight traffic, the Urals, North-West and South of Russia will require larger throughput as well. Also, new approaches to the development and placing of marshalling yards will be needed. This is due to additional demand for station track capacity when routes and special areas for empty wagons are figured out.
In order to make RZD’s work more effectively in the conditions of a totally private fleet, it is necessary to achieve the following:
• strictly adhere to such planning principles in loading as 10 days for domestic traffic and 15 days for exports;
• provide reliable planning of loading both in terms of volume and destination, replacing forecasting with real shippers’ requests. This is the basis for the policy to schedule the repair of infrastructure;
• organisation of empty private rolling stock movement for all owners and operators on the principle of applications for shipment;
• rapid improvements in technical routing and dispatching, in terms of reducing overtime at stations within the whole wagon run circle, in order to manage the marshalling network capacity rationally, and to reduce delivery time.
And finally, it is necessary to make some amendments to the Law “About the Railway Transport in the Russian Federation” and to the Charter, which would reflect the actual current structure of the freight market; also, it is necessary to adopt the RF Government’s Statement “About the Bases for Legal Regulation of Operator Activities” and to approve the list of criteria for technical and technological facilities, because the absence of the such documents gives grounds to the carrier and the infrastructure owner to refuse shipping applications. And, as mentioned before, the tariff system is to be improved, including in terms of the empty running of private wagons. Consolidated efforts are to be made by all interested parties, such as RZD, government authorities, cargo owners, operators and rolling stock owners.
Interviewed by Andrey Lazarev
[~DETAIL_TEXT] => Movement of Empty Wagons Should Be Clearly Planned
– Mr Mironov, what is being done to improve the efficiency of the wagon fleet in general? How will transport process management be structured in the conditions of an entirely private park?
– Creating a competitive freight market and starting The Second Cargo Company poses a key organisational challenge in terms of managing the transportation process effectively in the new conditions. Despite the upcoming changes, RZD will continue implementing the functions of a public carrier. Regardless of the type of wagon ownership, it is both a network carrier and infrastructure owner, therefore it will keep a number of fleet management functions. RZD continues to fully control such indicators as wagon circulation elements; technical and sector speeds; idling at the stations; optimising laden journey by means of planning loading and train schedules; and technical standardisation of operational work. The operator functions are: to provide shippers with rolling stock, to organise unladen journeys rationally by working out transport logistical schemes, to prevent long-term parking of empty wagons on station tracks waiting for cargo, and to reduce all types of idle time on tracks in front of enterprises.
The principles of rolling stock management have been systematically examined at various levels over recent years. Concrete proposals for changes in the freight regulatory and tariff framework have been worked out with the participation of representatives of the NP The Council of Railway Rolling Stock Operator Service Market.
The basic Principles of Traffic Management in a Fully Private Freight Wagon Fleet have been adopted in RZD, as well as a Single Railway Transport Network Process, which is, in fact, the first major regulation that consolidates all elements of the transportation process, including both planning and implementation of what was planned.
The most significant changes will take place in the technology of operating empty wagons. In this regard, we have developed Draft Rules to Transport Empty Wagons Which Do Not Belong to the Carrier. It implies that such wagons should be taken for transportation with consideration of throughput, loading capacities and demand for rolling stock in the places of loading. Moving empty wagons should be planned thoroughly. If too many wagons are available after unloading, in such a way that they may affect the transport process, the infrastructure owner must be able to move empty private wagons to the stations of their registration or to stations for technological idling.
Avoiding Rate Fractures
– Transportation technologies are also affected by tariffs for empty runs. What is to be changed in this respect?
– The tariff level should be cost-effective and stimulate optimisation of empty runs and using rolling stock for drive-by loading. The management system for private fleets has to resemble general methods of control, therefore it is extremely important to answer the question of how to avoid price rate fracture when destination stations for empty wagons are changed. The completely privatised wagon fleet and long distances make it necessary to focus on such a technology when empty wagons are to be moved in impersonal flows to railways of mass loading, to be distributed there according to shippers’ requests for specific stations and based on the goal of reducing empty runs, as well as on the technical and commercial suitability of the rolling stock. Today, the solution to this problem is being stifled by the current system of empty run tariffs, which works on the same principle as freight tariffs: the smaller distance, the larger fare. In order to solve the problem of empty wagon flow optimisation, an opposite approach could be more suitable, which would help to reduce the number of wasteful empty journeys.
Current tariffs make it unprofitable for operators to organise movement of empty wagons following the requirements for efficiency in the transportation process. It means that they send them neither to major stations of the destination railroad nor to stations of loading, because otherwise empty run costs grow considerably. Therefore, operator companies try to avoid this rate fracture completely by doing as little re-direction in the marshalling yards as possible, and transferring them to areas of loading.
An unacceptable situation in terms of operational work has been created as a result, when, for example, thousands of wagons are passing large marshalling yards such as Vkhodnaya, Inskaya and Krasnoyarsk-Eastern and moving to loading stations of the Kuzbass, which has a limited throughput.
Of course, it is difficult to provide customers with wagons in matching quantities when empty wagons are travelling for five to seven days, meanwhile combined shipment orders are changing, and the technical state of the fleet leads to amendments too. Wagons unclaimed at the loading points are either delivered to nearby stations or idle waiting for requests. Meanwhile, distances between coal-loading stations are small. It is advantageous for operators to change the destination of empty gondola wagons in the Kuzbass itself, so, very often they do not care about the situation across the network.
– Where do you think is the best starting point to test new technologies?
– Coal is the most socially significant cargo. This is why it makes sense to start testing private rolling stock control systems trying a special procedure for sending empty gondola wagons to coal-loading railways. Here it is necessary to avoid any technological risks connected with possible multiple changes of destination stations by many customers, increase shunting or putting an additional burden on the infrastructure.
This requires a number of significant changes in the basic regulatory and tariff documentation of freight transportation, such as:
1. Fares for carriage of empty private wagons should be based on the final distance traveled. If destination station is changed during the journey, the calculation of the freight payment should be made without rate fracture (from the departure station straight to the destination station rather than from the departure station to the destination station via the station of re-direction).
2. It is expected that tariff rate fractures will be avoided also in cases where destination stations are changed during the journeys of private gondola wagons to coal loading points.
3. In order to avoid too many changes of destination during the journeys for the sake of protecting operators’ interests, this event is only allowed on the coal-loading railroad and not more than once per empty run.
4. The list of stations where this procedure can take place is to be determined by the carrier in agreement with the infrastructure owner. Marshalling yards in the areas where a lot of coal is loaded can become such points for this special procedure of changing destination stations.
5. It is necessary to make sure that when such technology is applied, empty private wagons must be moved following electronic shipment documentation, otherwise costs will be too high for starting and finishing operations after changing destination point for wagons.
6. It makes sense to calculate and collect freight charges for empty private gondola wagon trips at the destination stations of coal-loading roads.
7. It would be useful if both regulatory and tariff bases include a stated opportunity to create multiple technical routes for the empty wagons of carriers. So far, such a rule can only be used for empty wagons going to destinations established by shippers. Generally, it is difficult to apply the route multiplication method in all cases of empty wagon flows. The area of its application spans just a few directions from points of mass unloading, those where it is technically possible to organise these kinds of routes.
All the above-mentioned changes in freight transport’s basic regulatory and tariff documentation will allow for sending non-personalised empty gondola wagons to large marshalling yards in areas of mass loading, where they are to be distributed to closest stations with high accuracy and minimal effort. This will considerably reduce the costs incurred by the transport sector due to large operation of empty wagons, their idling and counter-movement.
It should be mentioned that carriers will not lose anything in terms of shipment fares when the new system starts, because when empty gondola wagons are re-addressed at stations now, it is currently being done without breaking tariffs.
Time to Manage Infrastructure Rationally
– What improvements are needed in other areas in order for the network to handle the load better?
– Another important development concerns the introduction of modern information technologies to manage rolling stock. But this is a topic for another discussion. The directorate is ready to interact with the operating companies organising technical routing both for laden and empty wagon flows, even in cases where there is a high proportion of wagons loaded for various destinations.
Serious attention is being paid to the improvement of unified transport technology in the 1520 mm gauge area, where the proportion of private wagons is growing. For this reason, it is necessary to work out economically advantageous conditions for the use of the rolling stock of various forms of ownership, which requires changes in the normative documentation of the CIS, Latvia, Lithuania and Estonia.
Following the decisions taken in May 2009 during the 50th Meeting of the Council for the Railway Transport of the CIS Countries, a commission for reform and restructuring was created, which included representatives of railway administrations. It prepared a draft Concept for Managing the Shared Wagon Fleet, which was adopted as the basis during the 52th Council Meeting in May; and it was decided to create a Unified System of Cargo Wagon Fleets of Various Forms of Ownership on July 1st and 2nd in Kiev, following a round table on the operation of freight wagons of various forms of ownership in the new conditions. This will preserve the unique experience of the CIS and Baltic States railways on the principles of common technology, and ensure efficient use of rolling stock.
The most important issue is providing the compliance of infrastructure with the technological requirements of the private wagon fleet. In 2010, the quantity of rolling stock started to grow again. Holding companies and owners purchased more than 36,000 new freight wagons. This exceeds the figures for both 2009 (18,000 wagons per year) and 2008 (32,000). The rapid growth of the fleet creates an additional burden on throughput and pulling resources, therefore, rational use of infrastructure and increasing the pace of its renovation and development are becoming most important in the new conditions. First and foremost, this requires active support by the government and private business.
Currently, this issue is the most urgent for the railways in the east of the country, where the throughput and carrying capacity was considerably reduced in the main areas during the transport recession of the late 1990’s. The unprecedented growth in loading for the ports of the Far East and for the Eastern range (including BAM) requires strengthening of infrastructure. Considering inevitable market fluctuations and the trends of freight traffic, the Urals, North-West and South of Russia will require larger throughput as well. Also, new approaches to the development and placing of marshalling yards will be needed. This is due to additional demand for station track capacity when routes and special areas for empty wagons are figured out.
In order to make RZD’s work more effectively in the conditions of a totally private fleet, it is necessary to achieve the following:
• strictly adhere to such planning principles in loading as 10 days for domestic traffic and 15 days for exports;
• provide reliable planning of loading both in terms of volume and destination, replacing forecasting with real shippers’ requests. This is the basis for the policy to schedule the repair of infrastructure;
• organisation of empty private rolling stock movement for all owners and operators on the principle of applications for shipment;
• rapid improvements in technical routing and dispatching, in terms of reducing overtime at stations within the whole wagon run circle, in order to manage the marshalling network capacity rationally, and to reduce delivery time.
And finally, it is necessary to make some amendments to the Law “About the Railway Transport in the Russian Federation” and to the Charter, which would reflect the actual current structure of the freight market; also, it is necessary to adopt the RF Government’s Statement “About the Bases for Legal Regulation of Operator Activities” and to approve the list of criteria for technical and technological facilities, because the absence of the such documents gives grounds to the carrier and the infrastructure owner to refuse shipping applications. And, as mentioned before, the tariff system is to be improved, including in terms of the empty running of private wagons. Consolidated efforts are to be made by all interested parties, such as RZD, government authorities, cargo owners, operators and rolling stock owners.
Interviewed by Andrey Lazarev
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The 38th Session of OSJD Ministers Meeting took place in Prague in June. Here we talk about its results with Tadeus Shozda, Chairman of OSJD Executive Committee.Array
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[DETAIL_TEXT] => looking into the future
– What do you think should be done to facilitate the movement of goods through border stations?
– Simplification of procedures at border crossings on international railway transport routes has long been the OSJD’s focus of attention. This question is included in the agenda of the Commission for Transport Policy and Development Strategy. We have managed to achieve some success in this area.
Thus, the OSJD member countries provide control over the strict observance of the established time for checking passenger trains at border stations. Necessary measures to remove causes of the delays are taken in cases of longer check time, and all the parties promptly receive relevant information.
Also, the leading executive organisation from the Czech Republic has drafted a structure for a compendium of practical experience to simplify border crossings. It envisages main sections, which will be made to generalize the positive experience in this field, and examples will be given of effective solutions to problems. They can be used in the practice of OSJD member countries at border crossings.
Preparation and approval procedures are currently on the draft of Annex 9 to “Facilitation of Border Crossing in International Railway Transport” to the International Convention on the Harmonization of Frontier Controls of Goods (1982).
A Working Group considered the revised text of the draft and forwarded it for approval to the Administrative Committee of the Convention (AK.3), where it was agreed.
Removing barriers for cargoes and passengers was facilitated by a number of OSJD member countries entering the EU in 2004 and 2007 and by creating the Customs Union between Belarus, Kazakhstan and Russia this year. This also considerably reduces time of passage through the border and ultimately the total run time of international railway traffic.
We stand for the convergence of legal systems
– How do you assess the effectiveness of the unified CIM / SMGS railway invoice form and the expansion of its circulation area?
– Practical use of this invoice form since 2006 has greatly facilitated the border crossing procedures in international rail freight traffic. It excluded the need to transfer data from invoices circulating in CIM operating area, to SMGS invoices, or the other way round. Also, it became possible to skip their translation into other languages. All this helps avoid many errors and greatly reduces downtime at the border, saving up to 10 hours for each train. The invoice is also considered to be one of the important steps in the rapprochement between the two legal systems, CIM and SMGS. This work continues. For example, expertise, legal and joint coordination groups have been already established.
In 2009, three joint meetings developed documents that came into force on January 1st, 2010. This was a new version of Clause 12 and Clause 25 of the Guide to the CIM/SMGS. Also, additions came into force about the use of Chinese language both for issuing and filling in transport documents. These and other additions make the use of these invoices more attractive to carriers and customers. One of the advantages of new documentation is its equal recognition in both the SMGS and CIM legal areas.
Last year an electronic CIM/SMGS form was created, and its functional and legal specifications were prepared as a result. Carriers are recommended to use it, but not obliged.
Cargoes supplied with such a new invoice were regularly shipped by many routes in 2009, such as container trains with spare parts for the factory of Volkswagen from Veljko Ida (Slovakia) to Kaluga (Russia); trains from Kiev (Ukraine) to Chumeshti (Romania ) and then to Moscow, and several other routes.
Additional CIM/SMGS shipments are scheduled in 2010 by the following routes: container trains for BTT company from Duisburg (Germany) to Moscow (Russia); wagonloads for Klaas company from Germany to Krasnodar (Russia); and trains with car parts for Audi’s factory from Dyor (Hungary) to Kaluga (Russia). Car parts have been shipped from France to the station of Vorotynsk for the Peugeot plant since March 5th.
Since June this year, CIM/SMGS container train Moskvich has started running between Duisburg (Germany) and Moscow, organized by the joint Russian-German company Trans-Eurasia Logistics GmbH with the support of TransContainer and DB Intermodal.
Important steps have been taken in recent years to apply the unified invoice in the east - in Kazakhstan, China and other countries. It is essential today, because freight traffic between China, Central Asia and Europe is constantly growing. This invoice form is planned to also be widely used on the railway-ferry route between Baltiysk and Sassnitz and between Ust-Luga and Sassnitz. Lithuanian Railways have commenced negotiations with DB Schenker Rail DE and Belarusian Railways about this invoice form to be used on their railway-ferry route
Sassnitz - Klaipėda - Sassnitz, which has a large transport capacity.
How can the Technical Requirements be combined?
– The European Railway Agency has established a working group within its structure, to work out the questions of unification of technical specifications for the rolling stock in the 1435 and 1520 areas, in order to facilitate maximum interaction between the two systems. How do you assess its activities? What is the OSJD undertaking to remove differences in the technical and technological approaches used in the different widths gauges?
– In 2005, OSJD Committee received a letter from the Ministers of Transport of Latvia, Lithuania and Estonia to consider interoperability and compatibility between railway systems 1520 and 1435, together with the EU authorities, as well as the question of participation in the development of complex technical specifications for interoperability (TSI ) of the 1520 mm gauge. The need to solve this problem, which has grown after these countries entered the EU. As a result, railway transport has got the requirements of the European Union, on the one hand, and on the other hand, it has the old rules for the 1520 mm gauge.
Consequently, OSJD Committee, on behalf of the 20th Session of the Conference of General Directors (CGD), appealed to the EU Commission with a proposal to establish a joint contact group of interested OSJD members and OSJD member countries. The introduction of new technical specifications for interoperability (TSI) has now become a reality on the railways of 1520 mm gauge in some EU countries which are also members of OSJD and have CIS/EU borders with transition points 1520 mm/1435 mm or 1520 mm/1520 mm. Enclaves with 1520 mm wide gauge are already available in Slovakia, where the line was laid in the 1960s for the metallurgical plant in Kosice. In Poland; a broad-line was launched in 1966 for a large metallurgical enterprise in the city of Katowice; and the line LHS (Linia Hutniczo Siarkowa - Linia Hutnicza Szerokotorowa) was commissioned in 1976 between the towns of Hrubesch and Slavkov to increase throughput. There are also small enclaves in Hungary (26 kilometres) and Romania (60 kilometres), and the project continues to build the 1520 mm line from Russia to Austria via Ukraine and Slovakia. Track width in Finland (this country is an OSJD observer) is 1524 mm, which does not require technical re-equipment of rolling stock used on the 1520 mm gauge. The railways of this country have long been using both the general rules applicable to other EU railway countries and private norms for the 1524 mm gauge.
Carriers and companies which control the infrastructure of these countries interact directly with the railways of Russia, Belarus and Ukraine in providing cargo and passenger transit services towards the EU, Baltic ports and Kaliningrad. At the same time, they purchase both components and finished equipment from the manufacturers of the “1520 Area”, in the process of modernisation of railway equipment and infrastructure.
An OSJD/ERA contact group has conducted several joint meetings where it was decided to conclude an agreement to work on the analysis of interaction between the 1520 mm and 1524 mm railway systems, both in and outside the EU, as well as to consider issues of interoperability with the 1435 mm track.
Belarus, Latvia, Lithuania, Poland, Russia, Slovakia, Ukraine and Estonia are OSJD member countries who have expressed their support to this work. Their representatives, along with the representative of SNCF, entered into the OSJD/ERA Contact Group.
The results of the analytical work to compare the technical parameters of the systems 1520 and 1435 allowed ERA to recommend the European Commission to equally include the 1520 mm system in the TSI which is being developed for 1435 mm track. These recommendations are published on ERA’s web-site (www.era.europa.eu). Following these recommendations, the inclusion of 1520 mm in the TSI is planned as a part of ERA’s work program for the coming years. This suggests that the European Union has recognized the need to integrate the system of 1520 mm into EU legislation, which is one of the main objectives of the OSJD/ERA Contact Group.
Competition Appears Where Conditions
Are Equal
– You have repeatedly pointed out that, due to a lack of balanced tariff policy, railway loses to road, river, and, in some areas, to sea transport. Do you think OSJD can improve this situation? And what should be done to raise the competitiveness of railway transport?
– Of course, the experience of the EU and the CR shows that, first of all, this is done through the creation of equal competitive conditions for road and rail transport. Progress in this direction is confirmed both by setting fees for the use of roads (such as toll collection) and facilitating container and trailer traffic, and also by opening logistics centres. The environmental map may also play an important role, since railway is the most environmentally friendly transport, avoiding traffic jams.
In general, the importance of increasing the competitiveness of railway transport between Europe and Asia is growing. It is no secret that the current volume of freight from China to Europe by rail is only about 1%, and almost everything else is sea transport. This is despite the fact that test runs showed that delivery by rail from China to Germany in container trains can be twice as fast as by sea.
Here railways must compete for freight traffic from the central and western regions of China, which could go to the West by rail instead of going first to the Chinese eastern ports by road and then by sea, bypassing the Eurasian continent.
A new industrial centre is being organised in the west of China near the border with Kazakhstan with investments amounting to at least $215 billion. It is located to the southeast in Yuininge, the provincial capital of Urumqi, which has recently been directly connected to the Chinese railway network. Kazakhstan Railway has started building a second rail crossing on the border between China and Kazakhstan. Rapid economic development in western regions of China, which are several thousand kilometres away from ports, creates new demands and challenges for transport operators, especially on the railways.
– The number of privately owned monopolies or subsidiaries is growing in the CIS and Europe. This process is especially fast in Russia and Poland. It is becoming clear that OSJD has to cooperate with them in order to keep it effective. Is it possible?
– Really, the situation on railway transport market has changed very much, which examples in Russia show (new companies such as PGK and FPK were created recently, and soon Second Cargo Company will be started) and Poland (PKP Cargo, PKP Intercity, Kolei Mazowiecki, etc.). It requires new approaches to solve problems in the organization of international transport, which includes the review of such issues as liability of carriers, their participation in international agreements (SMPS, SMGS and others), the right to vote (each country’s interests are currently represented by only one railway company entitled to vote), etc.
Therefore, there are such forms of participation established in OSJD as Supervisors - Ministries or Railways (there are only six of those at the moment) and Associated Enterprises - for companies and organizations directly involved in railway transport (currently they number more than 30). Among Russian companies which became OSJD Associated Enterprises, there are The First Cargo Company, Neftehimtrans and TransTeleCom among others. These companies and supervisors are actively involved in the development and revision of technical documentation, carried out in the framework of the OSJD Commission for Freight and Passenger Transport, Commission for Infrastructure and Rolling Stock, and Permanent Working Group for Coordination and Information Technology, Financial and Payment Issues.
Cooperation As a Priority
– Striving for a combined transport market is impossible without OSJD’s cooperation with various international organisations. What issues do you consider the most important currently, and what joint projects have you planned for the future?
– It is necessary to say openly that the cooperation with those international organisations who solve problems in transport and railway is a key issue for the organisation. First of all, here should be mentioned the joint work of OSJD with UNECE, UNESCAP, OTIF ERA, the International Transport Forum, CIT, UIC, CCTT, ECO, etc.
Collaboration with the United Nations Economic Commission for Europe (UNECE) is carried out by participating in several working groups: Railway Transport (SC.2), Customs Questions and Transport (WP.30), Transport Trends and Economics (WP.5), Interoperable Transport and Logistics (WP.24) and Transport of Dangerous Goods (WP.15).
Productive areas of cooperation are the works to bring OSJD corridors in accordance with the requirements of the European Agreement on Main International Railway Lines (AGC), as well as joint actions to facilitate border crossing for international railway traffic.
To this end, in 2007, the Session of the UNECE Committee for Inland Transport adopted the signing of a new Convention on International Customs Transit Procedures for the Carriage of Goods by Railway Transport using SMGS. However, despite the appeal of UNECE and OSJD Committee to the OSJD member countries, no countries except for Ukraine have started a procedure to sign and adopt this Convention yet.
Collaboration with the UIC was primarily aimed at introducing a holistic approach to the Euro-Asian railway transport system which takes into account the interests of railways, and harmonisation of the operational and technical requirements of railway transport in the activities of both organisations. This process involves representatives of the industry, in order to improve interoperability and to raise the efficiency of railway transport.
In 2009, joint works were carried out with the parties to establish a NTEI OSJD data bank; to use freight wagons of the new generation in the communication between railways with 1435 mm and 1520 mm gauges; to improve the Harmonised Range of Goods; regarding the dimensions of rolling stock to meet the requirements of interoperability; CIM/SMGS electronic data interchange and other issues. “OSJD/UIC Coding and Information Technology” joint group continued its activities.
A Memorandum of mutual actions regarding the harmonisation of NHM and GNG between the UIC Steering Committee for NHM and the Committee of the Organisation for Cooperation of Railways was signed in July last year.
Also, OSJD Committee was present at the meeting of the UIC General Assembly, and a Memorandum of Cooperation between OSJD and UIC from 2010 up to 2015 was signed in March 2010, during the visit of Jean-Pierre Loubinoux, Director General of UIC, to OSJD Committee.
We hope that the implementation of joint projects and activities will promote the further development of railway transport in the Eurasian continent, increasing its competitiveness, reducing run time and costs, which will ultimately reduce the transport share in the price of goods.
Interviewed by Oleg Dyachenko
[~DETAIL_TEXT] => looking into the future
– What do you think should be done to facilitate the movement of goods through border stations?
– Simplification of procedures at border crossings on international railway transport routes has long been the OSJD’s focus of attention. This question is included in the agenda of the Commission for Transport Policy and Development Strategy. We have managed to achieve some success in this area.
Thus, the OSJD member countries provide control over the strict observance of the established time for checking passenger trains at border stations. Necessary measures to remove causes of the delays are taken in cases of longer check time, and all the parties promptly receive relevant information.
Also, the leading executive organisation from the Czech Republic has drafted a structure for a compendium of practical experience to simplify border crossings. It envisages main sections, which will be made to generalize the positive experience in this field, and examples will be given of effective solutions to problems. They can be used in the practice of OSJD member countries at border crossings.
Preparation and approval procedures are currently on the draft of Annex 9 to “Facilitation of Border Crossing in International Railway Transport” to the International Convention on the Harmonization of Frontier Controls of Goods (1982).
A Working Group considered the revised text of the draft and forwarded it for approval to the Administrative Committee of the Convention (AK.3), where it was agreed.
Removing barriers for cargoes and passengers was facilitated by a number of OSJD member countries entering the EU in 2004 and 2007 and by creating the Customs Union between Belarus, Kazakhstan and Russia this year. This also considerably reduces time of passage through the border and ultimately the total run time of international railway traffic.
We stand for the convergence of legal systems
– How do you assess the effectiveness of the unified CIM / SMGS railway invoice form and the expansion of its circulation area?
– Practical use of this invoice form since 2006 has greatly facilitated the border crossing procedures in international rail freight traffic. It excluded the need to transfer data from invoices circulating in CIM operating area, to SMGS invoices, or the other way round. Also, it became possible to skip their translation into other languages. All this helps avoid many errors and greatly reduces downtime at the border, saving up to 10 hours for each train. The invoice is also considered to be one of the important steps in the rapprochement between the two legal systems, CIM and SMGS. This work continues. For example, expertise, legal and joint coordination groups have been already established.
In 2009, three joint meetings developed documents that came into force on January 1st, 2010. This was a new version of Clause 12 and Clause 25 of the Guide to the CIM/SMGS. Also, additions came into force about the use of Chinese language both for issuing and filling in transport documents. These and other additions make the use of these invoices more attractive to carriers and customers. One of the advantages of new documentation is its equal recognition in both the SMGS and CIM legal areas.
Last year an electronic CIM/SMGS form was created, and its functional and legal specifications were prepared as a result. Carriers are recommended to use it, but not obliged.
Cargoes supplied with such a new invoice were regularly shipped by many routes in 2009, such as container trains with spare parts for the factory of Volkswagen from Veljko Ida (Slovakia) to Kaluga (Russia); trains from Kiev (Ukraine) to Chumeshti (Romania ) and then to Moscow, and several other routes.
Additional CIM/SMGS shipments are scheduled in 2010 by the following routes: container trains for BTT company from Duisburg (Germany) to Moscow (Russia); wagonloads for Klaas company from Germany to Krasnodar (Russia); and trains with car parts for Audi’s factory from Dyor (Hungary) to Kaluga (Russia). Car parts have been shipped from France to the station of Vorotynsk for the Peugeot plant since March 5th.
Since June this year, CIM/SMGS container train Moskvich has started running between Duisburg (Germany) and Moscow, organized by the joint Russian-German company Trans-Eurasia Logistics GmbH with the support of TransContainer and DB Intermodal.
Important steps have been taken in recent years to apply the unified invoice in the east - in Kazakhstan, China and other countries. It is essential today, because freight traffic between China, Central Asia and Europe is constantly growing. This invoice form is planned to also be widely used on the railway-ferry route between Baltiysk and Sassnitz and between Ust-Luga and Sassnitz. Lithuanian Railways have commenced negotiations with DB Schenker Rail DE and Belarusian Railways about this invoice form to be used on their railway-ferry route
Sassnitz - Klaipėda - Sassnitz, which has a large transport capacity.
How can the Technical Requirements be combined?
– The European Railway Agency has established a working group within its structure, to work out the questions of unification of technical specifications for the rolling stock in the 1435 and 1520 areas, in order to facilitate maximum interaction between the two systems. How do you assess its activities? What is the OSJD undertaking to remove differences in the technical and technological approaches used in the different widths gauges?
– In 2005, OSJD Committee received a letter from the Ministers of Transport of Latvia, Lithuania and Estonia to consider interoperability and compatibility between railway systems 1520 and 1435, together with the EU authorities, as well as the question of participation in the development of complex technical specifications for interoperability (TSI ) of the 1520 mm gauge. The need to solve this problem, which has grown after these countries entered the EU. As a result, railway transport has got the requirements of the European Union, on the one hand, and on the other hand, it has the old rules for the 1520 mm gauge.
Consequently, OSJD Committee, on behalf of the 20th Session of the Conference of General Directors (CGD), appealed to the EU Commission with a proposal to establish a joint contact group of interested OSJD members and OSJD member countries. The introduction of new technical specifications for interoperability (TSI) has now become a reality on the railways of 1520 mm gauge in some EU countries which are also members of OSJD and have CIS/EU borders with transition points 1520 mm/1435 mm or 1520 mm/1520 mm. Enclaves with 1520 mm wide gauge are already available in Slovakia, where the line was laid in the 1960s for the metallurgical plant in Kosice. In Poland; a broad-line was launched in 1966 for a large metallurgical enterprise in the city of Katowice; and the line LHS (Linia Hutniczo Siarkowa - Linia Hutnicza Szerokotorowa) was commissioned in 1976 between the towns of Hrubesch and Slavkov to increase throughput. There are also small enclaves in Hungary (26 kilometres) and Romania (60 kilometres), and the project continues to build the 1520 mm line from Russia to Austria via Ukraine and Slovakia. Track width in Finland (this country is an OSJD observer) is 1524 mm, which does not require technical re-equipment of rolling stock used on the 1520 mm gauge. The railways of this country have long been using both the general rules applicable to other EU railway countries and private norms for the 1524 mm gauge.
Carriers and companies which control the infrastructure of these countries interact directly with the railways of Russia, Belarus and Ukraine in providing cargo and passenger transit services towards the EU, Baltic ports and Kaliningrad. At the same time, they purchase both components and finished equipment from the manufacturers of the “1520 Area”, in the process of modernisation of railway equipment and infrastructure.
An OSJD/ERA contact group has conducted several joint meetings where it was decided to conclude an agreement to work on the analysis of interaction between the 1520 mm and 1524 mm railway systems, both in and outside the EU, as well as to consider issues of interoperability with the 1435 mm track.
Belarus, Latvia, Lithuania, Poland, Russia, Slovakia, Ukraine and Estonia are OSJD member countries who have expressed their support to this work. Their representatives, along with the representative of SNCF, entered into the OSJD/ERA Contact Group.
The results of the analytical work to compare the technical parameters of the systems 1520 and 1435 allowed ERA to recommend the European Commission to equally include the 1520 mm system in the TSI which is being developed for 1435 mm track. These recommendations are published on ERA’s web-site (www.era.europa.eu). Following these recommendations, the inclusion of 1520 mm in the TSI is planned as a part of ERA’s work program for the coming years. This suggests that the European Union has recognized the need to integrate the system of 1520 mm into EU legislation, which is one of the main objectives of the OSJD/ERA Contact Group.
Competition Appears Where Conditions
Are Equal
– You have repeatedly pointed out that, due to a lack of balanced tariff policy, railway loses to road, river, and, in some areas, to sea transport. Do you think OSJD can improve this situation? And what should be done to raise the competitiveness of railway transport?
– Of course, the experience of the EU and the CR shows that, first of all, this is done through the creation of equal competitive conditions for road and rail transport. Progress in this direction is confirmed both by setting fees for the use of roads (such as toll collection) and facilitating container and trailer traffic, and also by opening logistics centres. The environmental map may also play an important role, since railway is the most environmentally friendly transport, avoiding traffic jams.
In general, the importance of increasing the competitiveness of railway transport between Europe and Asia is growing. It is no secret that the current volume of freight from China to Europe by rail is only about 1%, and almost everything else is sea transport. This is despite the fact that test runs showed that delivery by rail from China to Germany in container trains can be twice as fast as by sea.
Here railways must compete for freight traffic from the central and western regions of China, which could go to the West by rail instead of going first to the Chinese eastern ports by road and then by sea, bypassing the Eurasian continent.
A new industrial centre is being organised in the west of China near the border with Kazakhstan with investments amounting to at least $215 billion. It is located to the southeast in Yuininge, the provincial capital of Urumqi, which has recently been directly connected to the Chinese railway network. Kazakhstan Railway has started building a second rail crossing on the border between China and Kazakhstan. Rapid economic development in western regions of China, which are several thousand kilometres away from ports, creates new demands and challenges for transport operators, especially on the railways.
– The number of privately owned monopolies or subsidiaries is growing in the CIS and Europe. This process is especially fast in Russia and Poland. It is becoming clear that OSJD has to cooperate with them in order to keep it effective. Is it possible?
– Really, the situation on railway transport market has changed very much, which examples in Russia show (new companies such as PGK and FPK were created recently, and soon Second Cargo Company will be started) and Poland (PKP Cargo, PKP Intercity, Kolei Mazowiecki, etc.). It requires new approaches to solve problems in the organization of international transport, which includes the review of such issues as liability of carriers, their participation in international agreements (SMPS, SMGS and others), the right to vote (each country’s interests are currently represented by only one railway company entitled to vote), etc.
Therefore, there are such forms of participation established in OSJD as Supervisors - Ministries or Railways (there are only six of those at the moment) and Associated Enterprises - for companies and organizations directly involved in railway transport (currently they number more than 30). Among Russian companies which became OSJD Associated Enterprises, there are The First Cargo Company, Neftehimtrans and TransTeleCom among others. These companies and supervisors are actively involved in the development and revision of technical documentation, carried out in the framework of the OSJD Commission for Freight and Passenger Transport, Commission for Infrastructure and Rolling Stock, and Permanent Working Group for Coordination and Information Technology, Financial and Payment Issues.
Cooperation As a Priority
– Striving for a combined transport market is impossible without OSJD’s cooperation with various international organisations. What issues do you consider the most important currently, and what joint projects have you planned for the future?
– It is necessary to say openly that the cooperation with those international organisations who solve problems in transport and railway is a key issue for the organisation. First of all, here should be mentioned the joint work of OSJD with UNECE, UNESCAP, OTIF ERA, the International Transport Forum, CIT, UIC, CCTT, ECO, etc.
Collaboration with the United Nations Economic Commission for Europe (UNECE) is carried out by participating in several working groups: Railway Transport (SC.2), Customs Questions and Transport (WP.30), Transport Trends and Economics (WP.5), Interoperable Transport and Logistics (WP.24) and Transport of Dangerous Goods (WP.15).
Productive areas of cooperation are the works to bring OSJD corridors in accordance with the requirements of the European Agreement on Main International Railway Lines (AGC), as well as joint actions to facilitate border crossing for international railway traffic.
To this end, in 2007, the Session of the UNECE Committee for Inland Transport adopted the signing of a new Convention on International Customs Transit Procedures for the Carriage of Goods by Railway Transport using SMGS. However, despite the appeal of UNECE and OSJD Committee to the OSJD member countries, no countries except for Ukraine have started a procedure to sign and adopt this Convention yet.
Collaboration with the UIC was primarily aimed at introducing a holistic approach to the Euro-Asian railway transport system which takes into account the interests of railways, and harmonisation of the operational and technical requirements of railway transport in the activities of both organisations. This process involves representatives of the industry, in order to improve interoperability and to raise the efficiency of railway transport.
In 2009, joint works were carried out with the parties to establish a NTEI OSJD data bank; to use freight wagons of the new generation in the communication between railways with 1435 mm and 1520 mm gauges; to improve the Harmonised Range of Goods; regarding the dimensions of rolling stock to meet the requirements of interoperability; CIM/SMGS electronic data interchange and other issues. “OSJD/UIC Coding and Information Technology” joint group continued its activities.
A Memorandum of mutual actions regarding the harmonisation of NHM and GNG between the UIC Steering Committee for NHM and the Committee of the Organisation for Cooperation of Railways was signed in July last year.
Also, OSJD Committee was present at the meeting of the UIC General Assembly, and a Memorandum of Cooperation between OSJD and UIC from 2010 up to 2015 was signed in March 2010, during the visit of Jean-Pierre Loubinoux, Director General of UIC, to OSJD Committee.
We hope that the implementation of joint projects and activities will promote the further development of railway transport in the Eurasian continent, increasing its competitiveness, reducing run time and costs, which will ultimately reduce the transport share in the price of goods.
Interviewed by Oleg Dyachenko
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[DETAIL_TEXT] => looking into the future
– What do you think should be done to facilitate the movement of goods through border stations?
– Simplification of procedures at border crossings on international railway transport routes has long been the OSJD’s focus of attention. This question is included in the agenda of the Commission for Transport Policy and Development Strategy. We have managed to achieve some success in this area.
Thus, the OSJD member countries provide control over the strict observance of the established time for checking passenger trains at border stations. Necessary measures to remove causes of the delays are taken in cases of longer check time, and all the parties promptly receive relevant information.
Also, the leading executive organisation from the Czech Republic has drafted a structure for a compendium of practical experience to simplify border crossings. It envisages main sections, which will be made to generalize the positive experience in this field, and examples will be given of effective solutions to problems. They can be used in the practice of OSJD member countries at border crossings.
Preparation and approval procedures are currently on the draft of Annex 9 to “Facilitation of Border Crossing in International Railway Transport” to the International Convention on the Harmonization of Frontier Controls of Goods (1982).
A Working Group considered the revised text of the draft and forwarded it for approval to the Administrative Committee of the Convention (AK.3), where it was agreed.
Removing barriers for cargoes and passengers was facilitated by a number of OSJD member countries entering the EU in 2004 and 2007 and by creating the Customs Union between Belarus, Kazakhstan and Russia this year. This also considerably reduces time of passage through the border and ultimately the total run time of international railway traffic.
We stand for the convergence of legal systems
– How do you assess the effectiveness of the unified CIM / SMGS railway invoice form and the expansion of its circulation area?
– Practical use of this invoice form since 2006 has greatly facilitated the border crossing procedures in international rail freight traffic. It excluded the need to transfer data from invoices circulating in CIM operating area, to SMGS invoices, or the other way round. Also, it became possible to skip their translation into other languages. All this helps avoid many errors and greatly reduces downtime at the border, saving up to 10 hours for each train. The invoice is also considered to be one of the important steps in the rapprochement between the two legal systems, CIM and SMGS. This work continues. For example, expertise, legal and joint coordination groups have been already established.
In 2009, three joint meetings developed documents that came into force on January 1st, 2010. This was a new version of Clause 12 and Clause 25 of the Guide to the CIM/SMGS. Also, additions came into force about the use of Chinese language both for issuing and filling in transport documents. These and other additions make the use of these invoices more attractive to carriers and customers. One of the advantages of new documentation is its equal recognition in both the SMGS and CIM legal areas.
Last year an electronic CIM/SMGS form was created, and its functional and legal specifications were prepared as a result. Carriers are recommended to use it, but not obliged.
Cargoes supplied with such a new invoice were regularly shipped by many routes in 2009, such as container trains with spare parts for the factory of Volkswagen from Veljko Ida (Slovakia) to Kaluga (Russia); trains from Kiev (Ukraine) to Chumeshti (Romania ) and then to Moscow, and several other routes.
Additional CIM/SMGS shipments are scheduled in 2010 by the following routes: container trains for BTT company from Duisburg (Germany) to Moscow (Russia); wagonloads for Klaas company from Germany to Krasnodar (Russia); and trains with car parts for Audi’s factory from Dyor (Hungary) to Kaluga (Russia). Car parts have been shipped from France to the station of Vorotynsk for the Peugeot plant since March 5th.
Since June this year, CIM/SMGS container train Moskvich has started running between Duisburg (Germany) and Moscow, organized by the joint Russian-German company Trans-Eurasia Logistics GmbH with the support of TransContainer and DB Intermodal.
Important steps have been taken in recent years to apply the unified invoice in the east - in Kazakhstan, China and other countries. It is essential today, because freight traffic between China, Central Asia and Europe is constantly growing. This invoice form is planned to also be widely used on the railway-ferry route between Baltiysk and Sassnitz and between Ust-Luga and Sassnitz. Lithuanian Railways have commenced negotiations with DB Schenker Rail DE and Belarusian Railways about this invoice form to be used on their railway-ferry route
Sassnitz - Klaipėda - Sassnitz, which has a large transport capacity.
How can the Technical Requirements be combined?
– The European Railway Agency has established a working group within its structure, to work out the questions of unification of technical specifications for the rolling stock in the 1435 and 1520 areas, in order to facilitate maximum interaction between the two systems. How do you assess its activities? What is the OSJD undertaking to remove differences in the technical and technological approaches used in the different widths gauges?
– In 2005, OSJD Committee received a letter from the Ministers of Transport of Latvia, Lithuania and Estonia to consider interoperability and compatibility between railway systems 1520 and 1435, together with the EU authorities, as well as the question of participation in the development of complex technical specifications for interoperability (TSI ) of the 1520 mm gauge. The need to solve this problem, which has grown after these countries entered the EU. As a result, railway transport has got the requirements of the European Union, on the one hand, and on the other hand, it has the old rules for the 1520 mm gauge.
Consequently, OSJD Committee, on behalf of the 20th Session of the Conference of General Directors (CGD), appealed to the EU Commission with a proposal to establish a joint contact group of interested OSJD members and OSJD member countries. The introduction of new technical specifications for interoperability (TSI) has now become a reality on the railways of 1520 mm gauge in some EU countries which are also members of OSJD and have CIS/EU borders with transition points 1520 mm/1435 mm or 1520 mm/1520 mm. Enclaves with 1520 mm wide gauge are already available in Slovakia, where the line was laid in the 1960s for the metallurgical plant in Kosice. In Poland; a broad-line was launched in 1966 for a large metallurgical enterprise in the city of Katowice; and the line LHS (Linia Hutniczo Siarkowa - Linia Hutnicza Szerokotorowa) was commissioned in 1976 between the towns of Hrubesch and Slavkov to increase throughput. There are also small enclaves in Hungary (26 kilometres) and Romania (60 kilometres), and the project continues to build the 1520 mm line from Russia to Austria via Ukraine and Slovakia. Track width in Finland (this country is an OSJD observer) is 1524 mm, which does not require technical re-equipment of rolling stock used on the 1520 mm gauge. The railways of this country have long been using both the general rules applicable to other EU railway countries and private norms for the 1524 mm gauge.
Carriers and companies which control the infrastructure of these countries interact directly with the railways of Russia, Belarus and Ukraine in providing cargo and passenger transit services towards the EU, Baltic ports and Kaliningrad. At the same time, they purchase both components and finished equipment from the manufacturers of the “1520 Area”, in the process of modernisation of railway equipment and infrastructure.
An OSJD/ERA contact group has conducted several joint meetings where it was decided to conclude an agreement to work on the analysis of interaction between the 1520 mm and 1524 mm railway systems, both in and outside the EU, as well as to consider issues of interoperability with the 1435 mm track.
Belarus, Latvia, Lithuania, Poland, Russia, Slovakia, Ukraine and Estonia are OSJD member countries who have expressed their support to this work. Their representatives, along with the representative of SNCF, entered into the OSJD/ERA Contact Group.
The results of the analytical work to compare the technical parameters of the systems 1520 and 1435 allowed ERA to recommend the European Commission to equally include the 1520 mm system in the TSI which is being developed for 1435 mm track. These recommendations are published on ERA’s web-site (www.era.europa.eu). Following these recommendations, the inclusion of 1520 mm in the TSI is planned as a part of ERA’s work program for the coming years. This suggests that the European Union has recognized the need to integrate the system of 1520 mm into EU legislation, which is one of the main objectives of the OSJD/ERA Contact Group.
Competition Appears Where Conditions
Are Equal
– You have repeatedly pointed out that, due to a lack of balanced tariff policy, railway loses to road, river, and, in some areas, to sea transport. Do you think OSJD can improve this situation? And what should be done to raise the competitiveness of railway transport?
– Of course, the experience of the EU and the CR shows that, first of all, this is done through the creation of equal competitive conditions for road and rail transport. Progress in this direction is confirmed both by setting fees for the use of roads (such as toll collection) and facilitating container and trailer traffic, and also by opening logistics centres. The environmental map may also play an important role, since railway is the most environmentally friendly transport, avoiding traffic jams.
In general, the importance of increasing the competitiveness of railway transport between Europe and Asia is growing. It is no secret that the current volume of freight from China to Europe by rail is only about 1%, and almost everything else is sea transport. This is despite the fact that test runs showed that delivery by rail from China to Germany in container trains can be twice as fast as by sea.
Here railways must compete for freight traffic from the central and western regions of China, which could go to the West by rail instead of going first to the Chinese eastern ports by road and then by sea, bypassing the Eurasian continent.
A new industrial centre is being organised in the west of China near the border with Kazakhstan with investments amounting to at least $215 billion. It is located to the southeast in Yuininge, the provincial capital of Urumqi, which has recently been directly connected to the Chinese railway network. Kazakhstan Railway has started building a second rail crossing on the border between China and Kazakhstan. Rapid economic development in western regions of China, which are several thousand kilometres away from ports, creates new demands and challenges for transport operators, especially on the railways.
– The number of privately owned monopolies or subsidiaries is growing in the CIS and Europe. This process is especially fast in Russia and Poland. It is becoming clear that OSJD has to cooperate with them in order to keep it effective. Is it possible?
– Really, the situation on railway transport market has changed very much, which examples in Russia show (new companies such as PGK and FPK were created recently, and soon Second Cargo Company will be started) and Poland (PKP Cargo, PKP Intercity, Kolei Mazowiecki, etc.). It requires new approaches to solve problems in the organization of international transport, which includes the review of such issues as liability of carriers, their participation in international agreements (SMPS, SMGS and others), the right to vote (each country’s interests are currently represented by only one railway company entitled to vote), etc.
Therefore, there are such forms of participation established in OSJD as Supervisors - Ministries or Railways (there are only six of those at the moment) and Associated Enterprises - for companies and organizations directly involved in railway transport (currently they number more than 30). Among Russian companies which became OSJD Associated Enterprises, there are The First Cargo Company, Neftehimtrans and TransTeleCom among others. These companies and supervisors are actively involved in the development and revision of technical documentation, carried out in the framework of the OSJD Commission for Freight and Passenger Transport, Commission for Infrastructure and Rolling Stock, and Permanent Working Group for Coordination and Information Technology, Financial and Payment Issues.
Cooperation As a Priority
– Striving for a combined transport market is impossible without OSJD’s cooperation with various international organisations. What issues do you consider the most important currently, and what joint projects have you planned for the future?
– It is necessary to say openly that the cooperation with those international organisations who solve problems in transport and railway is a key issue for the organisation. First of all, here should be mentioned the joint work of OSJD with UNECE, UNESCAP, OTIF ERA, the International Transport Forum, CIT, UIC, CCTT, ECO, etc.
Collaboration with the United Nations Economic Commission for Europe (UNECE) is carried out by participating in several working groups: Railway Transport (SC.2), Customs Questions and Transport (WP.30), Transport Trends and Economics (WP.5), Interoperable Transport and Logistics (WP.24) and Transport of Dangerous Goods (WP.15).
Productive areas of cooperation are the works to bring OSJD corridors in accordance with the requirements of the European Agreement on Main International Railway Lines (AGC), as well as joint actions to facilitate border crossing for international railway traffic.
To this end, in 2007, the Session of the UNECE Committee for Inland Transport adopted the signing of a new Convention on International Customs Transit Procedures for the Carriage of Goods by Railway Transport using SMGS. However, despite the appeal of UNECE and OSJD Committee to the OSJD member countries, no countries except for Ukraine have started a procedure to sign and adopt this Convention yet.
Collaboration with the UIC was primarily aimed at introducing a holistic approach to the Euro-Asian railway transport system which takes into account the interests of railways, and harmonisation of the operational and technical requirements of railway transport in the activities of both organisations. This process involves representatives of the industry, in order to improve interoperability and to raise the efficiency of railway transport.
In 2009, joint works were carried out with the parties to establish a NTEI OSJD data bank; to use freight wagons of the new generation in the communication between railways with 1435 mm and 1520 mm gauges; to improve the Harmonised Range of Goods; regarding the dimensions of rolling stock to meet the requirements of interoperability; CIM/SMGS electronic data interchange and other issues. “OSJD/UIC Coding and Information Technology” joint group continued its activities.
A Memorandum of mutual actions regarding the harmonisation of NHM and GNG between the UIC Steering Committee for NHM and the Committee of the Organisation for Cooperation of Railways was signed in July last year.
Also, OSJD Committee was present at the meeting of the UIC General Assembly, and a Memorandum of Cooperation between OSJD and UIC from 2010 up to 2015 was signed in March 2010, during the visit of Jean-Pierre Loubinoux, Director General of UIC, to OSJD Committee.
We hope that the implementation of joint projects and activities will promote the further development of railway transport in the Eurasian continent, increasing its competitiveness, reducing run time and costs, which will ultimately reduce the transport share in the price of goods.
Interviewed by Oleg Dyachenko
[~DETAIL_TEXT] => looking into the future
– What do you think should be done to facilitate the movement of goods through border stations?
– Simplification of procedures at border crossings on international railway transport routes has long been the OSJD’s focus of attention. This question is included in the agenda of the Commission for Transport Policy and Development Strategy. We have managed to achieve some success in this area.
Thus, the OSJD member countries provide control over the strict observance of the established time for checking passenger trains at border stations. Necessary measures to remove causes of the delays are taken in cases of longer check time, and all the parties promptly receive relevant information.
Also, the leading executive organisation from the Czech Republic has drafted a structure for a compendium of practical experience to simplify border crossings. It envisages main sections, which will be made to generalize the positive experience in this field, and examples will be given of effective solutions to problems. They can be used in the practice of OSJD member countries at border crossings.
Preparation and approval procedures are currently on the draft of Annex 9 to “Facilitation of Border Crossing in International Railway Transport” to the International Convention on the Harmonization of Frontier Controls of Goods (1982).
A Working Group considered the revised text of the draft and forwarded it for approval to the Administrative Committee of the Convention (AK.3), where it was agreed.
Removing barriers for cargoes and passengers was facilitated by a number of OSJD member countries entering the EU in 2004 and 2007 and by creating the Customs Union between Belarus, Kazakhstan and Russia this year. This also considerably reduces time of passage through the border and ultimately the total run time of international railway traffic.
We stand for the convergence of legal systems
– How do you assess the effectiveness of the unified CIM / SMGS railway invoice form and the expansion of its circulation area?
– Practical use of this invoice form since 2006 has greatly facilitated the border crossing procedures in international rail freight traffic. It excluded the need to transfer data from invoices circulating in CIM operating area, to SMGS invoices, or the other way round. Also, it became possible to skip their translation into other languages. All this helps avoid many errors and greatly reduces downtime at the border, saving up to 10 hours for each train. The invoice is also considered to be one of the important steps in the rapprochement between the two legal systems, CIM and SMGS. This work continues. For example, expertise, legal and joint coordination groups have been already established.
In 2009, three joint meetings developed documents that came into force on January 1st, 2010. This was a new version of Clause 12 and Clause 25 of the Guide to the CIM/SMGS. Also, additions came into force about the use of Chinese language both for issuing and filling in transport documents. These and other additions make the use of these invoices more attractive to carriers and customers. One of the advantages of new documentation is its equal recognition in both the SMGS and CIM legal areas.
Last year an electronic CIM/SMGS form was created, and its functional and legal specifications were prepared as a result. Carriers are recommended to use it, but not obliged.
Cargoes supplied with such a new invoice were regularly shipped by many routes in 2009, such as container trains with spare parts for the factory of Volkswagen from Veljko Ida (Slovakia) to Kaluga (Russia); trains from Kiev (Ukraine) to Chumeshti (Romania ) and then to Moscow, and several other routes.
Additional CIM/SMGS shipments are scheduled in 2010 by the following routes: container trains for BTT company from Duisburg (Germany) to Moscow (Russia); wagonloads for Klaas company from Germany to Krasnodar (Russia); and trains with car parts for Audi’s factory from Dyor (Hungary) to Kaluga (Russia). Car parts have been shipped from France to the station of Vorotynsk for the Peugeot plant since March 5th.
Since June this year, CIM/SMGS container train Moskvich has started running between Duisburg (Germany) and Moscow, organized by the joint Russian-German company Trans-Eurasia Logistics GmbH with the support of TransContainer and DB Intermodal.
Important steps have been taken in recent years to apply the unified invoice in the east - in Kazakhstan, China and other countries. It is essential today, because freight traffic between China, Central Asia and Europe is constantly growing. This invoice form is planned to also be widely used on the railway-ferry route between Baltiysk and Sassnitz and between Ust-Luga and Sassnitz. Lithuanian Railways have commenced negotiations with DB Schenker Rail DE and Belarusian Railways about this invoice form to be used on their railway-ferry route
Sassnitz - Klaipėda - Sassnitz, which has a large transport capacity.
How can the Technical Requirements be combined?
– The European Railway Agency has established a working group within its structure, to work out the questions of unification of technical specifications for the rolling stock in the 1435 and 1520 areas, in order to facilitate maximum interaction between the two systems. How do you assess its activities? What is the OSJD undertaking to remove differences in the technical and technological approaches used in the different widths gauges?
– In 2005, OSJD Committee received a letter from the Ministers of Transport of Latvia, Lithuania and Estonia to consider interoperability and compatibility between railway systems 1520 and 1435, together with the EU authorities, as well as the question of participation in the development of complex technical specifications for interoperability (TSI ) of the 1520 mm gauge. The need to solve this problem, which has grown after these countries entered the EU. As a result, railway transport has got the requirements of the European Union, on the one hand, and on the other hand, it has the old rules for the 1520 mm gauge.
Consequently, OSJD Committee, on behalf of the 20th Session of the Conference of General Directors (CGD), appealed to the EU Commission with a proposal to establish a joint contact group of interested OSJD members and OSJD member countries. The introduction of new technical specifications for interoperability (TSI) has now become a reality on the railways of 1520 mm gauge in some EU countries which are also members of OSJD and have CIS/EU borders with transition points 1520 mm/1435 mm or 1520 mm/1520 mm. Enclaves with 1520 mm wide gauge are already available in Slovakia, where the line was laid in the 1960s for the metallurgical plant in Kosice. In Poland; a broad-line was launched in 1966 for a large metallurgical enterprise in the city of Katowice; and the line LHS (Linia Hutniczo Siarkowa - Linia Hutnicza Szerokotorowa) was commissioned in 1976 between the towns of Hrubesch and Slavkov to increase throughput. There are also small enclaves in Hungary (26 kilometres) and Romania (60 kilometres), and the project continues to build the 1520 mm line from Russia to Austria via Ukraine and Slovakia. Track width in Finland (this country is an OSJD observer) is 1524 mm, which does not require technical re-equipment of rolling stock used on the 1520 mm gauge. The railways of this country have long been using both the general rules applicable to other EU railway countries and private norms for the 1524 mm gauge.
Carriers and companies which control the infrastructure of these countries interact directly with the railways of Russia, Belarus and Ukraine in providing cargo and passenger transit services towards the EU, Baltic ports and Kaliningrad. At the same time, they purchase both components and finished equipment from the manufacturers of the “1520 Area”, in the process of modernisation of railway equipment and infrastructure.
An OSJD/ERA contact group has conducted several joint meetings where it was decided to conclude an agreement to work on the analysis of interaction between the 1520 mm and 1524 mm railway systems, both in and outside the EU, as well as to consider issues of interoperability with the 1435 mm track.
Belarus, Latvia, Lithuania, Poland, Russia, Slovakia, Ukraine and Estonia are OSJD member countries who have expressed their support to this work. Their representatives, along with the representative of SNCF, entered into the OSJD/ERA Contact Group.
The results of the analytical work to compare the technical parameters of the systems 1520 and 1435 allowed ERA to recommend the European Commission to equally include the 1520 mm system in the TSI which is being developed for 1435 mm track. These recommendations are published on ERA’s web-site (www.era.europa.eu). Following these recommendations, the inclusion of 1520 mm in the TSI is planned as a part of ERA’s work program for the coming years. This suggests that the European Union has recognized the need to integrate the system of 1520 mm into EU legislation, which is one of the main objectives of the OSJD/ERA Contact Group.
Competition Appears Where Conditions
Are Equal
– You have repeatedly pointed out that, due to a lack of balanced tariff policy, railway loses to road, river, and, in some areas, to sea transport. Do you think OSJD can improve this situation? And what should be done to raise the competitiveness of railway transport?
– Of course, the experience of the EU and the CR shows that, first of all, this is done through the creation of equal competitive conditions for road and rail transport. Progress in this direction is confirmed both by setting fees for the use of roads (such as toll collection) and facilitating container and trailer traffic, and also by opening logistics centres. The environmental map may also play an important role, since railway is the most environmentally friendly transport, avoiding traffic jams.
In general, the importance of increasing the competitiveness of railway transport between Europe and Asia is growing. It is no secret that the current volume of freight from China to Europe by rail is only about 1%, and almost everything else is sea transport. This is despite the fact that test runs showed that delivery by rail from China to Germany in container trains can be twice as fast as by sea.
Here railways must compete for freight traffic from the central and western regions of China, which could go to the West by rail instead of going first to the Chinese eastern ports by road and then by sea, bypassing the Eurasian continent.
A new industrial centre is being organised in the west of China near the border with Kazakhstan with investments amounting to at least $215 billion. It is located to the southeast in Yuininge, the provincial capital of Urumqi, which has recently been directly connected to the Chinese railway network. Kazakhstan Railway has started building a second rail crossing on the border between China and Kazakhstan. Rapid economic development in western regions of China, which are several thousand kilometres away from ports, creates new demands and challenges for transport operators, especially on the railways.
– The number of privately owned monopolies or subsidiaries is growing in the CIS and Europe. This process is especially fast in Russia and Poland. It is becoming clear that OSJD has to cooperate with them in order to keep it effective. Is it possible?
– Really, the situation on railway transport market has changed very much, which examples in Russia show (new companies such as PGK and FPK were created recently, and soon Second Cargo Company will be started) and Poland (PKP Cargo, PKP Intercity, Kolei Mazowiecki, etc.). It requires new approaches to solve problems in the organization of international transport, which includes the review of such issues as liability of carriers, their participation in international agreements (SMPS, SMGS and others), the right to vote (each country’s interests are currently represented by only one railway company entitled to vote), etc.
Therefore, there are such forms of participation established in OSJD as Supervisors - Ministries or Railways (there are only six of those at the moment) and Associated Enterprises - for companies and organizations directly involved in railway transport (currently they number more than 30). Among Russian companies which became OSJD Associated Enterprises, there are The First Cargo Company, Neftehimtrans and TransTeleCom among others. These companies and supervisors are actively involved in the development and revision of technical documentation, carried out in the framework of the OSJD Commission for Freight and Passenger Transport, Commission for Infrastructure and Rolling Stock, and Permanent Working Group for Coordination and Information Technology, Financial and Payment Issues.
Cooperation As a Priority
– Striving for a combined transport market is impossible without OSJD’s cooperation with various international organisations. What issues do you consider the most important currently, and what joint projects have you planned for the future?
– It is necessary to say openly that the cooperation with those international organisations who solve problems in transport and railway is a key issue for the organisation. First of all, here should be mentioned the joint work of OSJD with UNECE, UNESCAP, OTIF ERA, the International Transport Forum, CIT, UIC, CCTT, ECO, etc.
Collaboration with the United Nations Economic Commission for Europe (UNECE) is carried out by participating in several working groups: Railway Transport (SC.2), Customs Questions and Transport (WP.30), Transport Trends and Economics (WP.5), Interoperable Transport and Logistics (WP.24) and Transport of Dangerous Goods (WP.15).
Productive areas of cooperation are the works to bring OSJD corridors in accordance with the requirements of the European Agreement on Main International Railway Lines (AGC), as well as joint actions to facilitate border crossing for international railway traffic.
To this end, in 2007, the Session of the UNECE Committee for Inland Transport adopted the signing of a new Convention on International Customs Transit Procedures for the Carriage of Goods by Railway Transport using SMGS. However, despite the appeal of UNECE and OSJD Committee to the OSJD member countries, no countries except for Ukraine have started a procedure to sign and adopt this Convention yet.
Collaboration with the UIC was primarily aimed at introducing a holistic approach to the Euro-Asian railway transport system which takes into account the interests of railways, and harmonisation of the operational and technical requirements of railway transport in the activities of both organisations. This process involves representatives of the industry, in order to improve interoperability and to raise the efficiency of railway transport.
In 2009, joint works were carried out with the parties to establish a NTEI OSJD data bank; to use freight wagons of the new generation in the communication between railways with 1435 mm and 1520 mm gauges; to improve the Harmonised Range of Goods; regarding the dimensions of rolling stock to meet the requirements of interoperability; CIM/SMGS electronic data interchange and other issues. “OSJD/UIC Coding and Information Technology” joint group continued its activities.
A Memorandum of mutual actions regarding the harmonisation of NHM and GNG between the UIC Steering Committee for NHM and the Committee of the Organisation for Cooperation of Railways was signed in July last year.
Also, OSJD Committee was present at the meeting of the UIC General Assembly, and a Memorandum of Cooperation between OSJD and UIC from 2010 up to 2015 was signed in March 2010, during the visit of Jean-Pierre Loubinoux, Director General of UIC, to OSJD Committee.
We hope that the implementation of joint projects and activities will promote the further development of railway transport in the Eurasian continent, increasing its competitiveness, reducing run time and costs, which will ultimately reduce the transport share in the price of goods.
Interviewed by Oleg Dyachenko
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[PREVIEW_TEXT] => The 38th Session of OSJD Ministers Meeting took place in Prague in June. Here we talk about its results with Tadeus Shozda, Chairman of OSJD Executive Committee.
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One of the priorities of Russian railroads is the development of combined transport on international routes, which are in additionArray
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[DETAIL_TEXT] => A Feature of Current Times Is Interoperability
No one has any doubt today that there is a need to strengthen cooperation between railways, shipping companies, logistics business and cargo owners for the sake of better efficiency in international trade and in order to use the benefits of railway transport in such areas as regional economic development, environmental protection and safety.
There is no such railway company which is able to succeed in international combined transport on its own. The result can only be achieved through mutually beneficial cooperation and continuous constructive dialogue with both government authorities and representatives of businesses related to the transport market.
The main challenges lying ahead include making transport systems efficient at junctions, in order to provide free passage for cargoes; to overcoming the negative impacts of the global economic crisis; to enhancing the development of transcontinental freight and using the advantages of railways as much as possible for those countries which do not have access to the sea. The development of interoperability and new logistical technologies is no less important.
Cooperation between RZD and the International Union of Railways is partly helping to solve this problem. Let me remind you that RZD (previously -- USSR Railways) is in the list of UIC founders. However, the participation of the USSR in the UIC was terminated because of the Second World War.
Our full membership of UIC became necessary again at the beginning of the 21st century when RZD entered new markets, started participating in large international investment projects, and had to relationships with railway companies from other countries. It could not go another way, because Russia is a kind of turning circle for Euro-Asian freight and passenger railway traffic, where trains come from all directions in order to continue their journey again in all directions.
As part of the UIC membership, RZD is involved in those strategic projects and UIC programs, which provide a basis for the systematic integration of railway networks of different standards. It also represents and promotes the “Area 1520” interests and fully supports the development of cooperation between OSJD and UIC, which is an effective form of multilateral cooperation between the railways of the East and the West.
Improvements on the network of international transport corridors and their infrastructure can be mentioned among primary priorities for mutual efforts for the sake of the development of both direct railway links and combined transport. Coordinated work across all parts of supply chain is being facilitated using unified cargo classification, new coding methods and software, a wider range of information and satellite technology, and a global rail cargo tracking system.
Here it is important not to forget about the integrated approach to infrastructure issues. Thus, it is necessary to improve traffic safety and to start using new effective methods of protection against unlawful interference. International railway corridors also help to reduce the harmful impact on the environment, compared with motorways (and we must not forget this). Therefore, using rail instead of a fraction of road traffic contributes to the improvement of the environmental situation. This is understood perfectly well in Europe, where combined routes with this participation of railways are given special attention. Such investment projects are considered to be a part of “green” logistics, and therefore they receive priority development. In this respect, Russia would do well to borrow from such a positive experience.
Innovation is the Only Way
The development of combined routes is the way for cargo owners to optimise costs. As a part of the general transport system, the railway sector had to work within the global economic crisis. Industrial enterprises, avoiding financial risks, cut production and reduced the amount of outbound cargo. As a result, freight figures have fallen considerably, which seriously affected the profits and the financial position of the railway industry, both in Russia and in other countries.
We find understanding among colleagues, that the development of transport infrastructure can provide an impetus for economic recovery. Railway transport was, and remains, the backbone of Russia. Consequently, ways to overcome the crisis should have a systematic character and involve state support in infrastructure projects first of all. It is obvious that, in the current conditions, consolidated action and joint efforts by those market participants who are interested in sending their cargoes by railroads, are the only ones able to maintain the position of railways and withstand market competition.
In order to successfully confront those challenges faced by the railways as a result of the global economic crisis, it is necessary to offer better quality traffic to the customers, to provide shorter delivery times, to reduce costs and to find new ways of linking with other parts of the transport chain. The only way to achieve the expected results is innovation, which means systematic application of advanced engineering solutions, the latest materials, cutting edge technologies and efficient services on the railway network.
The Government’s policy of innovation-led development should accelerate stabilisation and create a springboard for the further growth of the national economy. This is the basis to seek ways to increase the efficiency of the railway and its competitiveness in the global transport market. It is precisely combined transport which is giving an additional impetus to the search for new solutions focused on clients’ interests.
Public and Private Investments
In the first half of 2010, RZD’s network has achieved a 12.2% growth in loading figures, compared to the same period of 2009. In spring and summer traffic growth graphs showed a decline. Nevertheless, RZD expects a positive result by the end of 2010. The traffic should be at least 5% up. It is a moderately optimistic scenario. However, the company does not exclude the possibility of a second wave of the global crisis. Events will not necessarily turn out this way, but such discussions are going on at the moment. And you must be prepared for anything, laying plans for various types of risks.
At the same time, the fact that the company has finished the first half of the year without a negative income speaks in favour of the optimistic scenario. Revenue from freight in 2011 is expected to be more than RUR 900 billion. However, on the Russian national market, these figures largely depend on the government’s policies.
The necessity for the State to be involved in the development of infrastructure industries has been reaffirmed many times by international practices, and financial investments in transport infrastructure are the key instrument in the economy’s development after the crisis.
Implementation of such projects contributes to the creation of many thousands of jobs and supports the real economy. “Long” public investments are bounding (“sterilising”) the excessive monetary supply, and, consequently, level the risk of inflation. Finally, infrastructure investments are forming a real foundation for modernising economy, with a view to its recovery, which inevitably follows a period of decline in everything, including in shipping.
It is well known that in many countries the development of railway infrastructure has become a powerful tool to stimulate the economy. China has invested many billions of dollars in the construction of railways. In Europe, Spain, Britain, France and Germany are making a good example having had been increasing their investments in construction of new railways from 2008 to 2010. Projects are being developed in the U.S. to build high-speed railways which are subsidised by the state. This is not all taking place accidentally. Investments in the development of railways provide an enormous multiplying effect because the demand for high-tech production is growing, and the development of transport has a positive impact on the economy.
Another important task that can not be solved without government support is the creation of conditions for the large-scale involvement of private (both domestic and foreign) investment in the industry, including the mechanisms of public-private partnership. This is facilitated by a consistent structural reform in railway transport, due to which RZD really feels an increase in investment activity of rail freight sector.
Considerable opportunities for attracting private investments are being opened by cooperation in the field of terminal and logistics activities. For example, RZD is planning to create up to 100 terminal and logistics facilities across the network, with the assistance of interested Russian and foreign investors. All this creates the conditions for strengthening and improving the system of combined supply chains serving traffic flows.
Assessing the development of railway transport only on the basis of current short-term trends would be a strategic mistake. It is necessary to look to the future and prepare transport infrastructure in advance. Otherwise, there is a risk of shortage of transport capacities when the economy recovers.
The question is what should be the scope for the investment programs? In any case, the approach that industry development takes must be advanced and requires large resources, both financial and intellectual. Here, again, an active role of the state is required. The stability and safety of Russian mainlines, and their ability to provide additional freight, depend on these factors.
The Points of Economic Growth and Breakthrough Projects
It is good bear in mind that The Railway Transport Development Strategy in the Russian Federation Up To 2030 is aimed at the effective development of the Russian railways and their stronger competitiveness on the domestic and international transport markets by means of considerable investments in infrastructure projects and innovations in the freight and passenger traffic.
In accordance with the targets of the Strategic options, 20,700 kilometres of new railway lines are to be built and more than 23,000 locomotives and about one million freight wagons are to be upgraded before 2030. The goals in the modernisation and expansion of the railway network are to create fast lines (a total of 10,900 kilometres), high-speed lines (1,500 kilometres) and passenger and heavy freight lines (13,800 kilometres).
The condition for attracting cargoes on the network of Russian steel lines is development of infrastructure in international transport corridors. In this case, we speak about a better use of the transit potential and unique geographical position of Russia as a transcontinental transport bridge between Europe and Asia, which provides effective international communication, promotes a transition to integrated services which meet international standards and contributes to a number of promising business projects in railway transport.
For example, it is supposed to create a direct railway link with Iran in the framework of international transport corridor North - South, which will make cargo delivery five or seven days faster, compared with a trans-Caspian route. And getting rid of port fees makes it cheaper for shippers.
Given the growing demand and customer requirements, the list of routes for container trains is constantly expanding. A number of new routes were opened late last year, such as Latvia (Riga) - Russia (Kuntsevo-2) and Finland (Buslovskaya) - Russia (Shushary).
Development of container traffic should be among the main growth factors, because the potential transit traffic through the ITC East - West alone is estimated at one million TEUs per year, whereas now traffic figures on this route are in the range of 30,000 TEU to 32,000 TEU.
After the crisis, we paid much attention to the introduction of innovative schemes of cooperation. I shall mention a few strategically important projects initiated by RZD. A project to build a 1520 mm wide railway line on the territory of Slovakia to Bratislava and further on to Vienna together with the creation of logistics infrastructure can become a breakthrough factor for the development of transport links between Europe, CIS countries and China.
After the preliminary substantiation of investments, a Protocol of Early Pre-Work was signed by the railways of Austria, Slovakia, Ukraine and RZD. Construction of this line will increase the attractiveness of supply chains, which include railways. Transportation by the new railway line with a single track width will reduce costs, delivery time and the transport share of the final price of the goods carried.
According to our calculations, cargo delivery time for the return trip from Europe to Asia will be from 13 to14 days. Meanwhile, as regards the territory of Russia, we are planning to implement cargo transits from the eastern borders and ports in just seven days. It is planned that in 2012, speeds on the routes between the stations of Nakhodka and Krasnoye will already be 1.4 kilometres per day, or an average of 58.3 kph.
When the speed of 1.5 km per day is achieved (by 2015, as provided in RZD’s special program, ”The Transsib for Seven Days”), it will take only one week to cover the distance to Brest. However, it is necessary to understand that achieving high delivery speeds must go together with other comprehensive solutions. The service should meet better standards being simultaneously within a competitive price range, and good junctions are to be provided at cargo flow entry and exit points.
Also, brand new transport opportunities are being created through the launch and development of the railway ferry service between Ust-Luga, Baltiysk (Russia) and Sassnitz (Germany). Participation in the management of the national railway system which is characterised by the 1520 mm wide gauge is a no less promising form of international cooperation. All these strategic routes facilitate the appearance of additional branches to be connected, and hence the combined transport chains are being developed.
The adverse macroeconomic conditions must not become the reason for us to abandon our strategic plans, because the crisis has two sides: on one hand, there are risks involved, and on the other hand, there are new opportunities. And so far, there are still enough opportunities for cost optimisation. For example, there can be lower prices for resources consumed and growth in labour supply on the market, and opportunities to upgrade infrastructure at those transport sections which limit throughput. This all is difficult to do in periods of peak traffic volumes.
In order to achieve better efficiency, it is necessary to apply integrated innovative technologies, which are to be aimed at improvements in the creation of new transport and related products; new railway engineering solutions and technologies; better process management; and discovering and using new growth opportunities for railways.
The strategy of diversifying activities is based on the customer requirements, who are interested more than before in the integrated transport and logistics services in Russian and foreign markets. They want to receive services on the principle “from door to door” at a competitive total price for the whole service. This is why the interest in combined transport is growing.
Vadim Morozov,
First Vice President of RZD
[~DETAIL_TEXT] => A Feature of Current Times Is Interoperability
No one has any doubt today that there is a need to strengthen cooperation between railways, shipping companies, logistics business and cargo owners for the sake of better efficiency in international trade and in order to use the benefits of railway transport in such areas as regional economic development, environmental protection and safety.
There is no such railway company which is able to succeed in international combined transport on its own. The result can only be achieved through mutually beneficial cooperation and continuous constructive dialogue with both government authorities and representatives of businesses related to the transport market.
The main challenges lying ahead include making transport systems efficient at junctions, in order to provide free passage for cargoes; to overcoming the negative impacts of the global economic crisis; to enhancing the development of transcontinental freight and using the advantages of railways as much as possible for those countries which do not have access to the sea. The development of interoperability and new logistical technologies is no less important.
Cooperation between RZD and the International Union of Railways is partly helping to solve this problem. Let me remind you that RZD (previously -- USSR Railways) is in the list of UIC founders. However, the participation of the USSR in the UIC was terminated because of the Second World War.
Our full membership of UIC became necessary again at the beginning of the 21st century when RZD entered new markets, started participating in large international investment projects, and had to relationships with railway companies from other countries. It could not go another way, because Russia is a kind of turning circle for Euro-Asian freight and passenger railway traffic, where trains come from all directions in order to continue their journey again in all directions.
As part of the UIC membership, RZD is involved in those strategic projects and UIC programs, which provide a basis for the systematic integration of railway networks of different standards. It also represents and promotes the “Area 1520” interests and fully supports the development of cooperation between OSJD and UIC, which is an effective form of multilateral cooperation between the railways of the East and the West.
Improvements on the network of international transport corridors and their infrastructure can be mentioned among primary priorities for mutual efforts for the sake of the development of both direct railway links and combined transport. Coordinated work across all parts of supply chain is being facilitated using unified cargo classification, new coding methods and software, a wider range of information and satellite technology, and a global rail cargo tracking system.
Here it is important not to forget about the integrated approach to infrastructure issues. Thus, it is necessary to improve traffic safety and to start using new effective methods of protection against unlawful interference. International railway corridors also help to reduce the harmful impact on the environment, compared with motorways (and we must not forget this). Therefore, using rail instead of a fraction of road traffic contributes to the improvement of the environmental situation. This is understood perfectly well in Europe, where combined routes with this participation of railways are given special attention. Such investment projects are considered to be a part of “green” logistics, and therefore they receive priority development. In this respect, Russia would do well to borrow from such a positive experience.
Innovation is the Only Way
The development of combined routes is the way for cargo owners to optimise costs. As a part of the general transport system, the railway sector had to work within the global economic crisis. Industrial enterprises, avoiding financial risks, cut production and reduced the amount of outbound cargo. As a result, freight figures have fallen considerably, which seriously affected the profits and the financial position of the railway industry, both in Russia and in other countries.
We find understanding among colleagues, that the development of transport infrastructure can provide an impetus for economic recovery. Railway transport was, and remains, the backbone of Russia. Consequently, ways to overcome the crisis should have a systematic character and involve state support in infrastructure projects first of all. It is obvious that, in the current conditions, consolidated action and joint efforts by those market participants who are interested in sending their cargoes by railroads, are the only ones able to maintain the position of railways and withstand market competition.
In order to successfully confront those challenges faced by the railways as a result of the global economic crisis, it is necessary to offer better quality traffic to the customers, to provide shorter delivery times, to reduce costs and to find new ways of linking with other parts of the transport chain. The only way to achieve the expected results is innovation, which means systematic application of advanced engineering solutions, the latest materials, cutting edge technologies and efficient services on the railway network.
The Government’s policy of innovation-led development should accelerate stabilisation and create a springboard for the further growth of the national economy. This is the basis to seek ways to increase the efficiency of the railway and its competitiveness in the global transport market. It is precisely combined transport which is giving an additional impetus to the search for new solutions focused on clients’ interests.
Public and Private Investments
In the first half of 2010, RZD’s network has achieved a 12.2% growth in loading figures, compared to the same period of 2009. In spring and summer traffic growth graphs showed a decline. Nevertheless, RZD expects a positive result by the end of 2010. The traffic should be at least 5% up. It is a moderately optimistic scenario. However, the company does not exclude the possibility of a second wave of the global crisis. Events will not necessarily turn out this way, but such discussions are going on at the moment. And you must be prepared for anything, laying plans for various types of risks.
At the same time, the fact that the company has finished the first half of the year without a negative income speaks in favour of the optimistic scenario. Revenue from freight in 2011 is expected to be more than RUR 900 billion. However, on the Russian national market, these figures largely depend on the government’s policies.
The necessity for the State to be involved in the development of infrastructure industries has been reaffirmed many times by international practices, and financial investments in transport infrastructure are the key instrument in the economy’s development after the crisis.
Implementation of such projects contributes to the creation of many thousands of jobs and supports the real economy. “Long” public investments are bounding (“sterilising”) the excessive monetary supply, and, consequently, level the risk of inflation. Finally, infrastructure investments are forming a real foundation for modernising economy, with a view to its recovery, which inevitably follows a period of decline in everything, including in shipping.
It is well known that in many countries the development of railway infrastructure has become a powerful tool to stimulate the economy. China has invested many billions of dollars in the construction of railways. In Europe, Spain, Britain, France and Germany are making a good example having had been increasing their investments in construction of new railways from 2008 to 2010. Projects are being developed in the U.S. to build high-speed railways which are subsidised by the state. This is not all taking place accidentally. Investments in the development of railways provide an enormous multiplying effect because the demand for high-tech production is growing, and the development of transport has a positive impact on the economy.
Another important task that can not be solved without government support is the creation of conditions for the large-scale involvement of private (both domestic and foreign) investment in the industry, including the mechanisms of public-private partnership. This is facilitated by a consistent structural reform in railway transport, due to which RZD really feels an increase in investment activity of rail freight sector.
Considerable opportunities for attracting private investments are being opened by cooperation in the field of terminal and logistics activities. For example, RZD is planning to create up to 100 terminal and logistics facilities across the network, with the assistance of interested Russian and foreign investors. All this creates the conditions for strengthening and improving the system of combined supply chains serving traffic flows.
Assessing the development of railway transport only on the basis of current short-term trends would be a strategic mistake. It is necessary to look to the future and prepare transport infrastructure in advance. Otherwise, there is a risk of shortage of transport capacities when the economy recovers.
The question is what should be the scope for the investment programs? In any case, the approach that industry development takes must be advanced and requires large resources, both financial and intellectual. Here, again, an active role of the state is required. The stability and safety of Russian mainlines, and their ability to provide additional freight, depend on these factors.
The Points of Economic Growth and Breakthrough Projects
It is good bear in mind that The Railway Transport Development Strategy in the Russian Federation Up To 2030 is aimed at the effective development of the Russian railways and their stronger competitiveness on the domestic and international transport markets by means of considerable investments in infrastructure projects and innovations in the freight and passenger traffic.
In accordance with the targets of the Strategic options, 20,700 kilometres of new railway lines are to be built and more than 23,000 locomotives and about one million freight wagons are to be upgraded before 2030. The goals in the modernisation and expansion of the railway network are to create fast lines (a total of 10,900 kilometres), high-speed lines (1,500 kilometres) and passenger and heavy freight lines (13,800 kilometres).
The condition for attracting cargoes on the network of Russian steel lines is development of infrastructure in international transport corridors. In this case, we speak about a better use of the transit potential and unique geographical position of Russia as a transcontinental transport bridge between Europe and Asia, which provides effective international communication, promotes a transition to integrated services which meet international standards and contributes to a number of promising business projects in railway transport.
For example, it is supposed to create a direct railway link with Iran in the framework of international transport corridor North - South, which will make cargo delivery five or seven days faster, compared with a trans-Caspian route. And getting rid of port fees makes it cheaper for shippers.
Given the growing demand and customer requirements, the list of routes for container trains is constantly expanding. A number of new routes were opened late last year, such as Latvia (Riga) - Russia (Kuntsevo-2) and Finland (Buslovskaya) - Russia (Shushary).
Development of container traffic should be among the main growth factors, because the potential transit traffic through the ITC East - West alone is estimated at one million TEUs per year, whereas now traffic figures on this route are in the range of 30,000 TEU to 32,000 TEU.
After the crisis, we paid much attention to the introduction of innovative schemes of cooperation. I shall mention a few strategically important projects initiated by RZD. A project to build a 1520 mm wide railway line on the territory of Slovakia to Bratislava and further on to Vienna together with the creation of logistics infrastructure can become a breakthrough factor for the development of transport links between Europe, CIS countries and China.
After the preliminary substantiation of investments, a Protocol of Early Pre-Work was signed by the railways of Austria, Slovakia, Ukraine and RZD. Construction of this line will increase the attractiveness of supply chains, which include railways. Transportation by the new railway line with a single track width will reduce costs, delivery time and the transport share of the final price of the goods carried.
According to our calculations, cargo delivery time for the return trip from Europe to Asia will be from 13 to14 days. Meanwhile, as regards the territory of Russia, we are planning to implement cargo transits from the eastern borders and ports in just seven days. It is planned that in 2012, speeds on the routes between the stations of Nakhodka and Krasnoye will already be 1.4 kilometres per day, or an average of 58.3 kph.
When the speed of 1.5 km per day is achieved (by 2015, as provided in RZD’s special program, ”The Transsib for Seven Days”), it will take only one week to cover the distance to Brest. However, it is necessary to understand that achieving high delivery speeds must go together with other comprehensive solutions. The service should meet better standards being simultaneously within a competitive price range, and good junctions are to be provided at cargo flow entry and exit points.
Also, brand new transport opportunities are being created through the launch and development of the railway ferry service between Ust-Luga, Baltiysk (Russia) and Sassnitz (Germany). Participation in the management of the national railway system which is characterised by the 1520 mm wide gauge is a no less promising form of international cooperation. All these strategic routes facilitate the appearance of additional branches to be connected, and hence the combined transport chains are being developed.
The adverse macroeconomic conditions must not become the reason for us to abandon our strategic plans, because the crisis has two sides: on one hand, there are risks involved, and on the other hand, there are new opportunities. And so far, there are still enough opportunities for cost optimisation. For example, there can be lower prices for resources consumed and growth in labour supply on the market, and opportunities to upgrade infrastructure at those transport sections which limit throughput. This all is difficult to do in periods of peak traffic volumes.
In order to achieve better efficiency, it is necessary to apply integrated innovative technologies, which are to be aimed at improvements in the creation of new transport and related products; new railway engineering solutions and technologies; better process management; and discovering and using new growth opportunities for railways.
The strategy of diversifying activities is based on the customer requirements, who are interested more than before in the integrated transport and logistics services in Russian and foreign markets. They want to receive services on the principle “from door to door” at a competitive total price for the whole service. This is why the interest in combined transport is growing.
Vadim Morozov,
First Vice President of RZD
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[DETAIL_TEXT] => A Feature of Current Times Is Interoperability
No one has any doubt today that there is a need to strengthen cooperation between railways, shipping companies, logistics business and cargo owners for the sake of better efficiency in international trade and in order to use the benefits of railway transport in such areas as regional economic development, environmental protection and safety.
There is no such railway company which is able to succeed in international combined transport on its own. The result can only be achieved through mutually beneficial cooperation and continuous constructive dialogue with both government authorities and representatives of businesses related to the transport market.
The main challenges lying ahead include making transport systems efficient at junctions, in order to provide free passage for cargoes; to overcoming the negative impacts of the global economic crisis; to enhancing the development of transcontinental freight and using the advantages of railways as much as possible for those countries which do not have access to the sea. The development of interoperability and new logistical technologies is no less important.
Cooperation between RZD and the International Union of Railways is partly helping to solve this problem. Let me remind you that RZD (previously -- USSR Railways) is in the list of UIC founders. However, the participation of the USSR in the UIC was terminated because of the Second World War.
Our full membership of UIC became necessary again at the beginning of the 21st century when RZD entered new markets, started participating in large international investment projects, and had to relationships with railway companies from other countries. It could not go another way, because Russia is a kind of turning circle for Euro-Asian freight and passenger railway traffic, where trains come from all directions in order to continue their journey again in all directions.
As part of the UIC membership, RZD is involved in those strategic projects and UIC programs, which provide a basis for the systematic integration of railway networks of different standards. It also represents and promotes the “Area 1520” interests and fully supports the development of cooperation between OSJD and UIC, which is an effective form of multilateral cooperation between the railways of the East and the West.
Improvements on the network of international transport corridors and their infrastructure can be mentioned among primary priorities for mutual efforts for the sake of the development of both direct railway links and combined transport. Coordinated work across all parts of supply chain is being facilitated using unified cargo classification, new coding methods and software, a wider range of information and satellite technology, and a global rail cargo tracking system.
Here it is important not to forget about the integrated approach to infrastructure issues. Thus, it is necessary to improve traffic safety and to start using new effective methods of protection against unlawful interference. International railway corridors also help to reduce the harmful impact on the environment, compared with motorways (and we must not forget this). Therefore, using rail instead of a fraction of road traffic contributes to the improvement of the environmental situation. This is understood perfectly well in Europe, where combined routes with this participation of railways are given special attention. Such investment projects are considered to be a part of “green” logistics, and therefore they receive priority development. In this respect, Russia would do well to borrow from such a positive experience.
Innovation is the Only Way
The development of combined routes is the way for cargo owners to optimise costs. As a part of the general transport system, the railway sector had to work within the global economic crisis. Industrial enterprises, avoiding financial risks, cut production and reduced the amount of outbound cargo. As a result, freight figures have fallen considerably, which seriously affected the profits and the financial position of the railway industry, both in Russia and in other countries.
We find understanding among colleagues, that the development of transport infrastructure can provide an impetus for economic recovery. Railway transport was, and remains, the backbone of Russia. Consequently, ways to overcome the crisis should have a systematic character and involve state support in infrastructure projects first of all. It is obvious that, in the current conditions, consolidated action and joint efforts by those market participants who are interested in sending their cargoes by railroads, are the only ones able to maintain the position of railways and withstand market competition.
In order to successfully confront those challenges faced by the railways as a result of the global economic crisis, it is necessary to offer better quality traffic to the customers, to provide shorter delivery times, to reduce costs and to find new ways of linking with other parts of the transport chain. The only way to achieve the expected results is innovation, which means systematic application of advanced engineering solutions, the latest materials, cutting edge technologies and efficient services on the railway network.
The Government’s policy of innovation-led development should accelerate stabilisation and create a springboard for the further growth of the national economy. This is the basis to seek ways to increase the efficiency of the railway and its competitiveness in the global transport market. It is precisely combined transport which is giving an additional impetus to the search for new solutions focused on clients’ interests.
Public and Private Investments
In the first half of 2010, RZD’s network has achieved a 12.2% growth in loading figures, compared to the same period of 2009. In spring and summer traffic growth graphs showed a decline. Nevertheless, RZD expects a positive result by the end of 2010. The traffic should be at least 5% up. It is a moderately optimistic scenario. However, the company does not exclude the possibility of a second wave of the global crisis. Events will not necessarily turn out this way, but such discussions are going on at the moment. And you must be prepared for anything, laying plans for various types of risks.
At the same time, the fact that the company has finished the first half of the year without a negative income speaks in favour of the optimistic scenario. Revenue from freight in 2011 is expected to be more than RUR 900 billion. However, on the Russian national market, these figures largely depend on the government’s policies.
The necessity for the State to be involved in the development of infrastructure industries has been reaffirmed many times by international practices, and financial investments in transport infrastructure are the key instrument in the economy’s development after the crisis.
Implementation of such projects contributes to the creation of many thousands of jobs and supports the real economy. “Long” public investments are bounding (“sterilising”) the excessive monetary supply, and, consequently, level the risk of inflation. Finally, infrastructure investments are forming a real foundation for modernising economy, with a view to its recovery, which inevitably follows a period of decline in everything, including in shipping.
It is well known that in many countries the development of railway infrastructure has become a powerful tool to stimulate the economy. China has invested many billions of dollars in the construction of railways. In Europe, Spain, Britain, France and Germany are making a good example having had been increasing their investments in construction of new railways from 2008 to 2010. Projects are being developed in the U.S. to build high-speed railways which are subsidised by the state. This is not all taking place accidentally. Investments in the development of railways provide an enormous multiplying effect because the demand for high-tech production is growing, and the development of transport has a positive impact on the economy.
Another important task that can not be solved without government support is the creation of conditions for the large-scale involvement of private (both domestic and foreign) investment in the industry, including the mechanisms of public-private partnership. This is facilitated by a consistent structural reform in railway transport, due to which RZD really feels an increase in investment activity of rail freight sector.
Considerable opportunities for attracting private investments are being opened by cooperation in the field of terminal and logistics activities. For example, RZD is planning to create up to 100 terminal and logistics facilities across the network, with the assistance of interested Russian and foreign investors. All this creates the conditions for strengthening and improving the system of combined supply chains serving traffic flows.
Assessing the development of railway transport only on the basis of current short-term trends would be a strategic mistake. It is necessary to look to the future and prepare transport infrastructure in advance. Otherwise, there is a risk of shortage of transport capacities when the economy recovers.
The question is what should be the scope for the investment programs? In any case, the approach that industry development takes must be advanced and requires large resources, both financial and intellectual. Here, again, an active role of the state is required. The stability and safety of Russian mainlines, and their ability to provide additional freight, depend on these factors.
The Points of Economic Growth and Breakthrough Projects
It is good bear in mind that The Railway Transport Development Strategy in the Russian Federation Up To 2030 is aimed at the effective development of the Russian railways and their stronger competitiveness on the domestic and international transport markets by means of considerable investments in infrastructure projects and innovations in the freight and passenger traffic.
In accordance with the targets of the Strategic options, 20,700 kilometres of new railway lines are to be built and more than 23,000 locomotives and about one million freight wagons are to be upgraded before 2030. The goals in the modernisation and expansion of the railway network are to create fast lines (a total of 10,900 kilometres), high-speed lines (1,500 kilometres) and passenger and heavy freight lines (13,800 kilometres).
The condition for attracting cargoes on the network of Russian steel lines is development of infrastructure in international transport corridors. In this case, we speak about a better use of the transit potential and unique geographical position of Russia as a transcontinental transport bridge between Europe and Asia, which provides effective international communication, promotes a transition to integrated services which meet international standards and contributes to a number of promising business projects in railway transport.
For example, it is supposed to create a direct railway link with Iran in the framework of international transport corridor North - South, which will make cargo delivery five or seven days faster, compared with a trans-Caspian route. And getting rid of port fees makes it cheaper for shippers.
Given the growing demand and customer requirements, the list of routes for container trains is constantly expanding. A number of new routes were opened late last year, such as Latvia (Riga) - Russia (Kuntsevo-2) and Finland (Buslovskaya) - Russia (Shushary).
Development of container traffic should be among the main growth factors, because the potential transit traffic through the ITC East - West alone is estimated at one million TEUs per year, whereas now traffic figures on this route are in the range of 30,000 TEU to 32,000 TEU.
After the crisis, we paid much attention to the introduction of innovative schemes of cooperation. I shall mention a few strategically important projects initiated by RZD. A project to build a 1520 mm wide railway line on the territory of Slovakia to Bratislava and further on to Vienna together with the creation of logistics infrastructure can become a breakthrough factor for the development of transport links between Europe, CIS countries and China.
After the preliminary substantiation of investments, a Protocol of Early Pre-Work was signed by the railways of Austria, Slovakia, Ukraine and RZD. Construction of this line will increase the attractiveness of supply chains, which include railways. Transportation by the new railway line with a single track width will reduce costs, delivery time and the transport share of the final price of the goods carried.
According to our calculations, cargo delivery time for the return trip from Europe to Asia will be from 13 to14 days. Meanwhile, as regards the territory of Russia, we are planning to implement cargo transits from the eastern borders and ports in just seven days. It is planned that in 2012, speeds on the routes between the stations of Nakhodka and Krasnoye will already be 1.4 kilometres per day, or an average of 58.3 kph.
When the speed of 1.5 km per day is achieved (by 2015, as provided in RZD’s special program, ”The Transsib for Seven Days”), it will take only one week to cover the distance to Brest. However, it is necessary to understand that achieving high delivery speeds must go together with other comprehensive solutions. The service should meet better standards being simultaneously within a competitive price range, and good junctions are to be provided at cargo flow entry and exit points.
Also, brand new transport opportunities are being created through the launch and development of the railway ferry service between Ust-Luga, Baltiysk (Russia) and Sassnitz (Germany). Participation in the management of the national railway system which is characterised by the 1520 mm wide gauge is a no less promising form of international cooperation. All these strategic routes facilitate the appearance of additional branches to be connected, and hence the combined transport chains are being developed.
The adverse macroeconomic conditions must not become the reason for us to abandon our strategic plans, because the crisis has two sides: on one hand, there are risks involved, and on the other hand, there are new opportunities. And so far, there are still enough opportunities for cost optimisation. For example, there can be lower prices for resources consumed and growth in labour supply on the market, and opportunities to upgrade infrastructure at those transport sections which limit throughput. This all is difficult to do in periods of peak traffic volumes.
In order to achieve better efficiency, it is necessary to apply integrated innovative technologies, which are to be aimed at improvements in the creation of new transport and related products; new railway engineering solutions and technologies; better process management; and discovering and using new growth opportunities for railways.
The strategy of diversifying activities is based on the customer requirements, who are interested more than before in the integrated transport and logistics services in Russian and foreign markets. They want to receive services on the principle “from door to door” at a competitive total price for the whole service. This is why the interest in combined transport is growing.
Vadim Morozov,
First Vice President of RZD
[~DETAIL_TEXT] => A Feature of Current Times Is Interoperability
No one has any doubt today that there is a need to strengthen cooperation between railways, shipping companies, logistics business and cargo owners for the sake of better efficiency in international trade and in order to use the benefits of railway transport in such areas as regional economic development, environmental protection and safety.
There is no such railway company which is able to succeed in international combined transport on its own. The result can only be achieved through mutually beneficial cooperation and continuous constructive dialogue with both government authorities and representatives of businesses related to the transport market.
The main challenges lying ahead include making transport systems efficient at junctions, in order to provide free passage for cargoes; to overcoming the negative impacts of the global economic crisis; to enhancing the development of transcontinental freight and using the advantages of railways as much as possible for those countries which do not have access to the sea. The development of interoperability and new logistical technologies is no less important.
Cooperation between RZD and the International Union of Railways is partly helping to solve this problem. Let me remind you that RZD (previously -- USSR Railways) is in the list of UIC founders. However, the participation of the USSR in the UIC was terminated because of the Second World War.
Our full membership of UIC became necessary again at the beginning of the 21st century when RZD entered new markets, started participating in large international investment projects, and had to relationships with railway companies from other countries. It could not go another way, because Russia is a kind of turning circle for Euro-Asian freight and passenger railway traffic, where trains come from all directions in order to continue their journey again in all directions.
As part of the UIC membership, RZD is involved in those strategic projects and UIC programs, which provide a basis for the systematic integration of railway networks of different standards. It also represents and promotes the “Area 1520” interests and fully supports the development of cooperation between OSJD and UIC, which is an effective form of multilateral cooperation between the railways of the East and the West.
Improvements on the network of international transport corridors and their infrastructure can be mentioned among primary priorities for mutual efforts for the sake of the development of both direct railway links and combined transport. Coordinated work across all parts of supply chain is being facilitated using unified cargo classification, new coding methods and software, a wider range of information and satellite technology, and a global rail cargo tracking system.
Here it is important not to forget about the integrated approach to infrastructure issues. Thus, it is necessary to improve traffic safety and to start using new effective methods of protection against unlawful interference. International railway corridors also help to reduce the harmful impact on the environment, compared with motorways (and we must not forget this). Therefore, using rail instead of a fraction of road traffic contributes to the improvement of the environmental situation. This is understood perfectly well in Europe, where combined routes with this participation of railways are given special attention. Such investment projects are considered to be a part of “green” logistics, and therefore they receive priority development. In this respect, Russia would do well to borrow from such a positive experience.
Innovation is the Only Way
The development of combined routes is the way for cargo owners to optimise costs. As a part of the general transport system, the railway sector had to work within the global economic crisis. Industrial enterprises, avoiding financial risks, cut production and reduced the amount of outbound cargo. As a result, freight figures have fallen considerably, which seriously affected the profits and the financial position of the railway industry, both in Russia and in other countries.
We find understanding among colleagues, that the development of transport infrastructure can provide an impetus for economic recovery. Railway transport was, and remains, the backbone of Russia. Consequently, ways to overcome the crisis should have a systematic character and involve state support in infrastructure projects first of all. It is obvious that, in the current conditions, consolidated action and joint efforts by those market participants who are interested in sending their cargoes by railroads, are the only ones able to maintain the position of railways and withstand market competition.
In order to successfully confront those challenges faced by the railways as a result of the global economic crisis, it is necessary to offer better quality traffic to the customers, to provide shorter delivery times, to reduce costs and to find new ways of linking with other parts of the transport chain. The only way to achieve the expected results is innovation, which means systematic application of advanced engineering solutions, the latest materials, cutting edge technologies and efficient services on the railway network.
The Government’s policy of innovation-led development should accelerate stabilisation and create a springboard for the further growth of the national economy. This is the basis to seek ways to increase the efficiency of the railway and its competitiveness in the global transport market. It is precisely combined transport which is giving an additional impetus to the search for new solutions focused on clients’ interests.
Public and Private Investments
In the first half of 2010, RZD’s network has achieved a 12.2% growth in loading figures, compared to the same period of 2009. In spring and summer traffic growth graphs showed a decline. Nevertheless, RZD expects a positive result by the end of 2010. The traffic should be at least 5% up. It is a moderately optimistic scenario. However, the company does not exclude the possibility of a second wave of the global crisis. Events will not necessarily turn out this way, but such discussions are going on at the moment. And you must be prepared for anything, laying plans for various types of risks.
At the same time, the fact that the company has finished the first half of the year without a negative income speaks in favour of the optimistic scenario. Revenue from freight in 2011 is expected to be more than RUR 900 billion. However, on the Russian national market, these figures largely depend on the government’s policies.
The necessity for the State to be involved in the development of infrastructure industries has been reaffirmed many times by international practices, and financial investments in transport infrastructure are the key instrument in the economy’s development after the crisis.
Implementation of such projects contributes to the creation of many thousands of jobs and supports the real economy. “Long” public investments are bounding (“sterilising”) the excessive monetary supply, and, consequently, level the risk of inflation. Finally, infrastructure investments are forming a real foundation for modernising economy, with a view to its recovery, which inevitably follows a period of decline in everything, including in shipping.
It is well known that in many countries the development of railway infrastructure has become a powerful tool to stimulate the economy. China has invested many billions of dollars in the construction of railways. In Europe, Spain, Britain, France and Germany are making a good example having had been increasing their investments in construction of new railways from 2008 to 2010. Projects are being developed in the U.S. to build high-speed railways which are subsidised by the state. This is not all taking place accidentally. Investments in the development of railways provide an enormous multiplying effect because the demand for high-tech production is growing, and the development of transport has a positive impact on the economy.
Another important task that can not be solved without government support is the creation of conditions for the large-scale involvement of private (both domestic and foreign) investment in the industry, including the mechanisms of public-private partnership. This is facilitated by a consistent structural reform in railway transport, due to which RZD really feels an increase in investment activity of rail freight sector.
Considerable opportunities for attracting private investments are being opened by cooperation in the field of terminal and logistics activities. For example, RZD is planning to create up to 100 terminal and logistics facilities across the network, with the assistance of interested Russian and foreign investors. All this creates the conditions for strengthening and improving the system of combined supply chains serving traffic flows.
Assessing the development of railway transport only on the basis of current short-term trends would be a strategic mistake. It is necessary to look to the future and prepare transport infrastructure in advance. Otherwise, there is a risk of shortage of transport capacities when the economy recovers.
The question is what should be the scope for the investment programs? In any case, the approach that industry development takes must be advanced and requires large resources, both financial and intellectual. Here, again, an active role of the state is required. The stability and safety of Russian mainlines, and their ability to provide additional freight, depend on these factors.
The Points of Economic Growth and Breakthrough Projects
It is good bear in mind that The Railway Transport Development Strategy in the Russian Federation Up To 2030 is aimed at the effective development of the Russian railways and their stronger competitiveness on the domestic and international transport markets by means of considerable investments in infrastructure projects and innovations in the freight and passenger traffic.
In accordance with the targets of the Strategic options, 20,700 kilometres of new railway lines are to be built and more than 23,000 locomotives and about one million freight wagons are to be upgraded before 2030. The goals in the modernisation and expansion of the railway network are to create fast lines (a total of 10,900 kilometres), high-speed lines (1,500 kilometres) and passenger and heavy freight lines (13,800 kilometres).
The condition for attracting cargoes on the network of Russian steel lines is development of infrastructure in international transport corridors. In this case, we speak about a better use of the transit potential and unique geographical position of Russia as a transcontinental transport bridge between Europe and Asia, which provides effective international communication, promotes a transition to integrated services which meet international standards and contributes to a number of promising business projects in railway transport.
For example, it is supposed to create a direct railway link with Iran in the framework of international transport corridor North - South, which will make cargo delivery five or seven days faster, compared with a trans-Caspian route. And getting rid of port fees makes it cheaper for shippers.
Given the growing demand and customer requirements, the list of routes for container trains is constantly expanding. A number of new routes were opened late last year, such as Latvia (Riga) - Russia (Kuntsevo-2) and Finland (Buslovskaya) - Russia (Shushary).
Development of container traffic should be among the main growth factors, because the potential transit traffic through the ITC East - West alone is estimated at one million TEUs per year, whereas now traffic figures on this route are in the range of 30,000 TEU to 32,000 TEU.
After the crisis, we paid much attention to the introduction of innovative schemes of cooperation. I shall mention a few strategically important projects initiated by RZD. A project to build a 1520 mm wide railway line on the territory of Slovakia to Bratislava and further on to Vienna together with the creation of logistics infrastructure can become a breakthrough factor for the development of transport links between Europe, CIS countries and China.
After the preliminary substantiation of investments, a Protocol of Early Pre-Work was signed by the railways of Austria, Slovakia, Ukraine and RZD. Construction of this line will increase the attractiveness of supply chains, which include railways. Transportation by the new railway line with a single track width will reduce costs, delivery time and the transport share of the final price of the goods carried.
According to our calculations, cargo delivery time for the return trip from Europe to Asia will be from 13 to14 days. Meanwhile, as regards the territory of Russia, we are planning to implement cargo transits from the eastern borders and ports in just seven days. It is planned that in 2012, speeds on the routes between the stations of Nakhodka and Krasnoye will already be 1.4 kilometres per day, or an average of 58.3 kph.
When the speed of 1.5 km per day is achieved (by 2015, as provided in RZD’s special program, ”The Transsib for Seven Days”), it will take only one week to cover the distance to Brest. However, it is necessary to understand that achieving high delivery speeds must go together with other comprehensive solutions. The service should meet better standards being simultaneously within a competitive price range, and good junctions are to be provided at cargo flow entry and exit points.
Also, brand new transport opportunities are being created through the launch and development of the railway ferry service between Ust-Luga, Baltiysk (Russia) and Sassnitz (Germany). Participation in the management of the national railway system which is characterised by the 1520 mm wide gauge is a no less promising form of international cooperation. All these strategic routes facilitate the appearance of additional branches to be connected, and hence the combined transport chains are being developed.
The adverse macroeconomic conditions must not become the reason for us to abandon our strategic plans, because the crisis has two sides: on one hand, there are risks involved, and on the other hand, there are new opportunities. And so far, there are still enough opportunities for cost optimisation. For example, there can be lower prices for resources consumed and growth in labour supply on the market, and opportunities to upgrade infrastructure at those transport sections which limit throughput. This all is difficult to do in periods of peak traffic volumes.
In order to achieve better efficiency, it is necessary to apply integrated innovative technologies, which are to be aimed at improvements in the creation of new transport and related products; new railway engineering solutions and technologies; better process management; and discovering and using new growth opportunities for railways.
The strategy of diversifying activities is based on the customer requirements, who are interested more than before in the integrated transport and logistics services in Russian and foreign markets. They want to receive services on the principle “from door to door” at a competitive total price for the whole service. This is why the interest in combined transport is growing.
Vadim Morozov,
First Vice President of RZD
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