III КВАРТАЛ 2022Г. - 55 баллов
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[DETAIL_TEXT] => Cargoes in the Range from Minimum to Maximum
The volume of cargo transported via RZD’s network was forecast with regard to the prospects for national social and economic development, including output in basic cargo-generating industries and intensifying the work of the railway network. In accordance with the forecasts, the ways to reach the basic strategic goals for rail transport were selected.
The programme has two phases – to 2015 and to 2020. Two variants – the minimum and maximum ones – were developed. The first envisages a pessimistic outlook on economic growth, at which cargo loading volumes will increase mainly due to the energy sector. In this case, the volume of transportation on the RZD’s network will amount to 1.37 billion tons by 2015 and the cargo turnover – to 2.38 trillion tonne-kilometres; and 1.59 billion tons and 2.7 trillion tonne-kilometres by 2020 respectively.
The second variant envisages a more optimistic outlook on economic growth. Then, the transportation volume will reach 1.49 billion tons by 2015 and the cargo turnover – 2.59 trillion tonne-kilometres; and 1.74 billion tons and 2.98 trillion tonne-kilometres by 2020 respectively. These are the figures, by which the prospects for RZD’s network usage are calculated.
As a result, nine major routes with high concentrations of wagon flows were defined. The most serious increase is expected on the railway approaches to the terminals of the Vanino – the Sovetskaya Gavan transport node (transportation volume here is to grow by 130% before 2015, and by 220% before 2020 (in comparison with 2011 results)), in the North-Western region of Russia (+40% and +60% respectively). Overall, cargo transportation is to grow by 21.6% to 2015, and by 40% to 2020.
Finance Is Badly Needed
In the five years since discussing the previous General Scheme at the meeting of the RZD’s Board on July 27, 2006, almost RUB 1.8 trillion has been invested in the railway infrastructure or RUB 300 billion per annum on average. Thanks to this investment, the length of track sections doubled. In particular, the total length of sections equipped with the automatic block signal system and centralised traffic control system grew by 308 kilometres, and the length of electrified sections increased by 539 kilometres.
Meanwhile, a larger sum was to be allocated to develop the infrastructure – RUB 380 billion per annum. The projects turned out to be badly underfinanced, and that’s why not all bottle-necks have been removed – their length exceeds 6,100 kilometres nowadays. It is just 7.2% of RZD’s network track length, but these sections play a significant role in cargo transportation. Most of them are on the network’s main lines, where almost 80% of the cargo turnover is carried.
Considering the dynamics of future transportation volumes and the lack of finance, the length of overcrowded mainlines will increase to 14,500 kilometres before 2015, and to 19,200 kilometres before 2020. This becomes a serious barrier to GDP’s growth. If it continues at 7-8% (according to the Institute of Economic Forecasting, Russian Academy of Sciences – within the optimistic outlook on economic growth), railway transport will fail to take for transportation 230 million tons of cargo before 2015. This will lose the company RUB 35 billion, and the RF budget will not get RUB 223 billion. By 2020, the network will not be able to service 400 million tons of freight, and the RF budget will not receive RUB 386.5 billion.
Liquidation in Four Directions
The strategy of infrastructure development and bottle-necks removal, laid in the new General Scheme, envisages four key directions. It is what RZD is able to do to mitigate the consequences of the sector’s underinvestment.
The first direction envisages intensification of usage of available fixed assets, wagon turnover growth at key marshalling yards, an increase in train speed and in the output per shunting operation unit. The growth in the average weight of a cargo train envisages an extension of block trains usage for transportation of coal, ore, oil and petrochemicals, metals, fertilisers, and mineral and construction materials, which requires extending receiving and departure tracks based on the following length of trains: loaded ones – to 1,050 metres (71 railcars), empty ones – to 1,500 metres (100 railcars).
To transport the increasing volume of freight, the General Scheme envisages increasing the range of heavy trains. First of all, it must be done on the following lines: Konosha – Chum, Salekhard – Nadym, Volkhovstroy – Murmansk, Sibirskaya – Cherepanovo – Srednesibirskaya, Leninsk-Kuznetsky – Topki – Yurga, Nyandoma – Obozerskaya – Malenga – Belomorsk.
There are serious prospects for ring lines with backhaul. Examples of them are Kostomuksha – Cherepovets, Ekibastuz – Maloreftinskaya, Zhelezorudnaya – Metallurgicheskaya, Kuzbass, Neryungri – Nakhodka-Vostochnaya, Stoilenskaya – Novolipetsk. The average speed of container trains is to grow to 600 km per day by 2020, and within the framework of the “Transsib in 7 Days” project it is to exceed 1,500 km per day.
The next key direction of infrastructure development, according to the new General Scheme, envisages serious renewal of facilities providing train traffic, and development of electrification and automatic block signaling, telemechanics, and communication systems.
The third direction concerns application of schemes to optimise cargo flow re-distribution. It is supposed to allocate sectors where passenger or cargo lines prevail. This will allow RZD to cut expenditure on bottle-necks removal. Cargo flows may be diverted onto parallel railways between such routes as Perm and Kazan, Volkhovstroy and Sonkovo, Kropachevo and Bulguma, between the Main- and Midsiberian rail lines of the West Siberian Railway. Also, the General Scheme envisages formation of lines prioritising passenger transportation: Moscow – St Petersburg, Moscow – Nizhny Novgorod, Moscow – Adler (using the Kursk line), Omsk – Novosibirsk, and international lines between Moscow and Minsk and Moscow and Kiev.
Resources can also be optimised by uniting separate infrastructure projects into complex programmes.
They include complex reconstruction of the Mga – Gatchina – Veimarn – Ivangorod section and railway accesses to ports on the southern shore of the Finnish Gulf, strengthening of the carrying capacity of Volkhovstroy – Murmansk and Dmitrov – Sonkovo – Mga routes, development of the Konosha – Labytnagi section (in case the Nadym – Salekhard line is constructed), reconstruction of the Trubnaya – Verkhny Baskunchak – Aksaraiskaya section and n.a. M. Gorky – Kotelnikovo – Tikhoretskaya – Korenovsk – Timashevskaya – Krymskaya line bypassing the Krasnodar node, and Karymskaya – Zabaikalsk and Tobolsk – Korotchaevo sections; development of the railway infrastructure of the Baikal – Amur Mainline (including the Komsomolsk-on-Amur – Sovetskaya Gavan section) and the Taishet – Mezhdurechensk section.
The General Scheme envisages two high-speed projects. The first is construction of high-speed lines between Moscow and St Petersburg and between Nizhny Novgorod and Kazan with extension to Yekaterinburg (train speed is to reach 300-400 kph) by 2020. The second is organisation of high-speed traffic (at 160-200 kph) on already existing infrastructure between large regional centres: Moscow – Kharkov – Adler, Moscow – Yaroslavl, Moscow – Suzemka – Kiev, Moscow – Krasnoye – Minsk, and Omsk – Novosibirsk, and increasing the maximum speed on the Moscow – Nizhny Novgorod line to 200 kph. As a result, the length of high-speed lines is to reach 1,805 km (for trains running at 300-400 kph speed) and 4,310 km (for those operating at 160-200 kph speed).
The fourth direction of development envisages that tasks of infrastructure development on overcrowded lines should be organised into special projects. Such programmes will require individual solutions.
Strengthening Accesses to Ports and Metropolises
Development of railway access to ports and large transport nodes is included into a separate section of the General Scheme.
Particularly, it envisages:
• Strengthening of the following lines: the Kuzbass – North-West, the Kuzbass – the Black Sea transport node, the Kuzbass – the Far East;
• Extension of the country’s and international transport corridors’ export potential;
• Strengthening of railway access to transport metropolises (Moscow, St Petersburg, Yekaterinburg Saratov);
• Development of the West Siberian oil and gas complex, the Far Eastern economic region, the northern part of the Urals region, and the Lower Angara region;
• Carrying out the programme of railways development to host XXII Olympic Games in Sochi in 2014, the Summer Universiade-2013 in Kazan, and FIFA World Cup in 2018.
This allocation of projects is explained by their vital necessity, but their individual commercial viability is different. For example, to increase the railway carrying capacity at the accesses to the northwestern ports and logistic terminals in the central regions of Russia is profitable. Projects envisaging development of the accesses to southern ports are on the brink of breaking even. The payback period for them is from 8 to 21 years. Meanwhile, projects targeted at development of the railway infrastructure in the eastwards direction are considered lossmaking for RZD. Therefore, individual decisions on the sources of finance will have to be made every time.
Finally, a separate section in the General Scheme is devoted to the set of measures concerning the demand for locomotives. According to it, RUB 754 billion of investment is needed to cope with prospective transportation volume taking into account the need for available fleet renewal. Of that, RUB 465 billion is to be invested in 2016-2020.
Thus, the total sum of investments into development and renewal of infrastructure and the locomotive fleet, envisaged in the General Scheme, exceeds RUB 4.1 trillion. Of that, approximately RUB 1.4 trillion is needed to develop railway infrastructure capacity.
If no state support is provided to railway transport, the target parameters defined in the General Scheme will not be achieved. This will cause revision of the target parameters set by strategic programmes for national economy sectors.
By Alexander Solntsev
[~DETAIL_TEXT] => Cargoes in the Range from Minimum to Maximum
The volume of cargo transported via RZD’s network was forecast with regard to the prospects for national social and economic development, including output in basic cargo-generating industries and intensifying the work of the railway network. In accordance with the forecasts, the ways to reach the basic strategic goals for rail transport were selected.
The programme has two phases – to 2015 and to 2020. Two variants – the minimum and maximum ones – were developed. The first envisages a pessimistic outlook on economic growth, at which cargo loading volumes will increase mainly due to the energy sector. In this case, the volume of transportation on the RZD’s network will amount to 1.37 billion tons by 2015 and the cargo turnover – to 2.38 trillion tonne-kilometres; and 1.59 billion tons and 2.7 trillion tonne-kilometres by 2020 respectively.
The second variant envisages a more optimistic outlook on economic growth. Then, the transportation volume will reach 1.49 billion tons by 2015 and the cargo turnover – 2.59 trillion tonne-kilometres; and 1.74 billion tons and 2.98 trillion tonne-kilometres by 2020 respectively. These are the figures, by which the prospects for RZD’s network usage are calculated.
As a result, nine major routes with high concentrations of wagon flows were defined. The most serious increase is expected on the railway approaches to the terminals of the Vanino – the Sovetskaya Gavan transport node (transportation volume here is to grow by 130% before 2015, and by 220% before 2020 (in comparison with 2011 results)), in the North-Western region of Russia (+40% and +60% respectively). Overall, cargo transportation is to grow by 21.6% to 2015, and by 40% to 2020.
Finance Is Badly Needed
In the five years since discussing the previous General Scheme at the meeting of the RZD’s Board on July 27, 2006, almost RUB 1.8 trillion has been invested in the railway infrastructure or RUB 300 billion per annum on average. Thanks to this investment, the length of track sections doubled. In particular, the total length of sections equipped with the automatic block signal system and centralised traffic control system grew by 308 kilometres, and the length of electrified sections increased by 539 kilometres.
Meanwhile, a larger sum was to be allocated to develop the infrastructure – RUB 380 billion per annum. The projects turned out to be badly underfinanced, and that’s why not all bottle-necks have been removed – their length exceeds 6,100 kilometres nowadays. It is just 7.2% of RZD’s network track length, but these sections play a significant role in cargo transportation. Most of them are on the network’s main lines, where almost 80% of the cargo turnover is carried.
Considering the dynamics of future transportation volumes and the lack of finance, the length of overcrowded mainlines will increase to 14,500 kilometres before 2015, and to 19,200 kilometres before 2020. This becomes a serious barrier to GDP’s growth. If it continues at 7-8% (according to the Institute of Economic Forecasting, Russian Academy of Sciences – within the optimistic outlook on economic growth), railway transport will fail to take for transportation 230 million tons of cargo before 2015. This will lose the company RUB 35 billion, and the RF budget will not get RUB 223 billion. By 2020, the network will not be able to service 400 million tons of freight, and the RF budget will not receive RUB 386.5 billion.
Liquidation in Four Directions
The strategy of infrastructure development and bottle-necks removal, laid in the new General Scheme, envisages four key directions. It is what RZD is able to do to mitigate the consequences of the sector’s underinvestment.
The first direction envisages intensification of usage of available fixed assets, wagon turnover growth at key marshalling yards, an increase in train speed and in the output per shunting operation unit. The growth in the average weight of a cargo train envisages an extension of block trains usage for transportation of coal, ore, oil and petrochemicals, metals, fertilisers, and mineral and construction materials, which requires extending receiving and departure tracks based on the following length of trains: loaded ones – to 1,050 metres (71 railcars), empty ones – to 1,500 metres (100 railcars).
To transport the increasing volume of freight, the General Scheme envisages increasing the range of heavy trains. First of all, it must be done on the following lines: Konosha – Chum, Salekhard – Nadym, Volkhovstroy – Murmansk, Sibirskaya – Cherepanovo – Srednesibirskaya, Leninsk-Kuznetsky – Topki – Yurga, Nyandoma – Obozerskaya – Malenga – Belomorsk.
There are serious prospects for ring lines with backhaul. Examples of them are Kostomuksha – Cherepovets, Ekibastuz – Maloreftinskaya, Zhelezorudnaya – Metallurgicheskaya, Kuzbass, Neryungri – Nakhodka-Vostochnaya, Stoilenskaya – Novolipetsk. The average speed of container trains is to grow to 600 km per day by 2020, and within the framework of the “Transsib in 7 Days” project it is to exceed 1,500 km per day.
The next key direction of infrastructure development, according to the new General Scheme, envisages serious renewal of facilities providing train traffic, and development of electrification and automatic block signaling, telemechanics, and communication systems.
The third direction concerns application of schemes to optimise cargo flow re-distribution. It is supposed to allocate sectors where passenger or cargo lines prevail. This will allow RZD to cut expenditure on bottle-necks removal. Cargo flows may be diverted onto parallel railways between such routes as Perm and Kazan, Volkhovstroy and Sonkovo, Kropachevo and Bulguma, between the Main- and Midsiberian rail lines of the West Siberian Railway. Also, the General Scheme envisages formation of lines prioritising passenger transportation: Moscow – St Petersburg, Moscow – Nizhny Novgorod, Moscow – Adler (using the Kursk line), Omsk – Novosibirsk, and international lines between Moscow and Minsk and Moscow and Kiev.
Resources can also be optimised by uniting separate infrastructure projects into complex programmes.
They include complex reconstruction of the Mga – Gatchina – Veimarn – Ivangorod section and railway accesses to ports on the southern shore of the Finnish Gulf, strengthening of the carrying capacity of Volkhovstroy – Murmansk and Dmitrov – Sonkovo – Mga routes, development of the Konosha – Labytnagi section (in case the Nadym – Salekhard line is constructed), reconstruction of the Trubnaya – Verkhny Baskunchak – Aksaraiskaya section and n.a. M. Gorky – Kotelnikovo – Tikhoretskaya – Korenovsk – Timashevskaya – Krymskaya line bypassing the Krasnodar node, and Karymskaya – Zabaikalsk and Tobolsk – Korotchaevo sections; development of the railway infrastructure of the Baikal – Amur Mainline (including the Komsomolsk-on-Amur – Sovetskaya Gavan section) and the Taishet – Mezhdurechensk section.
The General Scheme envisages two high-speed projects. The first is construction of high-speed lines between Moscow and St Petersburg and between Nizhny Novgorod and Kazan with extension to Yekaterinburg (train speed is to reach 300-400 kph) by 2020. The second is organisation of high-speed traffic (at 160-200 kph) on already existing infrastructure between large regional centres: Moscow – Kharkov – Adler, Moscow – Yaroslavl, Moscow – Suzemka – Kiev, Moscow – Krasnoye – Minsk, and Omsk – Novosibirsk, and increasing the maximum speed on the Moscow – Nizhny Novgorod line to 200 kph. As a result, the length of high-speed lines is to reach 1,805 km (for trains running at 300-400 kph speed) and 4,310 km (for those operating at 160-200 kph speed).
The fourth direction of development envisages that tasks of infrastructure development on overcrowded lines should be organised into special projects. Such programmes will require individual solutions.
Strengthening Accesses to Ports and Metropolises
Development of railway access to ports and large transport nodes is included into a separate section of the General Scheme.
Particularly, it envisages:
• Strengthening of the following lines: the Kuzbass – North-West, the Kuzbass – the Black Sea transport node, the Kuzbass – the Far East;
• Extension of the country’s and international transport corridors’ export potential;
• Strengthening of railway access to transport metropolises (Moscow, St Petersburg, Yekaterinburg Saratov);
• Development of the West Siberian oil and gas complex, the Far Eastern economic region, the northern part of the Urals region, and the Lower Angara region;
• Carrying out the programme of railways development to host XXII Olympic Games in Sochi in 2014, the Summer Universiade-2013 in Kazan, and FIFA World Cup in 2018.
This allocation of projects is explained by their vital necessity, but their individual commercial viability is different. For example, to increase the railway carrying capacity at the accesses to the northwestern ports and logistic terminals in the central regions of Russia is profitable. Projects envisaging development of the accesses to southern ports are on the brink of breaking even. The payback period for them is from 8 to 21 years. Meanwhile, projects targeted at development of the railway infrastructure in the eastwards direction are considered lossmaking for RZD. Therefore, individual decisions on the sources of finance will have to be made every time.
Finally, a separate section in the General Scheme is devoted to the set of measures concerning the demand for locomotives. According to it, RUB 754 billion of investment is needed to cope with prospective transportation volume taking into account the need for available fleet renewal. Of that, RUB 465 billion is to be invested in 2016-2020.
Thus, the total sum of investments into development and renewal of infrastructure and the locomotive fleet, envisaged in the General Scheme, exceeds RUB 4.1 trillion. Of that, approximately RUB 1.4 trillion is needed to develop railway infrastructure capacity.
If no state support is provided to railway transport, the target parameters defined in the General Scheme will not be achieved. This will cause revision of the target parameters set by strategic programmes for national economy sectors.
By Alexander Solntsev
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According to them, the demand for rail transport will have exceeded the carrying capacity of the infrastructure by then. To avoid imbalance and its consequences,
a number of decisions are to be made.
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According to them, the demand for rail transport will have exceeded the carrying capacity of the infrastructure by then. To avoid imbalance and its consequences,
a number of decisions are to be made.
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According to them, the demand for rail transport will have exceeded the carrying capacity of the infrastructure by then. To avoid imbalance and its consequences,
a number of decisions are to be made.
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[DETAIL_TEXT] => Cargoes in the Range from Minimum to Maximum
The volume of cargo transported via RZD’s network was forecast with regard to the prospects for national social and economic development, including output in basic cargo-generating industries and intensifying the work of the railway network. In accordance with the forecasts, the ways to reach the basic strategic goals for rail transport were selected.
The programme has two phases – to 2015 and to 2020. Two variants – the minimum and maximum ones – were developed. The first envisages a pessimistic outlook on economic growth, at which cargo loading volumes will increase mainly due to the energy sector. In this case, the volume of transportation on the RZD’s network will amount to 1.37 billion tons by 2015 and the cargo turnover – to 2.38 trillion tonne-kilometres; and 1.59 billion tons and 2.7 trillion tonne-kilometres by 2020 respectively.
The second variant envisages a more optimistic outlook on economic growth. Then, the transportation volume will reach 1.49 billion tons by 2015 and the cargo turnover – 2.59 trillion tonne-kilometres; and 1.74 billion tons and 2.98 trillion tonne-kilometres by 2020 respectively. These are the figures, by which the prospects for RZD’s network usage are calculated.
As a result, nine major routes with high concentrations of wagon flows were defined. The most serious increase is expected on the railway approaches to the terminals of the Vanino – the Sovetskaya Gavan transport node (transportation volume here is to grow by 130% before 2015, and by 220% before 2020 (in comparison with 2011 results)), in the North-Western region of Russia (+40% and +60% respectively). Overall, cargo transportation is to grow by 21.6% to 2015, and by 40% to 2020.
Finance Is Badly Needed
In the five years since discussing the previous General Scheme at the meeting of the RZD’s Board on July 27, 2006, almost RUB 1.8 trillion has been invested in the railway infrastructure or RUB 300 billion per annum on average. Thanks to this investment, the length of track sections doubled. In particular, the total length of sections equipped with the automatic block signal system and centralised traffic control system grew by 308 kilometres, and the length of electrified sections increased by 539 kilometres.
Meanwhile, a larger sum was to be allocated to develop the infrastructure – RUB 380 billion per annum. The projects turned out to be badly underfinanced, and that’s why not all bottle-necks have been removed – their length exceeds 6,100 kilometres nowadays. It is just 7.2% of RZD’s network track length, but these sections play a significant role in cargo transportation. Most of them are on the network’s main lines, where almost 80% of the cargo turnover is carried.
Considering the dynamics of future transportation volumes and the lack of finance, the length of overcrowded mainlines will increase to 14,500 kilometres before 2015, and to 19,200 kilometres before 2020. This becomes a serious barrier to GDP’s growth. If it continues at 7-8% (according to the Institute of Economic Forecasting, Russian Academy of Sciences – within the optimistic outlook on economic growth), railway transport will fail to take for transportation 230 million tons of cargo before 2015. This will lose the company RUB 35 billion, and the RF budget will not get RUB 223 billion. By 2020, the network will not be able to service 400 million tons of freight, and the RF budget will not receive RUB 386.5 billion.
Liquidation in Four Directions
The strategy of infrastructure development and bottle-necks removal, laid in the new General Scheme, envisages four key directions. It is what RZD is able to do to mitigate the consequences of the sector’s underinvestment.
The first direction envisages intensification of usage of available fixed assets, wagon turnover growth at key marshalling yards, an increase in train speed and in the output per shunting operation unit. The growth in the average weight of a cargo train envisages an extension of block trains usage for transportation of coal, ore, oil and petrochemicals, metals, fertilisers, and mineral and construction materials, which requires extending receiving and departure tracks based on the following length of trains: loaded ones – to 1,050 metres (71 railcars), empty ones – to 1,500 metres (100 railcars).
To transport the increasing volume of freight, the General Scheme envisages increasing the range of heavy trains. First of all, it must be done on the following lines: Konosha – Chum, Salekhard – Nadym, Volkhovstroy – Murmansk, Sibirskaya – Cherepanovo – Srednesibirskaya, Leninsk-Kuznetsky – Topki – Yurga, Nyandoma – Obozerskaya – Malenga – Belomorsk.
There are serious prospects for ring lines with backhaul. Examples of them are Kostomuksha – Cherepovets, Ekibastuz – Maloreftinskaya, Zhelezorudnaya – Metallurgicheskaya, Kuzbass, Neryungri – Nakhodka-Vostochnaya, Stoilenskaya – Novolipetsk. The average speed of container trains is to grow to 600 km per day by 2020, and within the framework of the “Transsib in 7 Days” project it is to exceed 1,500 km per day.
The next key direction of infrastructure development, according to the new General Scheme, envisages serious renewal of facilities providing train traffic, and development of electrification and automatic block signaling, telemechanics, and communication systems.
The third direction concerns application of schemes to optimise cargo flow re-distribution. It is supposed to allocate sectors where passenger or cargo lines prevail. This will allow RZD to cut expenditure on bottle-necks removal. Cargo flows may be diverted onto parallel railways between such routes as Perm and Kazan, Volkhovstroy and Sonkovo, Kropachevo and Bulguma, between the Main- and Midsiberian rail lines of the West Siberian Railway. Also, the General Scheme envisages formation of lines prioritising passenger transportation: Moscow – St Petersburg, Moscow – Nizhny Novgorod, Moscow – Adler (using the Kursk line), Omsk – Novosibirsk, and international lines between Moscow and Minsk and Moscow and Kiev.
Resources can also be optimised by uniting separate infrastructure projects into complex programmes.
They include complex reconstruction of the Mga – Gatchina – Veimarn – Ivangorod section and railway accesses to ports on the southern shore of the Finnish Gulf, strengthening of the carrying capacity of Volkhovstroy – Murmansk and Dmitrov – Sonkovo – Mga routes, development of the Konosha – Labytnagi section (in case the Nadym – Salekhard line is constructed), reconstruction of the Trubnaya – Verkhny Baskunchak – Aksaraiskaya section and n.a. M. Gorky – Kotelnikovo – Tikhoretskaya – Korenovsk – Timashevskaya – Krymskaya line bypassing the Krasnodar node, and Karymskaya – Zabaikalsk and Tobolsk – Korotchaevo sections; development of the railway infrastructure of the Baikal – Amur Mainline (including the Komsomolsk-on-Amur – Sovetskaya Gavan section) and the Taishet – Mezhdurechensk section.
The General Scheme envisages two high-speed projects. The first is construction of high-speed lines between Moscow and St Petersburg and between Nizhny Novgorod and Kazan with extension to Yekaterinburg (train speed is to reach 300-400 kph) by 2020. The second is organisation of high-speed traffic (at 160-200 kph) on already existing infrastructure between large regional centres: Moscow – Kharkov – Adler, Moscow – Yaroslavl, Moscow – Suzemka – Kiev, Moscow – Krasnoye – Minsk, and Omsk – Novosibirsk, and increasing the maximum speed on the Moscow – Nizhny Novgorod line to 200 kph. As a result, the length of high-speed lines is to reach 1,805 km (for trains running at 300-400 kph speed) and 4,310 km (for those operating at 160-200 kph speed).
The fourth direction of development envisages that tasks of infrastructure development on overcrowded lines should be organised into special projects. Such programmes will require individual solutions.
Strengthening Accesses to Ports and Metropolises
Development of railway access to ports and large transport nodes is included into a separate section of the General Scheme.
Particularly, it envisages:
• Strengthening of the following lines: the Kuzbass – North-West, the Kuzbass – the Black Sea transport node, the Kuzbass – the Far East;
• Extension of the country’s and international transport corridors’ export potential;
• Strengthening of railway access to transport metropolises (Moscow, St Petersburg, Yekaterinburg Saratov);
• Development of the West Siberian oil and gas complex, the Far Eastern economic region, the northern part of the Urals region, and the Lower Angara region;
• Carrying out the programme of railways development to host XXII Olympic Games in Sochi in 2014, the Summer Universiade-2013 in Kazan, and FIFA World Cup in 2018.
This allocation of projects is explained by their vital necessity, but their individual commercial viability is different. For example, to increase the railway carrying capacity at the accesses to the northwestern ports and logistic terminals in the central regions of Russia is profitable. Projects envisaging development of the accesses to southern ports are on the brink of breaking even. The payback period for them is from 8 to 21 years. Meanwhile, projects targeted at development of the railway infrastructure in the eastwards direction are considered lossmaking for RZD. Therefore, individual decisions on the sources of finance will have to be made every time.
Finally, a separate section in the General Scheme is devoted to the set of measures concerning the demand for locomotives. According to it, RUB 754 billion of investment is needed to cope with prospective transportation volume taking into account the need for available fleet renewal. Of that, RUB 465 billion is to be invested in 2016-2020.
Thus, the total sum of investments into development and renewal of infrastructure and the locomotive fleet, envisaged in the General Scheme, exceeds RUB 4.1 trillion. Of that, approximately RUB 1.4 trillion is needed to develop railway infrastructure capacity.
If no state support is provided to railway transport, the target parameters defined in the General Scheme will not be achieved. This will cause revision of the target parameters set by strategic programmes for national economy sectors.
By Alexander Solntsev
[~DETAIL_TEXT] => Cargoes in the Range from Minimum to Maximum
The volume of cargo transported via RZD’s network was forecast with regard to the prospects for national social and economic development, including output in basic cargo-generating industries and intensifying the work of the railway network. In accordance with the forecasts, the ways to reach the basic strategic goals for rail transport were selected.
The programme has two phases – to 2015 and to 2020. Two variants – the minimum and maximum ones – were developed. The first envisages a pessimistic outlook on economic growth, at which cargo loading volumes will increase mainly due to the energy sector. In this case, the volume of transportation on the RZD’s network will amount to 1.37 billion tons by 2015 and the cargo turnover – to 2.38 trillion tonne-kilometres; and 1.59 billion tons and 2.7 trillion tonne-kilometres by 2020 respectively.
The second variant envisages a more optimistic outlook on economic growth. Then, the transportation volume will reach 1.49 billion tons by 2015 and the cargo turnover – 2.59 trillion tonne-kilometres; and 1.74 billion tons and 2.98 trillion tonne-kilometres by 2020 respectively. These are the figures, by which the prospects for RZD’s network usage are calculated.
As a result, nine major routes with high concentrations of wagon flows were defined. The most serious increase is expected on the railway approaches to the terminals of the Vanino – the Sovetskaya Gavan transport node (transportation volume here is to grow by 130% before 2015, and by 220% before 2020 (in comparison with 2011 results)), in the North-Western region of Russia (+40% and +60% respectively). Overall, cargo transportation is to grow by 21.6% to 2015, and by 40% to 2020.
Finance Is Badly Needed
In the five years since discussing the previous General Scheme at the meeting of the RZD’s Board on July 27, 2006, almost RUB 1.8 trillion has been invested in the railway infrastructure or RUB 300 billion per annum on average. Thanks to this investment, the length of track sections doubled. In particular, the total length of sections equipped with the automatic block signal system and centralised traffic control system grew by 308 kilometres, and the length of electrified sections increased by 539 kilometres.
Meanwhile, a larger sum was to be allocated to develop the infrastructure – RUB 380 billion per annum. The projects turned out to be badly underfinanced, and that’s why not all bottle-necks have been removed – their length exceeds 6,100 kilometres nowadays. It is just 7.2% of RZD’s network track length, but these sections play a significant role in cargo transportation. Most of them are on the network’s main lines, where almost 80% of the cargo turnover is carried.
Considering the dynamics of future transportation volumes and the lack of finance, the length of overcrowded mainlines will increase to 14,500 kilometres before 2015, and to 19,200 kilometres before 2020. This becomes a serious barrier to GDP’s growth. If it continues at 7-8% (according to the Institute of Economic Forecasting, Russian Academy of Sciences – within the optimistic outlook on economic growth), railway transport will fail to take for transportation 230 million tons of cargo before 2015. This will lose the company RUB 35 billion, and the RF budget will not get RUB 223 billion. By 2020, the network will not be able to service 400 million tons of freight, and the RF budget will not receive RUB 386.5 billion.
Liquidation in Four Directions
The strategy of infrastructure development and bottle-necks removal, laid in the new General Scheme, envisages four key directions. It is what RZD is able to do to mitigate the consequences of the sector’s underinvestment.
The first direction envisages intensification of usage of available fixed assets, wagon turnover growth at key marshalling yards, an increase in train speed and in the output per shunting operation unit. The growth in the average weight of a cargo train envisages an extension of block trains usage for transportation of coal, ore, oil and petrochemicals, metals, fertilisers, and mineral and construction materials, which requires extending receiving and departure tracks based on the following length of trains: loaded ones – to 1,050 metres (71 railcars), empty ones – to 1,500 metres (100 railcars).
To transport the increasing volume of freight, the General Scheme envisages increasing the range of heavy trains. First of all, it must be done on the following lines: Konosha – Chum, Salekhard – Nadym, Volkhovstroy – Murmansk, Sibirskaya – Cherepanovo – Srednesibirskaya, Leninsk-Kuznetsky – Topki – Yurga, Nyandoma – Obozerskaya – Malenga – Belomorsk.
There are serious prospects for ring lines with backhaul. Examples of them are Kostomuksha – Cherepovets, Ekibastuz – Maloreftinskaya, Zhelezorudnaya – Metallurgicheskaya, Kuzbass, Neryungri – Nakhodka-Vostochnaya, Stoilenskaya – Novolipetsk. The average speed of container trains is to grow to 600 km per day by 2020, and within the framework of the “Transsib in 7 Days” project it is to exceed 1,500 km per day.
The next key direction of infrastructure development, according to the new General Scheme, envisages serious renewal of facilities providing train traffic, and development of electrification and automatic block signaling, telemechanics, and communication systems.
The third direction concerns application of schemes to optimise cargo flow re-distribution. It is supposed to allocate sectors where passenger or cargo lines prevail. This will allow RZD to cut expenditure on bottle-necks removal. Cargo flows may be diverted onto parallel railways between such routes as Perm and Kazan, Volkhovstroy and Sonkovo, Kropachevo and Bulguma, between the Main- and Midsiberian rail lines of the West Siberian Railway. Also, the General Scheme envisages formation of lines prioritising passenger transportation: Moscow – St Petersburg, Moscow – Nizhny Novgorod, Moscow – Adler (using the Kursk line), Omsk – Novosibirsk, and international lines between Moscow and Minsk and Moscow and Kiev.
Resources can also be optimised by uniting separate infrastructure projects into complex programmes.
They include complex reconstruction of the Mga – Gatchina – Veimarn – Ivangorod section and railway accesses to ports on the southern shore of the Finnish Gulf, strengthening of the carrying capacity of Volkhovstroy – Murmansk and Dmitrov – Sonkovo – Mga routes, development of the Konosha – Labytnagi section (in case the Nadym – Salekhard line is constructed), reconstruction of the Trubnaya – Verkhny Baskunchak – Aksaraiskaya section and n.a. M. Gorky – Kotelnikovo – Tikhoretskaya – Korenovsk – Timashevskaya – Krymskaya line bypassing the Krasnodar node, and Karymskaya – Zabaikalsk and Tobolsk – Korotchaevo sections; development of the railway infrastructure of the Baikal – Amur Mainline (including the Komsomolsk-on-Amur – Sovetskaya Gavan section) and the Taishet – Mezhdurechensk section.
The General Scheme envisages two high-speed projects. The first is construction of high-speed lines between Moscow and St Petersburg and between Nizhny Novgorod and Kazan with extension to Yekaterinburg (train speed is to reach 300-400 kph) by 2020. The second is organisation of high-speed traffic (at 160-200 kph) on already existing infrastructure between large regional centres: Moscow – Kharkov – Adler, Moscow – Yaroslavl, Moscow – Suzemka – Kiev, Moscow – Krasnoye – Minsk, and Omsk – Novosibirsk, and increasing the maximum speed on the Moscow – Nizhny Novgorod line to 200 kph. As a result, the length of high-speed lines is to reach 1,805 km (for trains running at 300-400 kph speed) and 4,310 km (for those operating at 160-200 kph speed).
The fourth direction of development envisages that tasks of infrastructure development on overcrowded lines should be organised into special projects. Such programmes will require individual solutions.
Strengthening Accesses to Ports and Metropolises
Development of railway access to ports and large transport nodes is included into a separate section of the General Scheme.
Particularly, it envisages:
• Strengthening of the following lines: the Kuzbass – North-West, the Kuzbass – the Black Sea transport node, the Kuzbass – the Far East;
• Extension of the country’s and international transport corridors’ export potential;
• Strengthening of railway access to transport metropolises (Moscow, St Petersburg, Yekaterinburg Saratov);
• Development of the West Siberian oil and gas complex, the Far Eastern economic region, the northern part of the Urals region, and the Lower Angara region;
• Carrying out the programme of railways development to host XXII Olympic Games in Sochi in 2014, the Summer Universiade-2013 in Kazan, and FIFA World Cup in 2018.
This allocation of projects is explained by their vital necessity, but their individual commercial viability is different. For example, to increase the railway carrying capacity at the accesses to the northwestern ports and logistic terminals in the central regions of Russia is profitable. Projects envisaging development of the accesses to southern ports are on the brink of breaking even. The payback period for them is from 8 to 21 years. Meanwhile, projects targeted at development of the railway infrastructure in the eastwards direction are considered lossmaking for RZD. Therefore, individual decisions on the sources of finance will have to be made every time.
Finally, a separate section in the General Scheme is devoted to the set of measures concerning the demand for locomotives. According to it, RUB 754 billion of investment is needed to cope with prospective transportation volume taking into account the need for available fleet renewal. Of that, RUB 465 billion is to be invested in 2016-2020.
Thus, the total sum of investments into development and renewal of infrastructure and the locomotive fleet, envisaged in the General Scheme, exceeds RUB 4.1 trillion. Of that, approximately RUB 1.4 trillion is needed to develop railway infrastructure capacity.
If no state support is provided to railway transport, the target parameters defined in the General Scheme will not be achieved. This will cause revision of the target parameters set by strategic programmes for national economy sectors.
By Alexander Solntsev
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a number of decisions are to be made.
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Russian Railways have presented the draft Concept of Terminal and Logistic Centres Creation, which envisages organisation of a scaled logistic business using “on time” and “door-to-door” models. Experts think, however, that the concept may not be carried out 100% because of the project financing risks.Array
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[DETAIL_TEXT] => To Sea Port via Railway One
Specialists at the Hong Kong Logistic Research Centre think that Russia comes third from the bottom of the list of the Asian –
Pacific Economic Cooperation member states according to the quality of terminal and logistic services. It is above only Indonesia and Peru. Given the existing limitations of the Russian railway infrastructure, an obvious step to restrain the increase in its consumers’ costs is development of optimal supply chains. Most available facilities of RZD’s terminal and warehousing complex were constructed during the planned economy period. The concept of their location as well as the lion’s share of fixed assets have become outdated by now. A lot of the facilities are low-density due to the changes which happened in the national economy. From the structure of manufacturing capacities in the regions, the requirements for storage conditions and cargo delivery, to the opportunities of technological equipment, the level and range of services have transformed. Fixed assets depreciation reaches 85% for lifting and transport equipment, and 80% for immovable property. RZD has practically left the market of small shipments. Their number reduced from 25,000 in 2003 to 5,000 in 2011 (-80%).
Nowadays, an important part of RZD’s development is creation of a stable client base. To extend the range of services provided on the railway network the company has developed the draft Concept of Terminal and Logistic Centres Creation in the RF. The document is based on the basic statements of the Strategy of Railway Transport Development, the Concept of Complex Development of Container Business in RZD Holding Company and other programme documents.
A priority of the Concept is to establish a basic network of 10 terminal and logistic centres (TLC) with the total handling capacity of over 70 million tons per annum. These are Baltiysk, Taman, and Primorsk railway ports, Bely Rast TLC, terminal and logistic centres in Yekaterinburg, Novosibirsk, Nizhny Novgorod, Kazan, Kaliningrad, and Volgograd transport nodes. A typical business model of projects of separate TLC creation envisages participation of a project company – developer that will form assets for exploitation and renting to operators. According to preliminary evaluations, the total investment needed to create the basic network is more than RUB 360 billion. And the cost of the first phase of the project (plus eight TLCs in Khabarovsk, Samara, Voronezh, Bryansk, Kirov, Ufa, Ulan-Ude, and Krasnoyarsk) is about RUB 560 billion.
Together with the creation of new terminal infrastructure, the Concept defines the location of operating rail yards. There are 577 such facilities now working on RZD’s network. They will play the role of satellites – they will form a local network to support the portfolio of services provided by the regional TLC by means of infrastructure specialization, provision of unique services, etc.
The choice of the basic network of TLC location takes into account the plan of actions to prepare for and host the FIFA World Cup in 2018. Bely Rast will be the pilot project. Organisation of the network-wide project company’s activity and management mechanisms will be tested on it. The success or the failure of the pilot project may influence the realization of further plans. Therefore, an important organizational aspect is formation of the competence centre. In the opinion of specialists, its functions during the current phase must be fulfilled by the Central Directorate for Terminal and Warehousing Complex Management.
Logistic Keynote
Construction of terminal and logistic centres in Russia envisages a number of system solutions. Firstly, the network principle states the presence of a definite hierarchy and specifics of functional purpose for every type of facility – a railway port, a TLC inside the country, or a satellite. Secondly, it is necessary to launch a regular container (and on some lines - piggyback) traffic on the so-called passenger principle. It means launching regular trains on schedule (including terminal services) on special train paths. This may be achieved through concluding a contract between the organiser of the trains and Russian Railways, where mutual liabilities for payment, train loading, and working on schedule are fixed. Thirdly, a definite integration of customs infrastructure is to take place: a TLC must include centres for customs registration of freight (a customs post, a temporary storage warehouse). This will allow centralising export and import cargo flows in transport nodes and concentrating all types of customs activity in one place, comfortable for a client.
According to Salman Babayev, Vice President of RZD, marketing analysis was used to define the structure and the volume of the target market of the TLC network. These are general and containerised cargoes carried now by road haulages and handled at loading bays in industrial complexes. No doubt, services provided by terminal and logistic centres will attract owners of expensive high-tech cargo, components, and consumer goods (especially in international transportation). The target market is estimated at 250-300 million tons per annum.
Mr Babayev noted that the idea of RZD’s gradual winding down of handling containers on railway accesses to industrial enterprises has been updated. In fact, the company must act as a wagon transporter, i.e. receive not a container for transportation, but a railcar with a container onboard. As a result, the Central Directorate for Terminal and Warehousing Complex Management and RZD Logistics must become subsidiaries of RZD, the business of which will be provision of terminal services, “door-to-door” services, storage, loading and unloading operations, packaging, transportation of small batches, etc.
In the words of Sergey Khronopulo, Chief of the Central Directorate for Terminal and Warehousing Complex Management at RZD, a terminal as a logistic infrastructure unit will be a sort of interface, between a consignor and the railway. If the interface is convenient, it will attract clients. Otherwise, they will find an alternative, i.e. other ways to deliver their freight.
An important factor for attracting cargo owners to the railway is provision of non-discriminating access to the TLC infrastructure. “We must take into account the needs of every specialised operator and provide efficient functioning of a terminal and logistic centre as a single technological complex and an integrated element of the logistic network. It seems that in the current phase of the reform of RZD, this goal may be achieved through RZD’s Central Directorate for Terminal and Warehousing Complex Management occupying a dominating market position in the sector of terminal and warehousing services on the network. This will also allow provision of a single technological and tariff policy when forming the TLC network,” Mr Khronopulo believes.
Risk of Conflict of Interests
The analysis of basic risks, according to Mr Babayev, has shown a high level of the project’s dependence on attracting serious investment from different sources. Investors will get an opportunity to capital into project companies, which will construct terminals and rent warehouses to railway operators later.
Risk hedging envisages creation of an efficient mechanism to manage the project. For that, turnover limitations should be removed from the terminal and warehousing complex facilities, which are to be upgraded or reconstructed. Simultaneously, the Concept of Customs Control and Customs Registration in Places Close the RF State Border, and in particular its section concerning railway transport exploitation, is to be developed and adjusted with specialised departments (the Ministry of Transport, the Ministry of Economic Development, the Federal Customs Service, etc). The developed Concept will be influenced by a number of other concepts – piggyback transportation organisation, terminal and logistic centres complex safety, logistic activity informational support, etc.
Anatoly Fedorenko, Head of Department of Logistic Infrastructure Management of the National Research University “Higher School of Economics”, warns that when developing such projects, one should take into account the conflict of interests of logistic operators and the managing company of the TLC. An investor (the managing company) invests funds on the rational sufficiency principle; he is interested in the object’s low construction cost price and strives to find a universal logistic solution to meet the requirements of servicing the maximum number of market players.
A consumer (a logistic operator) is not interested in investment; he avoids long-term investment into non-core assets. The owner of infrastructure wants to sell his services with maximum profitability, and logistic operators set themselves targets to buy these services at the lowest prices. In turn, cargo owners make efforts to reduce tariff rates on logistics and to get high-quality services.
Contradictions may arise when the rent contracts are concluded. Operators, as a rule, prefer to conclude one- or two-year contracts with possible prolongation, and a managing company strives at concluding a contract on rent or consignment storage for the entire payback period (approximately 5-7 years).
By Oksana Perepelitsa
[~DETAIL_TEXT] => To Sea Port via Railway One
Specialists at the Hong Kong Logistic Research Centre think that Russia comes third from the bottom of the list of the Asian –
Pacific Economic Cooperation member states according to the quality of terminal and logistic services. It is above only Indonesia and Peru. Given the existing limitations of the Russian railway infrastructure, an obvious step to restrain the increase in its consumers’ costs is development of optimal supply chains. Most available facilities of RZD’s terminal and warehousing complex were constructed during the planned economy period. The concept of their location as well as the lion’s share of fixed assets have become outdated by now. A lot of the facilities are low-density due to the changes which happened in the national economy. From the structure of manufacturing capacities in the regions, the requirements for storage conditions and cargo delivery, to the opportunities of technological equipment, the level and range of services have transformed. Fixed assets depreciation reaches 85% for lifting and transport equipment, and 80% for immovable property. RZD has practically left the market of small shipments. Their number reduced from 25,000 in 2003 to 5,000 in 2011 (-80%).
Nowadays, an important part of RZD’s development is creation of a stable client base. To extend the range of services provided on the railway network the company has developed the draft Concept of Terminal and Logistic Centres Creation in the RF. The document is based on the basic statements of the Strategy of Railway Transport Development, the Concept of Complex Development of Container Business in RZD Holding Company and other programme documents.
A priority of the Concept is to establish a basic network of 10 terminal and logistic centres (TLC) with the total handling capacity of over 70 million tons per annum. These are Baltiysk, Taman, and Primorsk railway ports, Bely Rast TLC, terminal and logistic centres in Yekaterinburg, Novosibirsk, Nizhny Novgorod, Kazan, Kaliningrad, and Volgograd transport nodes. A typical business model of projects of separate TLC creation envisages participation of a project company – developer that will form assets for exploitation and renting to operators. According to preliminary evaluations, the total investment needed to create the basic network is more than RUB 360 billion. And the cost of the first phase of the project (plus eight TLCs in Khabarovsk, Samara, Voronezh, Bryansk, Kirov, Ufa, Ulan-Ude, and Krasnoyarsk) is about RUB 560 billion.
Together with the creation of new terminal infrastructure, the Concept defines the location of operating rail yards. There are 577 such facilities now working on RZD’s network. They will play the role of satellites – they will form a local network to support the portfolio of services provided by the regional TLC by means of infrastructure specialization, provision of unique services, etc.
The choice of the basic network of TLC location takes into account the plan of actions to prepare for and host the FIFA World Cup in 2018. Bely Rast will be the pilot project. Organisation of the network-wide project company’s activity and management mechanisms will be tested on it. The success or the failure of the pilot project may influence the realization of further plans. Therefore, an important organizational aspect is formation of the competence centre. In the opinion of specialists, its functions during the current phase must be fulfilled by the Central Directorate for Terminal and Warehousing Complex Management.
Logistic Keynote
Construction of terminal and logistic centres in Russia envisages a number of system solutions. Firstly, the network principle states the presence of a definite hierarchy and specifics of functional purpose for every type of facility – a railway port, a TLC inside the country, or a satellite. Secondly, it is necessary to launch a regular container (and on some lines - piggyback) traffic on the so-called passenger principle. It means launching regular trains on schedule (including terminal services) on special train paths. This may be achieved through concluding a contract between the organiser of the trains and Russian Railways, where mutual liabilities for payment, train loading, and working on schedule are fixed. Thirdly, a definite integration of customs infrastructure is to take place: a TLC must include centres for customs registration of freight (a customs post, a temporary storage warehouse). This will allow centralising export and import cargo flows in transport nodes and concentrating all types of customs activity in one place, comfortable for a client.
According to Salman Babayev, Vice President of RZD, marketing analysis was used to define the structure and the volume of the target market of the TLC network. These are general and containerised cargoes carried now by road haulages and handled at loading bays in industrial complexes. No doubt, services provided by terminal and logistic centres will attract owners of expensive high-tech cargo, components, and consumer goods (especially in international transportation). The target market is estimated at 250-300 million tons per annum.
Mr Babayev noted that the idea of RZD’s gradual winding down of handling containers on railway accesses to industrial enterprises has been updated. In fact, the company must act as a wagon transporter, i.e. receive not a container for transportation, but a railcar with a container onboard. As a result, the Central Directorate for Terminal and Warehousing Complex Management and RZD Logistics must become subsidiaries of RZD, the business of which will be provision of terminal services, “door-to-door” services, storage, loading and unloading operations, packaging, transportation of small batches, etc.
In the words of Sergey Khronopulo, Chief of the Central Directorate for Terminal and Warehousing Complex Management at RZD, a terminal as a logistic infrastructure unit will be a sort of interface, between a consignor and the railway. If the interface is convenient, it will attract clients. Otherwise, they will find an alternative, i.e. other ways to deliver their freight.
An important factor for attracting cargo owners to the railway is provision of non-discriminating access to the TLC infrastructure. “We must take into account the needs of every specialised operator and provide efficient functioning of a terminal and logistic centre as a single technological complex and an integrated element of the logistic network. It seems that in the current phase of the reform of RZD, this goal may be achieved through RZD’s Central Directorate for Terminal and Warehousing Complex Management occupying a dominating market position in the sector of terminal and warehousing services on the network. This will also allow provision of a single technological and tariff policy when forming the TLC network,” Mr Khronopulo believes.
Risk of Conflict of Interests
The analysis of basic risks, according to Mr Babayev, has shown a high level of the project’s dependence on attracting serious investment from different sources. Investors will get an opportunity to capital into project companies, which will construct terminals and rent warehouses to railway operators later.
Risk hedging envisages creation of an efficient mechanism to manage the project. For that, turnover limitations should be removed from the terminal and warehousing complex facilities, which are to be upgraded or reconstructed. Simultaneously, the Concept of Customs Control and Customs Registration in Places Close the RF State Border, and in particular its section concerning railway transport exploitation, is to be developed and adjusted with specialised departments (the Ministry of Transport, the Ministry of Economic Development, the Federal Customs Service, etc). The developed Concept will be influenced by a number of other concepts – piggyback transportation organisation, terminal and logistic centres complex safety, logistic activity informational support, etc.
Anatoly Fedorenko, Head of Department of Logistic Infrastructure Management of the National Research University “Higher School of Economics”, warns that when developing such projects, one should take into account the conflict of interests of logistic operators and the managing company of the TLC. An investor (the managing company) invests funds on the rational sufficiency principle; he is interested in the object’s low construction cost price and strives to find a universal logistic solution to meet the requirements of servicing the maximum number of market players.
A consumer (a logistic operator) is not interested in investment; he avoids long-term investment into non-core assets. The owner of infrastructure wants to sell his services with maximum profitability, and logistic operators set themselves targets to buy these services at the lowest prices. In turn, cargo owners make efforts to reduce tariff rates on logistics and to get high-quality services.
Contradictions may arise when the rent contracts are concluded. Operators, as a rule, prefer to conclude one- or two-year contracts with possible prolongation, and a managing company strives at concluding a contract on rent or consignment storage for the entire payback period (approximately 5-7 years).
By Oksana Perepelitsa
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/3/14.jpg" border="1" alt=" " hspace="5" width="300" height="231" align="left" />Russian Railways have presented the draft Concept of Terminal and Logistic Centres Creation, which envisages organisation of a scaled logistic business using “on time” and “door-to-door” models. Experts think, however, that the concept may not be carried out 100% because of the project financing risks.
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[DETAIL_TEXT] => To Sea Port via Railway One
Specialists at the Hong Kong Logistic Research Centre think that Russia comes third from the bottom of the list of the Asian –
Pacific Economic Cooperation member states according to the quality of terminal and logistic services. It is above only Indonesia and Peru. Given the existing limitations of the Russian railway infrastructure, an obvious step to restrain the increase in its consumers’ costs is development of optimal supply chains. Most available facilities of RZD’s terminal and warehousing complex were constructed during the planned economy period. The concept of their location as well as the lion’s share of fixed assets have become outdated by now. A lot of the facilities are low-density due to the changes which happened in the national economy. From the structure of manufacturing capacities in the regions, the requirements for storage conditions and cargo delivery, to the opportunities of technological equipment, the level and range of services have transformed. Fixed assets depreciation reaches 85% for lifting and transport equipment, and 80% for immovable property. RZD has practically left the market of small shipments. Their number reduced from 25,000 in 2003 to 5,000 in 2011 (-80%).
Nowadays, an important part of RZD’s development is creation of a stable client base. To extend the range of services provided on the railway network the company has developed the draft Concept of Terminal and Logistic Centres Creation in the RF. The document is based on the basic statements of the Strategy of Railway Transport Development, the Concept of Complex Development of Container Business in RZD Holding Company and other programme documents.
A priority of the Concept is to establish a basic network of 10 terminal and logistic centres (TLC) with the total handling capacity of over 70 million tons per annum. These are Baltiysk, Taman, and Primorsk railway ports, Bely Rast TLC, terminal and logistic centres in Yekaterinburg, Novosibirsk, Nizhny Novgorod, Kazan, Kaliningrad, and Volgograd transport nodes. A typical business model of projects of separate TLC creation envisages participation of a project company – developer that will form assets for exploitation and renting to operators. According to preliminary evaluations, the total investment needed to create the basic network is more than RUB 360 billion. And the cost of the first phase of the project (plus eight TLCs in Khabarovsk, Samara, Voronezh, Bryansk, Kirov, Ufa, Ulan-Ude, and Krasnoyarsk) is about RUB 560 billion.
Together with the creation of new terminal infrastructure, the Concept defines the location of operating rail yards. There are 577 such facilities now working on RZD’s network. They will play the role of satellites – they will form a local network to support the portfolio of services provided by the regional TLC by means of infrastructure specialization, provision of unique services, etc.
The choice of the basic network of TLC location takes into account the plan of actions to prepare for and host the FIFA World Cup in 2018. Bely Rast will be the pilot project. Organisation of the network-wide project company’s activity and management mechanisms will be tested on it. The success or the failure of the pilot project may influence the realization of further plans. Therefore, an important organizational aspect is formation of the competence centre. In the opinion of specialists, its functions during the current phase must be fulfilled by the Central Directorate for Terminal and Warehousing Complex Management.
Logistic Keynote
Construction of terminal and logistic centres in Russia envisages a number of system solutions. Firstly, the network principle states the presence of a definite hierarchy and specifics of functional purpose for every type of facility – a railway port, a TLC inside the country, or a satellite. Secondly, it is necessary to launch a regular container (and on some lines - piggyback) traffic on the so-called passenger principle. It means launching regular trains on schedule (including terminal services) on special train paths. This may be achieved through concluding a contract between the organiser of the trains and Russian Railways, where mutual liabilities for payment, train loading, and working on schedule are fixed. Thirdly, a definite integration of customs infrastructure is to take place: a TLC must include centres for customs registration of freight (a customs post, a temporary storage warehouse). This will allow centralising export and import cargo flows in transport nodes and concentrating all types of customs activity in one place, comfortable for a client.
According to Salman Babayev, Vice President of RZD, marketing analysis was used to define the structure and the volume of the target market of the TLC network. These are general and containerised cargoes carried now by road haulages and handled at loading bays in industrial complexes. No doubt, services provided by terminal and logistic centres will attract owners of expensive high-tech cargo, components, and consumer goods (especially in international transportation). The target market is estimated at 250-300 million tons per annum.
Mr Babayev noted that the idea of RZD’s gradual winding down of handling containers on railway accesses to industrial enterprises has been updated. In fact, the company must act as a wagon transporter, i.e. receive not a container for transportation, but a railcar with a container onboard. As a result, the Central Directorate for Terminal and Warehousing Complex Management and RZD Logistics must become subsidiaries of RZD, the business of which will be provision of terminal services, “door-to-door” services, storage, loading and unloading operations, packaging, transportation of small batches, etc.
In the words of Sergey Khronopulo, Chief of the Central Directorate for Terminal and Warehousing Complex Management at RZD, a terminal as a logistic infrastructure unit will be a sort of interface, between a consignor and the railway. If the interface is convenient, it will attract clients. Otherwise, they will find an alternative, i.e. other ways to deliver their freight.
An important factor for attracting cargo owners to the railway is provision of non-discriminating access to the TLC infrastructure. “We must take into account the needs of every specialised operator and provide efficient functioning of a terminal and logistic centre as a single technological complex and an integrated element of the logistic network. It seems that in the current phase of the reform of RZD, this goal may be achieved through RZD’s Central Directorate for Terminal and Warehousing Complex Management occupying a dominating market position in the sector of terminal and warehousing services on the network. This will also allow provision of a single technological and tariff policy when forming the TLC network,” Mr Khronopulo believes.
Risk of Conflict of Interests
The analysis of basic risks, according to Mr Babayev, has shown a high level of the project’s dependence on attracting serious investment from different sources. Investors will get an opportunity to capital into project companies, which will construct terminals and rent warehouses to railway operators later.
Risk hedging envisages creation of an efficient mechanism to manage the project. For that, turnover limitations should be removed from the terminal and warehousing complex facilities, which are to be upgraded or reconstructed. Simultaneously, the Concept of Customs Control and Customs Registration in Places Close the RF State Border, and in particular its section concerning railway transport exploitation, is to be developed and adjusted with specialised departments (the Ministry of Transport, the Ministry of Economic Development, the Federal Customs Service, etc). The developed Concept will be influenced by a number of other concepts – piggyback transportation organisation, terminal and logistic centres complex safety, logistic activity informational support, etc.
Anatoly Fedorenko, Head of Department of Logistic Infrastructure Management of the National Research University “Higher School of Economics”, warns that when developing such projects, one should take into account the conflict of interests of logistic operators and the managing company of the TLC. An investor (the managing company) invests funds on the rational sufficiency principle; he is interested in the object’s low construction cost price and strives to find a universal logistic solution to meet the requirements of servicing the maximum number of market players.
A consumer (a logistic operator) is not interested in investment; he avoids long-term investment into non-core assets. The owner of infrastructure wants to sell his services with maximum profitability, and logistic operators set themselves targets to buy these services at the lowest prices. In turn, cargo owners make efforts to reduce tariff rates on logistics and to get high-quality services.
Contradictions may arise when the rent contracts are concluded. Operators, as a rule, prefer to conclude one- or two-year contracts with possible prolongation, and a managing company strives at concluding a contract on rent or consignment storage for the entire payback period (approximately 5-7 years).
By Oksana Perepelitsa
[~DETAIL_TEXT] => To Sea Port via Railway One
Specialists at the Hong Kong Logistic Research Centre think that Russia comes third from the bottom of the list of the Asian –
Pacific Economic Cooperation member states according to the quality of terminal and logistic services. It is above only Indonesia and Peru. Given the existing limitations of the Russian railway infrastructure, an obvious step to restrain the increase in its consumers’ costs is development of optimal supply chains. Most available facilities of RZD’s terminal and warehousing complex were constructed during the planned economy period. The concept of their location as well as the lion’s share of fixed assets have become outdated by now. A lot of the facilities are low-density due to the changes which happened in the national economy. From the structure of manufacturing capacities in the regions, the requirements for storage conditions and cargo delivery, to the opportunities of technological equipment, the level and range of services have transformed. Fixed assets depreciation reaches 85% for lifting and transport equipment, and 80% for immovable property. RZD has practically left the market of small shipments. Their number reduced from 25,000 in 2003 to 5,000 in 2011 (-80%).
Nowadays, an important part of RZD’s development is creation of a stable client base. To extend the range of services provided on the railway network the company has developed the draft Concept of Terminal and Logistic Centres Creation in the RF. The document is based on the basic statements of the Strategy of Railway Transport Development, the Concept of Complex Development of Container Business in RZD Holding Company and other programme documents.
A priority of the Concept is to establish a basic network of 10 terminal and logistic centres (TLC) with the total handling capacity of over 70 million tons per annum. These are Baltiysk, Taman, and Primorsk railway ports, Bely Rast TLC, terminal and logistic centres in Yekaterinburg, Novosibirsk, Nizhny Novgorod, Kazan, Kaliningrad, and Volgograd transport nodes. A typical business model of projects of separate TLC creation envisages participation of a project company – developer that will form assets for exploitation and renting to operators. According to preliminary evaluations, the total investment needed to create the basic network is more than RUB 360 billion. And the cost of the first phase of the project (plus eight TLCs in Khabarovsk, Samara, Voronezh, Bryansk, Kirov, Ufa, Ulan-Ude, and Krasnoyarsk) is about RUB 560 billion.
Together with the creation of new terminal infrastructure, the Concept defines the location of operating rail yards. There are 577 such facilities now working on RZD’s network. They will play the role of satellites – they will form a local network to support the portfolio of services provided by the regional TLC by means of infrastructure specialization, provision of unique services, etc.
The choice of the basic network of TLC location takes into account the plan of actions to prepare for and host the FIFA World Cup in 2018. Bely Rast will be the pilot project. Organisation of the network-wide project company’s activity and management mechanisms will be tested on it. The success or the failure of the pilot project may influence the realization of further plans. Therefore, an important organizational aspect is formation of the competence centre. In the opinion of specialists, its functions during the current phase must be fulfilled by the Central Directorate for Terminal and Warehousing Complex Management.
Logistic Keynote
Construction of terminal and logistic centres in Russia envisages a number of system solutions. Firstly, the network principle states the presence of a definite hierarchy and specifics of functional purpose for every type of facility – a railway port, a TLC inside the country, or a satellite. Secondly, it is necessary to launch a regular container (and on some lines - piggyback) traffic on the so-called passenger principle. It means launching regular trains on schedule (including terminal services) on special train paths. This may be achieved through concluding a contract between the organiser of the trains and Russian Railways, where mutual liabilities for payment, train loading, and working on schedule are fixed. Thirdly, a definite integration of customs infrastructure is to take place: a TLC must include centres for customs registration of freight (a customs post, a temporary storage warehouse). This will allow centralising export and import cargo flows in transport nodes and concentrating all types of customs activity in one place, comfortable for a client.
According to Salman Babayev, Vice President of RZD, marketing analysis was used to define the structure and the volume of the target market of the TLC network. These are general and containerised cargoes carried now by road haulages and handled at loading bays in industrial complexes. No doubt, services provided by terminal and logistic centres will attract owners of expensive high-tech cargo, components, and consumer goods (especially in international transportation). The target market is estimated at 250-300 million tons per annum.
Mr Babayev noted that the idea of RZD’s gradual winding down of handling containers on railway accesses to industrial enterprises has been updated. In fact, the company must act as a wagon transporter, i.e. receive not a container for transportation, but a railcar with a container onboard. As a result, the Central Directorate for Terminal and Warehousing Complex Management and RZD Logistics must become subsidiaries of RZD, the business of which will be provision of terminal services, “door-to-door” services, storage, loading and unloading operations, packaging, transportation of small batches, etc.
In the words of Sergey Khronopulo, Chief of the Central Directorate for Terminal and Warehousing Complex Management at RZD, a terminal as a logistic infrastructure unit will be a sort of interface, between a consignor and the railway. If the interface is convenient, it will attract clients. Otherwise, they will find an alternative, i.e. other ways to deliver their freight.
An important factor for attracting cargo owners to the railway is provision of non-discriminating access to the TLC infrastructure. “We must take into account the needs of every specialised operator and provide efficient functioning of a terminal and logistic centre as a single technological complex and an integrated element of the logistic network. It seems that in the current phase of the reform of RZD, this goal may be achieved through RZD’s Central Directorate for Terminal and Warehousing Complex Management occupying a dominating market position in the sector of terminal and warehousing services on the network. This will also allow provision of a single technological and tariff policy when forming the TLC network,” Mr Khronopulo believes.
Risk of Conflict of Interests
The analysis of basic risks, according to Mr Babayev, has shown a high level of the project’s dependence on attracting serious investment from different sources. Investors will get an opportunity to capital into project companies, which will construct terminals and rent warehouses to railway operators later.
Risk hedging envisages creation of an efficient mechanism to manage the project. For that, turnover limitations should be removed from the terminal and warehousing complex facilities, which are to be upgraded or reconstructed. Simultaneously, the Concept of Customs Control and Customs Registration in Places Close the RF State Border, and in particular its section concerning railway transport exploitation, is to be developed and adjusted with specialised departments (the Ministry of Transport, the Ministry of Economic Development, the Federal Customs Service, etc). The developed Concept will be influenced by a number of other concepts – piggyback transportation organisation, terminal and logistic centres complex safety, logistic activity informational support, etc.
Anatoly Fedorenko, Head of Department of Logistic Infrastructure Management of the National Research University “Higher School of Economics”, warns that when developing such projects, one should take into account the conflict of interests of logistic operators and the managing company of the TLC. An investor (the managing company) invests funds on the rational sufficiency principle; he is interested in the object’s low construction cost price and strives to find a universal logistic solution to meet the requirements of servicing the maximum number of market players.
A consumer (a logistic operator) is not interested in investment; he avoids long-term investment into non-core assets. The owner of infrastructure wants to sell his services with maximum profitability, and logistic operators set themselves targets to buy these services at the lowest prices. In turn, cargo owners make efforts to reduce tariff rates on logistics and to get high-quality services.
Contradictions may arise when the rent contracts are concluded. Operators, as a rule, prefer to conclude one- or two-year contracts with possible prolongation, and a managing company strives at concluding a contract on rent or consignment storage for the entire payback period (approximately 5-7 years).
By Oksana Perepelitsa
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/3/14.jpg" border="1" alt=" " hspace="5" width="300" height="231" align="left" />Russian Railways have presented the draft Concept of Terminal and Logistic Centres Creation, which envisages organisation of a scaled logistic business using “on time” and “door-to-door” models. Experts think, however, that the concept may not be carried out 100% because of the project financing risks.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/3/14.jpg" border="1" alt=" " hspace="5" width="300" height="231" align="left" />Russian Railways have presented the draft Concept of Terminal and Logistic Centres Creation, which envisages organisation of a scaled logistic business using “on time” and “door-to-door” models. Experts think, however, that the concept may not be carried out 100% because of the project financing risks.
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[ELEMENT_DETAIL_PICTURE_FILE_ALT] => To Become Client-Friendly
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Every successful transportation company seeking to enter the international market has to build relations with foreign customers. Array
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[DETAIL_TEXT] => Andrey Leites, Director of the written translation and localization center at EGO Translating Company, classifies all the documents they work with into four groups, by the stage of external cooperation:
1. Marketing documentation – at the stage of promotion and search for customers;
2. Legal and financial documentation - during negotiations and signing of agreements;
3. Technical documentation – at the stage of service provision;
4. Electronic resources – websites and sofrware localization.
The first group includes everything connected with marketing communications targeted at foreign markets: press-releases, articles, presentations and so on.
Legal and financial papers include tenders, contracts, invoices, customs declarations, bills of lading and all other official documents. Technical group consists of operation manuals, certificates of compliance, records of diagnostic tests, specifications and drawings.
One of the main goals of a translation company is to produce uniformity of the documentation. This task requires not only an experienced team of editors, proof-readers, layout designers, but also automated systems like Translation Memory.
Globalization and a Naked Conductor
Translation is an essential part of business for the firms specializing in international transportation, and for large logistic operators providing diversified services.
Mark Brenneiser, General Director of STS Logistics, stresses that it’s impossible to succeed in the market without foreign languages in this age of globalization and common quality standards. He explains: “In our company international contracts are translated into English. So knowledge of foreign languages is encouraged. A good command of English is among the key requirements for our managers”.
Arkadi Wolfsohn, General Director of Сommunication World Consulting, admits that translation problems have always existed: “I’d like to tell a give you a classic example. A Russian specialist was surprised to find in a technical English text a phrase that he understood as “a naked trainman was running under the railcar”. The original said “naked conductor runs under the carriage”, relating to uncovered wiring. It’s a good example of why quality and accuracy of translation matters. We realize that fluent English is often problematic for technical personnel in the rail industry, and as the geographic range of transportations expands, this problem growth more acute”.
Some companies choose to rely on their own resources in this area. Logistics operator STS Logistics deliberately has no in-house translation department because the core personnel know foreign languages. In case of legal, financial or very specific documentation, the operator applies to translation firms. Then the documents are examined by native speakers to avoid dangerous inaccuracies.
Andrey Leites notes that a translation project has many sides and tasks. If, for example, a company participates in an international tender and leases vehicles from a foreign producer, it will need technical translation, translation of tender documentation, financial and legal papers, customs declarations and notarized copies of them. Translation and localization of a web-site may also be required, as well as oral interpretation at negotiations, support with equipment installation and training of personnel.
Andrey Leites says that this diversity of topics inside one industry is a special feature of working with transportation and logistic companies. That’s why a qualified translation company that is able to provide complex linguistic support at all stages and directions of work is an excellent option for them.
Eugenia Tsygantsova, General Director of Nowitex Translation, says that a major part of the texts that her company processes represent legal documentation overloaded with transport, technical and financial terminology. To deal with it, an translator should possess good expertise in such diverse fields as transport law, both domestic and international, and be aware of technology advances.
Load or Reload?
Another important aspect of translating for transport operators is the wide use of abbreviations, like UNCITRAL (United Nations Commission on International Trade Law), GCC-CIV/PRR (General Conditions of Carriage for Rail Passengers), COTIF (The Convention concerning International Carriage by Rail), and many others.
Some international transport terms have no standard Russian equivalents, like e-RailFreight (Electronic bill of lading for rail cargoes) or Telematic (using integrated devices that process and transmit information). In these cases it’s better to give comprehensible explanations of the terms than to use transliteration.
STS Logistics combines its own and external resources, systematically monitoring the quality of translation services. Sometimes it has to hire several firms for the same project to reach perfect results. Mark Brenneiser feels that translation services should be certified, as some companies, in their hunt for profit, use unqualified workers and hire young students. As a result, a the customer gets poor-quality translation that sounds like a Russian version of a Chinese electric kettle instruction manual. With documents like that a company risks losing not only its money but also its reputation.
Eugenia Tsygantsova believes that excellent translations could only be provided by experts that always develop their skills and knowledge of their specialist subject specialization. A good translator should have a broad interest in their specialist subject combined wide outlook with understanding of related areas, and a basic knowledge of law and technical advances. Reading technical publications is an important part of his work, and the internet greatly helps with this.
By Marina Ermolenko
viewpoint
Eugenia Tsygantsova,
General Director of Nowitex Translations:
– If we leave translation specifics aside, making up documents for transportation companies is really complicated. We normally receive international consignment documents in scanned versions, often of poor quality. A translator not only has to understand all the details and recognize geographical names, names of goods, but also to draw anew complicated tables, bearing in mind that the requirements for the documents may differ from country to country, with everything on a very tight schedule.
Mark Brenneiser,
General Director at STS-Logistics:
– Lack of knowledge of local regulations can result in some awkward situations.
I’ll give you an example from the food safety industry. In Europe the standard temperature range for these goods is +18 +20. But in Russia even if it’s really hot outside, the goods are not refrigerated and stored at the “standard” temperature that may reach +25. A translator of logistic documentation has to keep this difference in mind and provide for it correctly.
Andrey Leites,
Director of written translation and localization center at EGO Translating:
– A translator often has to deal with highly specialized vocabulary that is used inside the company. Professional jargon can differ greatly from common usage. From this point of view cooperation between the translator and customer is really important. Only in cooperation we can compile specialized glossaries to assist in further work.
Arkadi Wolfsohn,
General Director of Сommunication World consulting company:
– Our company has worked out a next generation communication platform called Claris – Client Adapted Railways Intelligent System. It allows communication between company departments and also between different companies, as the levels of access to various modules and documents are restricted. The platform includes 6 main European languages (among them Russian), and is easy to adapt to changing rules and norms.
Its users can utilize the advantages of cloud computing as the multiplatform system does not depend on certain devices or operating systems. All this makes rail-connected communication within Europe really easy.The platform has already been applied by a leading rolling-stock manufacturer on several pilot projects.
[~DETAIL_TEXT] => Andrey Leites, Director of the written translation and localization center at EGO Translating Company, classifies all the documents they work with into four groups, by the stage of external cooperation:
1. Marketing documentation – at the stage of promotion and search for customers;
2. Legal and financial documentation - during negotiations and signing of agreements;
3. Technical documentation – at the stage of service provision;
4. Electronic resources – websites and sofrware localization.
The first group includes everything connected with marketing communications targeted at foreign markets: press-releases, articles, presentations and so on.
Legal and financial papers include tenders, contracts, invoices, customs declarations, bills of lading and all other official documents. Technical group consists of operation manuals, certificates of compliance, records of diagnostic tests, specifications and drawings.
One of the main goals of a translation company is to produce uniformity of the documentation. This task requires not only an experienced team of editors, proof-readers, layout designers, but also automated systems like Translation Memory.
Globalization and a Naked Conductor
Translation is an essential part of business for the firms specializing in international transportation, and for large logistic operators providing diversified services.
Mark Brenneiser, General Director of STS Logistics, stresses that it’s impossible to succeed in the market without foreign languages in this age of globalization and common quality standards. He explains: “In our company international contracts are translated into English. So knowledge of foreign languages is encouraged. A good command of English is among the key requirements for our managers”.
Arkadi Wolfsohn, General Director of Сommunication World Consulting, admits that translation problems have always existed: “I’d like to tell a give you a classic example. A Russian specialist was surprised to find in a technical English text a phrase that he understood as “a naked trainman was running under the railcar”. The original said “naked conductor runs under the carriage”, relating to uncovered wiring. It’s a good example of why quality and accuracy of translation matters. We realize that fluent English is often problematic for technical personnel in the rail industry, and as the geographic range of transportations expands, this problem growth more acute”.
Some companies choose to rely on their own resources in this area. Logistics operator STS Logistics deliberately has no in-house translation department because the core personnel know foreign languages. In case of legal, financial or very specific documentation, the operator applies to translation firms. Then the documents are examined by native speakers to avoid dangerous inaccuracies.
Andrey Leites notes that a translation project has many sides and tasks. If, for example, a company participates in an international tender and leases vehicles from a foreign producer, it will need technical translation, translation of tender documentation, financial and legal papers, customs declarations and notarized copies of them. Translation and localization of a web-site may also be required, as well as oral interpretation at negotiations, support with equipment installation and training of personnel.
Andrey Leites says that this diversity of topics inside one industry is a special feature of working with transportation and logistic companies. That’s why a qualified translation company that is able to provide complex linguistic support at all stages and directions of work is an excellent option for them.
Eugenia Tsygantsova, General Director of Nowitex Translation, says that a major part of the texts that her company processes represent legal documentation overloaded with transport, technical and financial terminology. To deal with it, an translator should possess good expertise in such diverse fields as transport law, both domestic and international, and be aware of technology advances.
Load or Reload?
Another important aspect of translating for transport operators is the wide use of abbreviations, like UNCITRAL (United Nations Commission on International Trade Law), GCC-CIV/PRR (General Conditions of Carriage for Rail Passengers), COTIF (The Convention concerning International Carriage by Rail), and many others.
Some international transport terms have no standard Russian equivalents, like e-RailFreight (Electronic bill of lading for rail cargoes) or Telematic (using integrated devices that process and transmit information). In these cases it’s better to give comprehensible explanations of the terms than to use transliteration.
STS Logistics combines its own and external resources, systematically monitoring the quality of translation services. Sometimes it has to hire several firms for the same project to reach perfect results. Mark Brenneiser feels that translation services should be certified, as some companies, in their hunt for profit, use unqualified workers and hire young students. As a result, a the customer gets poor-quality translation that sounds like a Russian version of a Chinese electric kettle instruction manual. With documents like that a company risks losing not only its money but also its reputation.
Eugenia Tsygantsova believes that excellent translations could only be provided by experts that always develop their skills and knowledge of their specialist subject specialization. A good translator should have a broad interest in their specialist subject combined wide outlook with understanding of related areas, and a basic knowledge of law and technical advances. Reading technical publications is an important part of his work, and the internet greatly helps with this.
By Marina Ermolenko
viewpoint
Eugenia Tsygantsova,
General Director of Nowitex Translations:
– If we leave translation specifics aside, making up documents for transportation companies is really complicated. We normally receive international consignment documents in scanned versions, often of poor quality. A translator not only has to understand all the details and recognize geographical names, names of goods, but also to draw anew complicated tables, bearing in mind that the requirements for the documents may differ from country to country, with everything on a very tight schedule.
Mark Brenneiser,
General Director at STS-Logistics:
– Lack of knowledge of local regulations can result in some awkward situations.
I’ll give you an example from the food safety industry. In Europe the standard temperature range for these goods is +18 +20. But in Russia even if it’s really hot outside, the goods are not refrigerated and stored at the “standard” temperature that may reach +25. A translator of logistic documentation has to keep this difference in mind and provide for it correctly.
Andrey Leites,
Director of written translation and localization center at EGO Translating:
– A translator often has to deal with highly specialized vocabulary that is used inside the company. Professional jargon can differ greatly from common usage. From this point of view cooperation between the translator and customer is really important. Only in cooperation we can compile specialized glossaries to assist in further work.
Arkadi Wolfsohn,
General Director of Сommunication World consulting company:
– Our company has worked out a next generation communication platform called Claris – Client Adapted Railways Intelligent System. It allows communication between company departments and also between different companies, as the levels of access to various modules and documents are restricted. The platform includes 6 main European languages (among them Russian), and is easy to adapt to changing rules and norms.
Its users can utilize the advantages of cloud computing as the multiplatform system does not depend on certain devices or operating systems. All this makes rail-connected communication within Europe really easy.The platform has already been applied by a leading rolling-stock manufacturer on several pilot projects.
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[PREVIEW_TEXT] => Every successful transportation company seeking to enter the international market has to build relations with foreign customers.
After preliminary negotiations are over, the paper work begins, and which can be a hassle, especially when the role of the translator is underestimated. One Russian company was totally misunderstood when, making out an invoice for a foreign partner, it persisted in using word “account” instead of “invoice”.
[~PREVIEW_TEXT] => Every successful transportation company seeking to enter the international market has to build relations with foreign customers.
After preliminary negotiations are over, the paper work begins, and which can be a hassle, especially when the role of the translator is underestimated. One Russian company was totally misunderstood when, making out an invoice for a foreign partner, it persisted in using word “account” instead of “invoice”.
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/3/13.jpg" border="1" alt=" " hspace="5" width="300" height="201" align="left" />Every successful transportation company seeking to enter the international market has to build relations with foreign customers. <br />After preliminary negotiations are over, the paper work begins, and which can be a hassle, especially when the role of the translator is underestimated. One Russian company was totally misunderstood when, making out an invoice for a foreign partner, it persisted in using word “account” instead of “invoice”.
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[ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => Lost in translation – lost in the market
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[~NAME] => Lost in translation – lost in the market
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[DETAIL_TEXT] => Andrey Leites, Director of the written translation and localization center at EGO Translating Company, classifies all the documents they work with into four groups, by the stage of external cooperation:
1. Marketing documentation – at the stage of promotion and search for customers;
2. Legal and financial documentation - during negotiations and signing of agreements;
3. Technical documentation – at the stage of service provision;
4. Electronic resources – websites and sofrware localization.
The first group includes everything connected with marketing communications targeted at foreign markets: press-releases, articles, presentations and so on.
Legal and financial papers include tenders, contracts, invoices, customs declarations, bills of lading and all other official documents. Technical group consists of operation manuals, certificates of compliance, records of diagnostic tests, specifications and drawings.
One of the main goals of a translation company is to produce uniformity of the documentation. This task requires not only an experienced team of editors, proof-readers, layout designers, but also automated systems like Translation Memory.
Globalization and a Naked Conductor
Translation is an essential part of business for the firms specializing in international transportation, and for large logistic operators providing diversified services.
Mark Brenneiser, General Director of STS Logistics, stresses that it’s impossible to succeed in the market without foreign languages in this age of globalization and common quality standards. He explains: “In our company international contracts are translated into English. So knowledge of foreign languages is encouraged. A good command of English is among the key requirements for our managers”.
Arkadi Wolfsohn, General Director of Сommunication World Consulting, admits that translation problems have always existed: “I’d like to tell a give you a classic example. A Russian specialist was surprised to find in a technical English text a phrase that he understood as “a naked trainman was running under the railcar”. The original said “naked conductor runs under the carriage”, relating to uncovered wiring. It’s a good example of why quality and accuracy of translation matters. We realize that fluent English is often problematic for technical personnel in the rail industry, and as the geographic range of transportations expands, this problem growth more acute”.
Some companies choose to rely on their own resources in this area. Logistics operator STS Logistics deliberately has no in-house translation department because the core personnel know foreign languages. In case of legal, financial or very specific documentation, the operator applies to translation firms. Then the documents are examined by native speakers to avoid dangerous inaccuracies.
Andrey Leites notes that a translation project has many sides and tasks. If, for example, a company participates in an international tender and leases vehicles from a foreign producer, it will need technical translation, translation of tender documentation, financial and legal papers, customs declarations and notarized copies of them. Translation and localization of a web-site may also be required, as well as oral interpretation at negotiations, support with equipment installation and training of personnel.
Andrey Leites says that this diversity of topics inside one industry is a special feature of working with transportation and logistic companies. That’s why a qualified translation company that is able to provide complex linguistic support at all stages and directions of work is an excellent option for them.
Eugenia Tsygantsova, General Director of Nowitex Translation, says that a major part of the texts that her company processes represent legal documentation overloaded with transport, technical and financial terminology. To deal with it, an translator should possess good expertise in such diverse fields as transport law, both domestic and international, and be aware of technology advances.
Load or Reload?
Another important aspect of translating for transport operators is the wide use of abbreviations, like UNCITRAL (United Nations Commission on International Trade Law), GCC-CIV/PRR (General Conditions of Carriage for Rail Passengers), COTIF (The Convention concerning International Carriage by Rail), and many others.
Some international transport terms have no standard Russian equivalents, like e-RailFreight (Electronic bill of lading for rail cargoes) or Telematic (using integrated devices that process and transmit information). In these cases it’s better to give comprehensible explanations of the terms than to use transliteration.
STS Logistics combines its own and external resources, systematically monitoring the quality of translation services. Sometimes it has to hire several firms for the same project to reach perfect results. Mark Brenneiser feels that translation services should be certified, as some companies, in their hunt for profit, use unqualified workers and hire young students. As a result, a the customer gets poor-quality translation that sounds like a Russian version of a Chinese electric kettle instruction manual. With documents like that a company risks losing not only its money but also its reputation.
Eugenia Tsygantsova believes that excellent translations could only be provided by experts that always develop their skills and knowledge of their specialist subject specialization. A good translator should have a broad interest in their specialist subject combined wide outlook with understanding of related areas, and a basic knowledge of law and technical advances. Reading technical publications is an important part of his work, and the internet greatly helps with this.
By Marina Ermolenko
viewpoint
Eugenia Tsygantsova,
General Director of Nowitex Translations:
– If we leave translation specifics aside, making up documents for transportation companies is really complicated. We normally receive international consignment documents in scanned versions, often of poor quality. A translator not only has to understand all the details and recognize geographical names, names of goods, but also to draw anew complicated tables, bearing in mind that the requirements for the documents may differ from country to country, with everything on a very tight schedule.
Mark Brenneiser,
General Director at STS-Logistics:
– Lack of knowledge of local regulations can result in some awkward situations.
I’ll give you an example from the food safety industry. In Europe the standard temperature range for these goods is +18 +20. But in Russia even if it’s really hot outside, the goods are not refrigerated and stored at the “standard” temperature that may reach +25. A translator of logistic documentation has to keep this difference in mind and provide for it correctly.
Andrey Leites,
Director of written translation and localization center at EGO Translating:
– A translator often has to deal with highly specialized vocabulary that is used inside the company. Professional jargon can differ greatly from common usage. From this point of view cooperation between the translator and customer is really important. Only in cooperation we can compile specialized glossaries to assist in further work.
Arkadi Wolfsohn,
General Director of Сommunication World consulting company:
– Our company has worked out a next generation communication platform called Claris – Client Adapted Railways Intelligent System. It allows communication between company departments and also between different companies, as the levels of access to various modules and documents are restricted. The platform includes 6 main European languages (among them Russian), and is easy to adapt to changing rules and norms.
Its users can utilize the advantages of cloud computing as the multiplatform system does not depend on certain devices or operating systems. All this makes rail-connected communication within Europe really easy.The platform has already been applied by a leading rolling-stock manufacturer on several pilot projects.
[~DETAIL_TEXT] => Andrey Leites, Director of the written translation and localization center at EGO Translating Company, classifies all the documents they work with into four groups, by the stage of external cooperation:
1. Marketing documentation – at the stage of promotion and search for customers;
2. Legal and financial documentation - during negotiations and signing of agreements;
3. Technical documentation – at the stage of service provision;
4. Electronic resources – websites and sofrware localization.
The first group includes everything connected with marketing communications targeted at foreign markets: press-releases, articles, presentations and so on.
Legal and financial papers include tenders, contracts, invoices, customs declarations, bills of lading and all other official documents. Technical group consists of operation manuals, certificates of compliance, records of diagnostic tests, specifications and drawings.
One of the main goals of a translation company is to produce uniformity of the documentation. This task requires not only an experienced team of editors, proof-readers, layout designers, but also automated systems like Translation Memory.
Globalization and a Naked Conductor
Translation is an essential part of business for the firms specializing in international transportation, and for large logistic operators providing diversified services.
Mark Brenneiser, General Director of STS Logistics, stresses that it’s impossible to succeed in the market without foreign languages in this age of globalization and common quality standards. He explains: “In our company international contracts are translated into English. So knowledge of foreign languages is encouraged. A good command of English is among the key requirements for our managers”.
Arkadi Wolfsohn, General Director of Сommunication World Consulting, admits that translation problems have always existed: “I’d like to tell a give you a classic example. A Russian specialist was surprised to find in a technical English text a phrase that he understood as “a naked trainman was running under the railcar”. The original said “naked conductor runs under the carriage”, relating to uncovered wiring. It’s a good example of why quality and accuracy of translation matters. We realize that fluent English is often problematic for technical personnel in the rail industry, and as the geographic range of transportations expands, this problem growth more acute”.
Some companies choose to rely on their own resources in this area. Logistics operator STS Logistics deliberately has no in-house translation department because the core personnel know foreign languages. In case of legal, financial or very specific documentation, the operator applies to translation firms. Then the documents are examined by native speakers to avoid dangerous inaccuracies.
Andrey Leites notes that a translation project has many sides and tasks. If, for example, a company participates in an international tender and leases vehicles from a foreign producer, it will need technical translation, translation of tender documentation, financial and legal papers, customs declarations and notarized copies of them. Translation and localization of a web-site may also be required, as well as oral interpretation at negotiations, support with equipment installation and training of personnel.
Andrey Leites says that this diversity of topics inside one industry is a special feature of working with transportation and logistic companies. That’s why a qualified translation company that is able to provide complex linguistic support at all stages and directions of work is an excellent option for them.
Eugenia Tsygantsova, General Director of Nowitex Translation, says that a major part of the texts that her company processes represent legal documentation overloaded with transport, technical and financial terminology. To deal with it, an translator should possess good expertise in such diverse fields as transport law, both domestic and international, and be aware of technology advances.
Load or Reload?
Another important aspect of translating for transport operators is the wide use of abbreviations, like UNCITRAL (United Nations Commission on International Trade Law), GCC-CIV/PRR (General Conditions of Carriage for Rail Passengers), COTIF (The Convention concerning International Carriage by Rail), and many others.
Some international transport terms have no standard Russian equivalents, like e-RailFreight (Electronic bill of lading for rail cargoes) or Telematic (using integrated devices that process and transmit information). In these cases it’s better to give comprehensible explanations of the terms than to use transliteration.
STS Logistics combines its own and external resources, systematically monitoring the quality of translation services. Sometimes it has to hire several firms for the same project to reach perfect results. Mark Brenneiser feels that translation services should be certified, as some companies, in their hunt for profit, use unqualified workers and hire young students. As a result, a the customer gets poor-quality translation that sounds like a Russian version of a Chinese electric kettle instruction manual. With documents like that a company risks losing not only its money but also its reputation.
Eugenia Tsygantsova believes that excellent translations could only be provided by experts that always develop their skills and knowledge of their specialist subject specialization. A good translator should have a broad interest in their specialist subject combined wide outlook with understanding of related areas, and a basic knowledge of law and technical advances. Reading technical publications is an important part of his work, and the internet greatly helps with this.
By Marina Ermolenko
viewpoint
Eugenia Tsygantsova,
General Director of Nowitex Translations:
– If we leave translation specifics aside, making up documents for transportation companies is really complicated. We normally receive international consignment documents in scanned versions, often of poor quality. A translator not only has to understand all the details and recognize geographical names, names of goods, but also to draw anew complicated tables, bearing in mind that the requirements for the documents may differ from country to country, with everything on a very tight schedule.
Mark Brenneiser,
General Director at STS-Logistics:
– Lack of knowledge of local regulations can result in some awkward situations.
I’ll give you an example from the food safety industry. In Europe the standard temperature range for these goods is +18 +20. But in Russia even if it’s really hot outside, the goods are not refrigerated and stored at the “standard” temperature that may reach +25. A translator of logistic documentation has to keep this difference in mind and provide for it correctly.
Andrey Leites,
Director of written translation and localization center at EGO Translating:
– A translator often has to deal with highly specialized vocabulary that is used inside the company. Professional jargon can differ greatly from common usage. From this point of view cooperation between the translator and customer is really important. Only in cooperation we can compile specialized glossaries to assist in further work.
Arkadi Wolfsohn,
General Director of Сommunication World consulting company:
– Our company has worked out a next generation communication platform called Claris – Client Adapted Railways Intelligent System. It allows communication between company departments and also between different companies, as the levels of access to various modules and documents are restricted. The platform includes 6 main European languages (among them Russian), and is easy to adapt to changing rules and norms.
Its users can utilize the advantages of cloud computing as the multiplatform system does not depend on certain devices or operating systems. All this makes rail-connected communication within Europe really easy.The platform has already been applied by a leading rolling-stock manufacturer on several pilot projects.
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After preliminary negotiations are over, the paper work begins, and which can be a hassle, especially when the role of the translator is underestimated. One Russian company was totally misunderstood when, making out an invoice for a foreign partner, it persisted in using word “account” instead of “invoice”.
[~PREVIEW_TEXT] => Every successful transportation company seeking to enter the international market has to build relations with foreign customers.
After preliminary negotiations are over, the paper work begins, and which can be a hassle, especially when the role of the translator is underestimated. One Russian company was totally misunderstood when, making out an invoice for a foreign partner, it persisted in using word “account” instead of “invoice”.
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Since Russia began developing market relations, the topic of doing business here has become more relevant. There was quite a lot of information that the Russian market, despite its dynamic development is one of the most difficult to work in . So why do foreign companies still want to come here?Array
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Strange as it may seem, the first reason is mentality. As it turns out, it is not difficult to adapt to the Russian market especially for those, who have already been here during the USSR. “I studied Russian language and the geography of logistics when I was student in Minsk in 1974. So today I feel at home here”, said John Keir, CEO of Ross Learmont Ltd. “People say that in Russia you face many difficulties all the time. When I started to work in the Soviet Union, these were mostly political problems. But if we speak about human relations, it was always easy for me to communicate with people. But I would like to compare the Russian market to the famous Russian book “Master and Margarita” - sometimes it is unclear, but very interesting”.
Kristian Koerner, logistics director of Profine RUS also began his career in Russia many years ago. “I just fell in love with this country”, he said. “And realized that the Russian mentality is very close to my own, sometimes even closer than German. For Europeans, Russia is still closer than China, Korea or Japan. Here is a really interesting market with so many opportunities. If we talk about business, all regulations in Europe are strict: you have to do your job from a to z, and you can’t deviate. But in Russia, many rules are not concrete; therefore there is an opportunity to move forward with your partners”.
However, for those who are unfamiliar with working here, it is still difficult to imagine what you will have to deal with in the future. For example, Heiko Rumfeld, commercial director of Duisport Agency, notes that he is used to regulated processes in Europe, but in Russia this presumption should be changed. “I have heard a lot about the quirks of working here”, he said. “For example, I heard that a personal relationship with the customer is very important in Russia”.
But many foreigners also heard that relations with customers are sometimes dishonest. Could it be true? “Before coming to Russia I was told a lot of scary things. I was told that during the business meetings, all suppliers are invited to a round table to drink vodka. And only those who managed to drink ten bottles will get the contract. But it’s not true. In Russia people play fairly by the rules. Here the client reports what companies offered him a contract and on what terms”, said K. Koerner.
The representatives of the companies agree that the relationship with the client in Russia is no different from what you can see in any other country. They are always based on trust, compliance with the contract and mutual understanding. But at the same time, the client dictates the terms. Some companies coming to Russia still rely on tactics of “ here today, gone tomorrow”. But, according to CEO of STS Logistics Mark Brenneiser, they soon discover that you cannot achieve anything that way, and you have to work on long-term relationships.
Competition Through Cooperation
In Russia public bodies also play an important role in the regulation of the business sector. Bureaucracy and complicated court systems can scare away foreigners. But, according to H. Rumfeld, these difficulties are always surmountable. “This rule applies both in Germany and in Russia. As for solutions, we are committed to the letter of the law. We will never commit unlawful acts or acts that are contrary to the norms of business ethics. This approach has also proved its worth to Russian customers. We successfully develop business with Russian companies and will continue to do so”, he said.
According to M. Brenneiser, Russian legislation is well structured. But because his company is dealing with customs, he has to deal with the judicial system a lot. “And success often depends on who you are in dispute with. If it is the local oligarch, you may not win the case. Therefore, in my opinion, in Europe, in Germany particularly, you have a better chance of success”, he said.
As noted by all panelists, competition in Russia today is fair and open, but this is all based on personal relationships. To be successful it is important also to cooperate with your business rivals. “I would like to give an example from the times of the USSR, said D.Keir - One company wanted to arrange the carriage of liquid cargo. But it had to find 100 tank-containers; each was worth the $ 25000. Our company was willing to give only 50 of them. And I contacted our colleagues (or competitors), to find 50 more containers. The important thing is that if one can’t do something, then you need to cooperate.”
And the last problem, which almost all companies that have already decided to go on the Russian market have to deal with, is a shortage of highly qualified personnel. But it can also be solved. “Because I’m more familiar with office staff, I am pleased to say that we have always managed to find people with a good basic education, adequate for the work we do in the office”, said Koerner. “Sometimes they have a lack of the knowledge of foreign languages. But they are ready to study. Our factory is located 100 km away from Moscow in a Moscow suburb, so it is difficult to find good staff that know the details of international cargo transportation and container transport. But in our company we are working on improving the skills of staff. And our workers want it too”. H. Rumfeld, whose company only plans to enter Russian market, said that his company will rely on educated and ambitious young people who are able to make quick decisions.
Relations between workers and management inside the companies and salaries, for sure, play an important role here. “Salaries in Moscow are quite high”, said M. Brenneiser. “With regard to workers unions, we are ready to have a dialogue with them if necessary”.
“We don’t have very high salaries in our company”, said K. Koerner. “And I know that there have been attempts to implement trade unions in our company, but our workers did not go for it. If employees are loyal and the employer can maintain such an atmosphere, the trade unions are no longer needed”.
Despite all the difficulties, all the speakers have agreed that doing business in Russia is quite comfortable. “My home is Germany, but Russia is my second home”, said M. Brenneiser. “Every morning in Hamburg I was driving at work and I always knew what I can expect during the day, but here I always think: what will happen today? In Russia you are always on the move, so it is always interesting”.
By Christina Alexandrova
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Strange as it may seem, the first reason is mentality. As it turns out, it is not difficult to adapt to the Russian market especially for those, who have already been here during the USSR. “I studied Russian language and the geography of logistics when I was student in Minsk in 1974. So today I feel at home here”, said John Keir, CEO of Ross Learmont Ltd. “People say that in Russia you face many difficulties all the time. When I started to work in the Soviet Union, these were mostly political problems. But if we speak about human relations, it was always easy for me to communicate with people. But I would like to compare the Russian market to the famous Russian book “Master and Margarita” - sometimes it is unclear, but very interesting”.
Kristian Koerner, logistics director of Profine RUS also began his career in Russia many years ago. “I just fell in love with this country”, he said. “And realized that the Russian mentality is very close to my own, sometimes even closer than German. For Europeans, Russia is still closer than China, Korea or Japan. Here is a really interesting market with so many opportunities. If we talk about business, all regulations in Europe are strict: you have to do your job from a to z, and you can’t deviate. But in Russia, many rules are not concrete; therefore there is an opportunity to move forward with your partners”.
However, for those who are unfamiliar with working here, it is still difficult to imagine what you will have to deal with in the future. For example, Heiko Rumfeld, commercial director of Duisport Agency, notes that he is used to regulated processes in Europe, but in Russia this presumption should be changed. “I have heard a lot about the quirks of working here”, he said. “For example, I heard that a personal relationship with the customer is very important in Russia”.
But many foreigners also heard that relations with customers are sometimes dishonest. Could it be true? “Before coming to Russia I was told a lot of scary things. I was told that during the business meetings, all suppliers are invited to a round table to drink vodka. And only those who managed to drink ten bottles will get the contract. But it’s not true. In Russia people play fairly by the rules. Here the client reports what companies offered him a contract and on what terms”, said K. Koerner.
The representatives of the companies agree that the relationship with the client in Russia is no different from what you can see in any other country. They are always based on trust, compliance with the contract and mutual understanding. But at the same time, the client dictates the terms. Some companies coming to Russia still rely on tactics of “ here today, gone tomorrow”. But, according to CEO of STS Logistics Mark Brenneiser, they soon discover that you cannot achieve anything that way, and you have to work on long-term relationships.
Competition Through Cooperation
In Russia public bodies also play an important role in the regulation of the business sector. Bureaucracy and complicated court systems can scare away foreigners. But, according to H. Rumfeld, these difficulties are always surmountable. “This rule applies both in Germany and in Russia. As for solutions, we are committed to the letter of the law. We will never commit unlawful acts or acts that are contrary to the norms of business ethics. This approach has also proved its worth to Russian customers. We successfully develop business with Russian companies and will continue to do so”, he said.
According to M. Brenneiser, Russian legislation is well structured. But because his company is dealing with customs, he has to deal with the judicial system a lot. “And success often depends on who you are in dispute with. If it is the local oligarch, you may not win the case. Therefore, in my opinion, in Europe, in Germany particularly, you have a better chance of success”, he said.
As noted by all panelists, competition in Russia today is fair and open, but this is all based on personal relationships. To be successful it is important also to cooperate with your business rivals. “I would like to give an example from the times of the USSR, said D.Keir - One company wanted to arrange the carriage of liquid cargo. But it had to find 100 tank-containers; each was worth the $ 25000. Our company was willing to give only 50 of them. And I contacted our colleagues (or competitors), to find 50 more containers. The important thing is that if one can’t do something, then you need to cooperate.”
And the last problem, which almost all companies that have already decided to go on the Russian market have to deal with, is a shortage of highly qualified personnel. But it can also be solved. “Because I’m more familiar with office staff, I am pleased to say that we have always managed to find people with a good basic education, adequate for the work we do in the office”, said Koerner. “Sometimes they have a lack of the knowledge of foreign languages. But they are ready to study. Our factory is located 100 km away from Moscow in a Moscow suburb, so it is difficult to find good staff that know the details of international cargo transportation and container transport. But in our company we are working on improving the skills of staff. And our workers want it too”. H. Rumfeld, whose company only plans to enter Russian market, said that his company will rely on educated and ambitious young people who are able to make quick decisions.
Relations between workers and management inside the companies and salaries, for sure, play an important role here. “Salaries in Moscow are quite high”, said M. Brenneiser. “With regard to workers unions, we are ready to have a dialogue with them if necessary”.
“We don’t have very high salaries in our company”, said K. Koerner. “And I know that there have been attempts to implement trade unions in our company, but our workers did not go for it. If employees are loyal and the employer can maintain such an atmosphere, the trade unions are no longer needed”.
Despite all the difficulties, all the speakers have agreed that doing business in Russia is quite comfortable. “My home is Germany, but Russia is my second home”, said M. Brenneiser. “Every morning in Hamburg I was driving at work and I always knew what I can expect during the day, but here I always think: what will happen today? In Russia you are always on the move, so it is always interesting”.
By Christina Alexandrova
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[DETAIL_TEXT] => Unclear, but Interesting
Strange as it may seem, the first reason is mentality. As it turns out, it is not difficult to adapt to the Russian market especially for those, who have already been here during the USSR. “I studied Russian language and the geography of logistics when I was student in Minsk in 1974. So today I feel at home here”, said John Keir, CEO of Ross Learmont Ltd. “People say that in Russia you face many difficulties all the time. When I started to work in the Soviet Union, these were mostly political problems. But if we speak about human relations, it was always easy for me to communicate with people. But I would like to compare the Russian market to the famous Russian book “Master and Margarita” - sometimes it is unclear, but very interesting”.
Kristian Koerner, logistics director of Profine RUS also began his career in Russia many years ago. “I just fell in love with this country”, he said. “And realized that the Russian mentality is very close to my own, sometimes even closer than German. For Europeans, Russia is still closer than China, Korea or Japan. Here is a really interesting market with so many opportunities. If we talk about business, all regulations in Europe are strict: you have to do your job from a to z, and you can’t deviate. But in Russia, many rules are not concrete; therefore there is an opportunity to move forward with your partners”.
However, for those who are unfamiliar with working here, it is still difficult to imagine what you will have to deal with in the future. For example, Heiko Rumfeld, commercial director of Duisport Agency, notes that he is used to regulated processes in Europe, but in Russia this presumption should be changed. “I have heard a lot about the quirks of working here”, he said. “For example, I heard that a personal relationship with the customer is very important in Russia”.
But many foreigners also heard that relations with customers are sometimes dishonest. Could it be true? “Before coming to Russia I was told a lot of scary things. I was told that during the business meetings, all suppliers are invited to a round table to drink vodka. And only those who managed to drink ten bottles will get the contract. But it’s not true. In Russia people play fairly by the rules. Here the client reports what companies offered him a contract and on what terms”, said K. Koerner.
The representatives of the companies agree that the relationship with the client in Russia is no different from what you can see in any other country. They are always based on trust, compliance with the contract and mutual understanding. But at the same time, the client dictates the terms. Some companies coming to Russia still rely on tactics of “ here today, gone tomorrow”. But, according to CEO of STS Logistics Mark Brenneiser, they soon discover that you cannot achieve anything that way, and you have to work on long-term relationships.
Competition Through Cooperation
In Russia public bodies also play an important role in the regulation of the business sector. Bureaucracy and complicated court systems can scare away foreigners. But, according to H. Rumfeld, these difficulties are always surmountable. “This rule applies both in Germany and in Russia. As for solutions, we are committed to the letter of the law. We will never commit unlawful acts or acts that are contrary to the norms of business ethics. This approach has also proved its worth to Russian customers. We successfully develop business with Russian companies and will continue to do so”, he said.
According to M. Brenneiser, Russian legislation is well structured. But because his company is dealing with customs, he has to deal with the judicial system a lot. “And success often depends on who you are in dispute with. If it is the local oligarch, you may not win the case. Therefore, in my opinion, in Europe, in Germany particularly, you have a better chance of success”, he said.
As noted by all panelists, competition in Russia today is fair and open, but this is all based on personal relationships. To be successful it is important also to cooperate with your business rivals. “I would like to give an example from the times of the USSR, said D.Keir - One company wanted to arrange the carriage of liquid cargo. But it had to find 100 tank-containers; each was worth the $ 25000. Our company was willing to give only 50 of them. And I contacted our colleagues (or competitors), to find 50 more containers. The important thing is that if one can’t do something, then you need to cooperate.”
And the last problem, which almost all companies that have already decided to go on the Russian market have to deal with, is a shortage of highly qualified personnel. But it can also be solved. “Because I’m more familiar with office staff, I am pleased to say that we have always managed to find people with a good basic education, adequate for the work we do in the office”, said Koerner. “Sometimes they have a lack of the knowledge of foreign languages. But they are ready to study. Our factory is located 100 km away from Moscow in a Moscow suburb, so it is difficult to find good staff that know the details of international cargo transportation and container transport. But in our company we are working on improving the skills of staff. And our workers want it too”. H. Rumfeld, whose company only plans to enter Russian market, said that his company will rely on educated and ambitious young people who are able to make quick decisions.
Relations between workers and management inside the companies and salaries, for sure, play an important role here. “Salaries in Moscow are quite high”, said M. Brenneiser. “With regard to workers unions, we are ready to have a dialogue with them if necessary”.
“We don’t have very high salaries in our company”, said K. Koerner. “And I know that there have been attempts to implement trade unions in our company, but our workers did not go for it. If employees are loyal and the employer can maintain such an atmosphere, the trade unions are no longer needed”.
Despite all the difficulties, all the speakers have agreed that doing business in Russia is quite comfortable. “My home is Germany, but Russia is my second home”, said M. Brenneiser. “Every morning in Hamburg I was driving at work and I always knew what I can expect during the day, but here I always think: what will happen today? In Russia you are always on the move, so it is always interesting”.
By Christina Alexandrova
[~DETAIL_TEXT] => Unclear, but Interesting
Strange as it may seem, the first reason is mentality. As it turns out, it is not difficult to adapt to the Russian market especially for those, who have already been here during the USSR. “I studied Russian language and the geography of logistics when I was student in Minsk in 1974. So today I feel at home here”, said John Keir, CEO of Ross Learmont Ltd. “People say that in Russia you face many difficulties all the time. When I started to work in the Soviet Union, these were mostly political problems. But if we speak about human relations, it was always easy for me to communicate with people. But I would like to compare the Russian market to the famous Russian book “Master and Margarita” - sometimes it is unclear, but very interesting”.
Kristian Koerner, logistics director of Profine RUS also began his career in Russia many years ago. “I just fell in love with this country”, he said. “And realized that the Russian mentality is very close to my own, sometimes even closer than German. For Europeans, Russia is still closer than China, Korea or Japan. Here is a really interesting market with so many opportunities. If we talk about business, all regulations in Europe are strict: you have to do your job from a to z, and you can’t deviate. But in Russia, many rules are not concrete; therefore there is an opportunity to move forward with your partners”.
However, for those who are unfamiliar with working here, it is still difficult to imagine what you will have to deal with in the future. For example, Heiko Rumfeld, commercial director of Duisport Agency, notes that he is used to regulated processes in Europe, but in Russia this presumption should be changed. “I have heard a lot about the quirks of working here”, he said. “For example, I heard that a personal relationship with the customer is very important in Russia”.
But many foreigners also heard that relations with customers are sometimes dishonest. Could it be true? “Before coming to Russia I was told a lot of scary things. I was told that during the business meetings, all suppliers are invited to a round table to drink vodka. And only those who managed to drink ten bottles will get the contract. But it’s not true. In Russia people play fairly by the rules. Here the client reports what companies offered him a contract and on what terms”, said K. Koerner.
The representatives of the companies agree that the relationship with the client in Russia is no different from what you can see in any other country. They are always based on trust, compliance with the contract and mutual understanding. But at the same time, the client dictates the terms. Some companies coming to Russia still rely on tactics of “ here today, gone tomorrow”. But, according to CEO of STS Logistics Mark Brenneiser, they soon discover that you cannot achieve anything that way, and you have to work on long-term relationships.
Competition Through Cooperation
In Russia public bodies also play an important role in the regulation of the business sector. Bureaucracy and complicated court systems can scare away foreigners. But, according to H. Rumfeld, these difficulties are always surmountable. “This rule applies both in Germany and in Russia. As for solutions, we are committed to the letter of the law. We will never commit unlawful acts or acts that are contrary to the norms of business ethics. This approach has also proved its worth to Russian customers. We successfully develop business with Russian companies and will continue to do so”, he said.
According to M. Brenneiser, Russian legislation is well structured. But because his company is dealing with customs, he has to deal with the judicial system a lot. “And success often depends on who you are in dispute with. If it is the local oligarch, you may not win the case. Therefore, in my opinion, in Europe, in Germany particularly, you have a better chance of success”, he said.
As noted by all panelists, competition in Russia today is fair and open, but this is all based on personal relationships. To be successful it is important also to cooperate with your business rivals. “I would like to give an example from the times of the USSR, said D.Keir - One company wanted to arrange the carriage of liquid cargo. But it had to find 100 tank-containers; each was worth the $ 25000. Our company was willing to give only 50 of them. And I contacted our colleagues (or competitors), to find 50 more containers. The important thing is that if one can’t do something, then you need to cooperate.”
And the last problem, which almost all companies that have already decided to go on the Russian market have to deal with, is a shortage of highly qualified personnel. But it can also be solved. “Because I’m more familiar with office staff, I am pleased to say that we have always managed to find people with a good basic education, adequate for the work we do in the office”, said Koerner. “Sometimes they have a lack of the knowledge of foreign languages. But they are ready to study. Our factory is located 100 km away from Moscow in a Moscow suburb, so it is difficult to find good staff that know the details of international cargo transportation and container transport. But in our company we are working on improving the skills of staff. And our workers want it too”. H. Rumfeld, whose company only plans to enter Russian market, said that his company will rely on educated and ambitious young people who are able to make quick decisions.
Relations between workers and management inside the companies and salaries, for sure, play an important role here. “Salaries in Moscow are quite high”, said M. Brenneiser. “With regard to workers unions, we are ready to have a dialogue with them if necessary”.
“We don’t have very high salaries in our company”, said K. Koerner. “And I know that there have been attempts to implement trade unions in our company, but our workers did not go for it. If employees are loyal and the employer can maintain such an atmosphere, the trade unions are no longer needed”.
Despite all the difficulties, all the speakers have agreed that doing business in Russia is quite comfortable. “My home is Germany, but Russia is my second home”, said M. Brenneiser. “Every morning in Hamburg I was driving at work and I always knew what I can expect during the day, but here I always think: what will happen today? In Russia you are always on the move, so it is always interesting”.
By Christina Alexandrova
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[DETAIL_TEXT] => UVZ and Bombardier Sign Agreements to Launch Railcar Manufacturing JV
On July 12, 2012, Bombardier Transportation and Russian rail manufacturer UVZ signed co-operation agreements to jointly develop and sell state-of-the-art metros and trams. Russia’s Prime Minister Dmitry Medvedev took part in the signing ceremony in Yekaterinburg. Oleg Sienko, Chief Executive Officer of UVZ and André Navarri, President and Chief Operating Officer of Bombardier Transportation, signed the agreement on behalf of the two companies.
Bombardier and UVZ will jointly develop and market metro trains specifically designed for the challenging requirements of Moscow Metro and other cities in the Commonwealth of Independent States (CIS).
Bombardier also provides UVZ with a licence to manufacture and sell low-floor trams with Bombardier technology in Russia. The licensed product is a variant of the BOMBARDIER FLEXITY platform of vehicles operating worldwide, designed for operation mainly on existing networks.
Both products feature the world’s most advanced technologies in vehicle manufacturing, including the reliable BOMBARDIER FLEXX bogies and BOMBARDIER MITRAC propulsion and control system.
“Our agreement to introduce these modern metros and trams to Russia will significantly push the development of this mass transit sector and enhance the image of major Russian cities in the run-up to the 2018 world football championship,” said Oleg Sienko. “Our joint engineering and production will ensure that the world’s leading urban transport is available to Russians and built in Russia.”
Eurosib Launches New Novosibirsk – Yakutia Container Service
Eurosib SPb – Transport Systems, one of the largest private railway operators in Russia, launched a new weekly container service between Novosibirsk and Yakutia.
The service envisages cargo dispatch by container trains from Inya-Vostochnaya station, which serves the Eurosib’s terminal in Novosibirsk, and its transportation to the Lena-perevalka station (the Osetrovsky river port) with further delivery of empty boxes to Novosibirsk. The pilot container train left the Inya-Vostochnaya station for the Osetrovsky port on June 12, 2012. The consignor was Eurosib-Terminal-Novosibirsk CJSC,and the total volume of cargo amounted to 118 TEU. The delivery time to Yakutia was less than two days.
The Novosibirsk – Yakutia container service is the company’s second cargo transportation project using the round trip system.
RZD Joins Container Transit JV Russia, China, Kazakhstan, and Germany have formed a joint venture for the transit of container cargo by rail from China to Europe.
The new company plans to transport 5,800 TEU before the end of 2012. Cargo traffic is expected to increase to 50,000 TEU by 2015.
Russian Railways Logistics, a subsidiary of Russian Railways, has become a co-founder of the venture called YuXinOu (Chongqing) Logistics Co. Ltd. Other co-founders include Chongqing Transportation Holding Group (CQCT), China Railway International Multimodal Transport Co. (CRIMT), Germany’s Schenker China Ltd., and Kazakh company Kaztransservis. The Chinese companies will be entitled to a 51.1% stake in the joint venture, while each of the other partners will receive a 16.3% stake.
The main activity of YuXinOu (Chongqing) Logistics Co. Ltd. will be organising regular rail container shipments between Chongqing in China and Duisburg in Germany. The first container train from Chongqing to Duisburg was scheduled for the end of June 2012.
The company will also provide freight forwarding, customs, information, consulting and other services related to the transport of international container traffic. The ultimate goal is to create a logistics company which provides third-party logistics services (3 PL) “door to door”. The company’s business model provides for RZD Logistics to deliver the necessary support, including its knowledge of the Russian freight transportation market, as well as technological issues associated with the carrier’s operations.
Potential clients of the joint venture are major international companies in electronic information technology, manufacturers of components and units, machinery, the chemical, aviation and software industries and in other sectors which are concentrated in the Chongqing metropolis.
DLRR to Carry out $11.6 Million Machine Building Project
Daugavpils Lokomotivju Remonta Rupnica (DLRR, Daugavpils Locomotive Repair Plant) would be co-financed by one of the European funds to carry out a project in the machine-building sector.
Representatives of the plant say that the total cost of the project is $11.6 million, and the European Union will co-finance 35% of this sum. The project will be carried out before the middle of 2013. Its goal is to modernise production and make new products. Co-owners of DLRR are Skinest Rail (47.97%) and Spacecom (25.27%).
[~DETAIL_TEXT] => UVZ and Bombardier Sign Agreements to Launch Railcar Manufacturing JV
On July 12, 2012, Bombardier Transportation and Russian rail manufacturer UVZ signed co-operation agreements to jointly develop and sell state-of-the-art metros and trams. Russia’s Prime Minister Dmitry Medvedev took part in the signing ceremony in Yekaterinburg. Oleg Sienko, Chief Executive Officer of UVZ and André Navarri, President and Chief Operating Officer of Bombardier Transportation, signed the agreement on behalf of the two companies.
Bombardier and UVZ will jointly develop and market metro trains specifically designed for the challenging requirements of Moscow Metro and other cities in the Commonwealth of Independent States (CIS).
Bombardier also provides UVZ with a licence to manufacture and sell low-floor trams with Bombardier technology in Russia. The licensed product is a variant of the BOMBARDIER FLEXITY platform of vehicles operating worldwide, designed for operation mainly on existing networks.
Both products feature the world’s most advanced technologies in vehicle manufacturing, including the reliable BOMBARDIER FLEXX bogies and BOMBARDIER MITRAC propulsion and control system.
“Our agreement to introduce these modern metros and trams to Russia will significantly push the development of this mass transit sector and enhance the image of major Russian cities in the run-up to the 2018 world football championship,” said Oleg Sienko. “Our joint engineering and production will ensure that the world’s leading urban transport is available to Russians and built in Russia.”
Eurosib Launches New Novosibirsk – Yakutia Container Service
Eurosib SPb – Transport Systems, one of the largest private railway operators in Russia, launched a new weekly container service between Novosibirsk and Yakutia.
The service envisages cargo dispatch by container trains from Inya-Vostochnaya station, which serves the Eurosib’s terminal in Novosibirsk, and its transportation to the Lena-perevalka station (the Osetrovsky river port) with further delivery of empty boxes to Novosibirsk. The pilot container train left the Inya-Vostochnaya station for the Osetrovsky port on June 12, 2012. The consignor was Eurosib-Terminal-Novosibirsk CJSC,and the total volume of cargo amounted to 118 TEU. The delivery time to Yakutia was less than two days.
The Novosibirsk – Yakutia container service is the company’s second cargo transportation project using the round trip system.
RZD Joins Container Transit JV Russia, China, Kazakhstan, and Germany have formed a joint venture for the transit of container cargo by rail from China to Europe.
The new company plans to transport 5,800 TEU before the end of 2012. Cargo traffic is expected to increase to 50,000 TEU by 2015.
Russian Railways Logistics, a subsidiary of Russian Railways, has become a co-founder of the venture called YuXinOu (Chongqing) Logistics Co. Ltd. Other co-founders include Chongqing Transportation Holding Group (CQCT), China Railway International Multimodal Transport Co. (CRIMT), Germany’s Schenker China Ltd., and Kazakh company Kaztransservis. The Chinese companies will be entitled to a 51.1% stake in the joint venture, while each of the other partners will receive a 16.3% stake.
The main activity of YuXinOu (Chongqing) Logistics Co. Ltd. will be organising regular rail container shipments between Chongqing in China and Duisburg in Germany. The first container train from Chongqing to Duisburg was scheduled for the end of June 2012.
The company will also provide freight forwarding, customs, information, consulting and other services related to the transport of international container traffic. The ultimate goal is to create a logistics company which provides third-party logistics services (3 PL) “door to door”. The company’s business model provides for RZD Logistics to deliver the necessary support, including its knowledge of the Russian freight transportation market, as well as technological issues associated with the carrier’s operations.
Potential clients of the joint venture are major international companies in electronic information technology, manufacturers of components and units, machinery, the chemical, aviation and software industries and in other sectors which are concentrated in the Chongqing metropolis.
DLRR to Carry out $11.6 Million Machine Building Project
Daugavpils Lokomotivju Remonta Rupnica (DLRR, Daugavpils Locomotive Repair Plant) would be co-financed by one of the European funds to carry out a project in the machine-building sector.
Representatives of the plant say that the total cost of the project is $11.6 million, and the European Union will co-finance 35% of this sum. The project will be carried out before the middle of 2013. Its goal is to modernise production and make new products. Co-owners of DLRR are Skinest Rail (47.97%) and Spacecom (25.27%).
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[DETAIL_TEXT] => UVZ and Bombardier Sign Agreements to Launch Railcar Manufacturing JV
On July 12, 2012, Bombardier Transportation and Russian rail manufacturer UVZ signed co-operation agreements to jointly develop and sell state-of-the-art metros and trams. Russia’s Prime Minister Dmitry Medvedev took part in the signing ceremony in Yekaterinburg. Oleg Sienko, Chief Executive Officer of UVZ and André Navarri, President and Chief Operating Officer of Bombardier Transportation, signed the agreement on behalf of the two companies.
Bombardier and UVZ will jointly develop and market metro trains specifically designed for the challenging requirements of Moscow Metro and other cities in the Commonwealth of Independent States (CIS).
Bombardier also provides UVZ with a licence to manufacture and sell low-floor trams with Bombardier technology in Russia. The licensed product is a variant of the BOMBARDIER FLEXITY platform of vehicles operating worldwide, designed for operation mainly on existing networks.
Both products feature the world’s most advanced technologies in vehicle manufacturing, including the reliable BOMBARDIER FLEXX bogies and BOMBARDIER MITRAC propulsion and control system.
“Our agreement to introduce these modern metros and trams to Russia will significantly push the development of this mass transit sector and enhance the image of major Russian cities in the run-up to the 2018 world football championship,” said Oleg Sienko. “Our joint engineering and production will ensure that the world’s leading urban transport is available to Russians and built in Russia.”
Eurosib Launches New Novosibirsk – Yakutia Container Service
Eurosib SPb – Transport Systems, one of the largest private railway operators in Russia, launched a new weekly container service between Novosibirsk and Yakutia.
The service envisages cargo dispatch by container trains from Inya-Vostochnaya station, which serves the Eurosib’s terminal in Novosibirsk, and its transportation to the Lena-perevalka station (the Osetrovsky river port) with further delivery of empty boxes to Novosibirsk. The pilot container train left the Inya-Vostochnaya station for the Osetrovsky port on June 12, 2012. The consignor was Eurosib-Terminal-Novosibirsk CJSC,and the total volume of cargo amounted to 118 TEU. The delivery time to Yakutia was less than two days.
The Novosibirsk – Yakutia container service is the company’s second cargo transportation project using the round trip system.
RZD Joins Container Transit JV Russia, China, Kazakhstan, and Germany have formed a joint venture for the transit of container cargo by rail from China to Europe.
The new company plans to transport 5,800 TEU before the end of 2012. Cargo traffic is expected to increase to 50,000 TEU by 2015.
Russian Railways Logistics, a subsidiary of Russian Railways, has become a co-founder of the venture called YuXinOu (Chongqing) Logistics Co. Ltd. Other co-founders include Chongqing Transportation Holding Group (CQCT), China Railway International Multimodal Transport Co. (CRIMT), Germany’s Schenker China Ltd., and Kazakh company Kaztransservis. The Chinese companies will be entitled to a 51.1% stake in the joint venture, while each of the other partners will receive a 16.3% stake.
The main activity of YuXinOu (Chongqing) Logistics Co. Ltd. will be organising regular rail container shipments between Chongqing in China and Duisburg in Germany. The first container train from Chongqing to Duisburg was scheduled for the end of June 2012.
The company will also provide freight forwarding, customs, information, consulting and other services related to the transport of international container traffic. The ultimate goal is to create a logistics company which provides third-party logistics services (3 PL) “door to door”. The company’s business model provides for RZD Logistics to deliver the necessary support, including its knowledge of the Russian freight transportation market, as well as technological issues associated with the carrier’s operations.
Potential clients of the joint venture are major international companies in electronic information technology, manufacturers of components and units, machinery, the chemical, aviation and software industries and in other sectors which are concentrated in the Chongqing metropolis.
DLRR to Carry out $11.6 Million Machine Building Project
Daugavpils Lokomotivju Remonta Rupnica (DLRR, Daugavpils Locomotive Repair Plant) would be co-financed by one of the European funds to carry out a project in the machine-building sector.
Representatives of the plant say that the total cost of the project is $11.6 million, and the European Union will co-finance 35% of this sum. The project will be carried out before the middle of 2013. Its goal is to modernise production and make new products. Co-owners of DLRR are Skinest Rail (47.97%) and Spacecom (25.27%).
[~DETAIL_TEXT] => UVZ and Bombardier Sign Agreements to Launch Railcar Manufacturing JV
On July 12, 2012, Bombardier Transportation and Russian rail manufacturer UVZ signed co-operation agreements to jointly develop and sell state-of-the-art metros and trams. Russia’s Prime Minister Dmitry Medvedev took part in the signing ceremony in Yekaterinburg. Oleg Sienko, Chief Executive Officer of UVZ and André Navarri, President and Chief Operating Officer of Bombardier Transportation, signed the agreement on behalf of the two companies.
Bombardier and UVZ will jointly develop and market metro trains specifically designed for the challenging requirements of Moscow Metro and other cities in the Commonwealth of Independent States (CIS).
Bombardier also provides UVZ with a licence to manufacture and sell low-floor trams with Bombardier technology in Russia. The licensed product is a variant of the BOMBARDIER FLEXITY platform of vehicles operating worldwide, designed for operation mainly on existing networks.
Both products feature the world’s most advanced technologies in vehicle manufacturing, including the reliable BOMBARDIER FLEXX bogies and BOMBARDIER MITRAC propulsion and control system.
“Our agreement to introduce these modern metros and trams to Russia will significantly push the development of this mass transit sector and enhance the image of major Russian cities in the run-up to the 2018 world football championship,” said Oleg Sienko. “Our joint engineering and production will ensure that the world’s leading urban transport is available to Russians and built in Russia.”
Eurosib Launches New Novosibirsk – Yakutia Container Service
Eurosib SPb – Transport Systems, one of the largest private railway operators in Russia, launched a new weekly container service between Novosibirsk and Yakutia.
The service envisages cargo dispatch by container trains from Inya-Vostochnaya station, which serves the Eurosib’s terminal in Novosibirsk, and its transportation to the Lena-perevalka station (the Osetrovsky river port) with further delivery of empty boxes to Novosibirsk. The pilot container train left the Inya-Vostochnaya station for the Osetrovsky port on June 12, 2012. The consignor was Eurosib-Terminal-Novosibirsk CJSC,and the total volume of cargo amounted to 118 TEU. The delivery time to Yakutia was less than two days.
The Novosibirsk – Yakutia container service is the company’s second cargo transportation project using the round trip system.
RZD Joins Container Transit JV Russia, China, Kazakhstan, and Germany have formed a joint venture for the transit of container cargo by rail from China to Europe.
The new company plans to transport 5,800 TEU before the end of 2012. Cargo traffic is expected to increase to 50,000 TEU by 2015.
Russian Railways Logistics, a subsidiary of Russian Railways, has become a co-founder of the venture called YuXinOu (Chongqing) Logistics Co. Ltd. Other co-founders include Chongqing Transportation Holding Group (CQCT), China Railway International Multimodal Transport Co. (CRIMT), Germany’s Schenker China Ltd., and Kazakh company Kaztransservis. The Chinese companies will be entitled to a 51.1% stake in the joint venture, while each of the other partners will receive a 16.3% stake.
The main activity of YuXinOu (Chongqing) Logistics Co. Ltd. will be organising regular rail container shipments between Chongqing in China and Duisburg in Germany. The first container train from Chongqing to Duisburg was scheduled for the end of June 2012.
The company will also provide freight forwarding, customs, information, consulting and other services related to the transport of international container traffic. The ultimate goal is to create a logistics company which provides third-party logistics services (3 PL) “door to door”. The company’s business model provides for RZD Logistics to deliver the necessary support, including its knowledge of the Russian freight transportation market, as well as technological issues associated with the carrier’s operations.
Potential clients of the joint venture are major international companies in electronic information technology, manufacturers of components and units, machinery, the chemical, aviation and software industries and in other sectors which are concentrated in the Chongqing metropolis.
DLRR to Carry out $11.6 Million Machine Building Project
Daugavpils Lokomotivju Remonta Rupnica (DLRR, Daugavpils Locomotive Repair Plant) would be co-financed by one of the European funds to carry out a project in the machine-building sector.
Representatives of the plant say that the total cost of the project is $11.6 million, and the European Union will co-finance 35% of this sum. The project will be carried out before the middle of 2013. Its goal is to modernise production and make new products. Co-owners of DLRR are Skinest Rail (47.97%) and Spacecom (25.27%).
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[DETAIL_TEXT] => Premium-Sector Is Priority
According to Evgeny Alexeev from the Institute of Natural Monopolies, there are two possible forms of competition in the long-distance passenger transportation sector now – “on the line” and “for the line”. In other words, either several transporters compete with each other on a line and a passenger can choose any of them, or there is only one company on the line, which is selected in a competition. In the second case, companies compete at the stage of applications submitting, then the best bidder is chosen, but a passenger has practically no choice. The expert thinks that competition “on the line” is still “embryonic”. Two independent private companies work in the super-premium segment on the Moscow – St Petersburg line. They are TC Grand Service Express CJSC and Tver Express LLC (“Grand Express” and “Megapolis” trains respectively), and they compete with the Federal Passenger Company (FPC) for passengers willing to pay for premium services.
Another company – TransClassService CJSC – incorporates its branded railcars into FPC trains. Thus, a passenger, who buys a ticket without paying attention to abbreviations, can be unaware that there are railcars of different operators in a train – some clients are automatically “re-directed” to the private company. The wagons of Trans ClassService run on 15 lines.
According to passenger turnover, the share of the FPC in the long-distance transportation varies from 98% to 99%. “Private independent transporters are eager to operate in the most profitable transport sector, which explains the choice of lines serviced by private trains and the quality of services provided. There have always been a lot of passengers ready to pay for their comfort on the line between two Russian capitals, so private companies often present them as “wheeled hotels”. Mass consumers are not the target audience of these services,” says Mr Alexeev. Also, there have been examples of private companies’ attempts to enter the market ending in fiasco. “Megapolis” trains used to service the Moscow – Kazan and Moscow – Samara lines, but tickets on them were not bought even after putting discounts into operation. So, the transporter decided to cancel the trains. Another company – Passenger Transportation LLC – had day- and night coaches on the Moscow – St Petersburg line. The efforts of the company also came to naught, though it provided services of a rather high quality, its price policy was moderate, and its rolling stock required a special design. The occupancy rate was also quite normal in the electric trains. Nevertheless, transportation in the regulated sector is unprofitable for private companies, and in the non-regulated sector – just about breaks even.
Competition for Routes?
The average costs of this type of transportation are not attractive to private business for a number of reasons. The main one is low profitability, because entering the market goes hand in hand with high expenses at the initial stage. In its turn, the Federal Passenger Company has a number of objective advantages: the network-wide federal transporter suffers smaller variable expenses. Another advantage is the range of services, which the FPC can offer its customers. In the words of Mikhail Akulov, Vice President of RZD, CEO of the Federal Passenger Company, possible expansion of Wi-Fi services on branded long-distance trains, organisation of duty free in “Allegro” and other branded international trains are discussed. The project of cars transportation in special cargo baggage railcars included into a passenger train between Russia and Finland was launched in June.
Representatives of operator companies say that technological difficulties are the most serious, especially those arising when a company purchases or rents rolling stock, – passenger railcars and locomotives. The rolling stock has to be maintained and repaired. Thus, the company has to have depots along all lines where its trains operate. If the scale of activity is not big, and there is no significant competition between the private and federal transporters, the company can use FPC’s depots on a contractual basis.
“If “barriers” are insurmountable difficulties, we haven’t faced them,” says Maxim Savitsky, Head of the Commercial Department at TC Grand Service Express. “We operate the “Grand Express” train, in particular the dining cars, pack meal boxes, organise charter, tourist and other trips. Naturally, there are some difficulties. For example, to repair internal equipment, we send railcars to Zircon-Service LLC, where they were made. Meanwhile, the rules at Scherbinka station, where the plant is located, do not allow making some en route operations with passenger railcars.” The representative of the company believes that the most important thing is to continue to follow the course of the passenger sector reform. “Creation of competition is favourable for the sector development. Our partners from RZD and the company’s subsidiaries and affiliates meet all our requests and initiatives with understanding and professionalism. Amid openness and transparency, he survives who can organise himself,” he emphasises.
Mr Alexeev notes that unlike in the EU states, the mechanism of competitive distribution of train paths rail routes among operators (long-distance and commuter transportation, and cargo transportation) is not developed in Russia, and the process of their allocation to private carriers is not transparent. It is during the process of train paths distribution, that organisational barriers caused by unfair competition reveal themselves. Not every schedule may be suitable for passengers, departure and arrival time periods as well as the carrying capacity of the infrastructure are limited. Therefore, in the opinion of experts, competition “on the line” can hardly be useful. If there are several transporters with equal rights servicing all categories of passengers on a line, the activity of each of them is likely to be less profitable. It is more reasonable to launch one long and full train than two short and half-empty. Also, one should remember that the carrying capacity of the lines is limited.
Specialists of the Institute of Natural Monopolies think that the development of competition “for the line” is especially important to improve the quality of services provided to passengers. For example, separate directions in some regions may be tendered (regional or short interregional lines) to minimise barriers for companies entering the market. This may give a boost to competition development, but it will be local and small. Moreover, regular passenger traffic organisation is required. As a reminder, a relative bill has been given from one department to another for several years already. Tenders for franchise and infrastructure should be developed. Without these basic documents and principles, it will be impossible to develop competition in the long-distance passenger transportation sector.
By Oksana Perepelitsa
[~DETAIL_TEXT] => Premium-Sector Is Priority
According to Evgeny Alexeev from the Institute of Natural Monopolies, there are two possible forms of competition in the long-distance passenger transportation sector now – “on the line” and “for the line”. In other words, either several transporters compete with each other on a line and a passenger can choose any of them, or there is only one company on the line, which is selected in a competition. In the second case, companies compete at the stage of applications submitting, then the best bidder is chosen, but a passenger has practically no choice. The expert thinks that competition “on the line” is still “embryonic”. Two independent private companies work in the super-premium segment on the Moscow – St Petersburg line. They are TC Grand Service Express CJSC and Tver Express LLC (“Grand Express” and “Megapolis” trains respectively), and they compete with the Federal Passenger Company (FPC) for passengers willing to pay for premium services.
Another company – TransClassService CJSC – incorporates its branded railcars into FPC trains. Thus, a passenger, who buys a ticket without paying attention to abbreviations, can be unaware that there are railcars of different operators in a train – some clients are automatically “re-directed” to the private company. The wagons of Trans ClassService run on 15 lines.
According to passenger turnover, the share of the FPC in the long-distance transportation varies from 98% to 99%. “Private independent transporters are eager to operate in the most profitable transport sector, which explains the choice of lines serviced by private trains and the quality of services provided. There have always been a lot of passengers ready to pay for their comfort on the line between two Russian capitals, so private companies often present them as “wheeled hotels”. Mass consumers are not the target audience of these services,” says Mr Alexeev. Also, there have been examples of private companies’ attempts to enter the market ending in fiasco. “Megapolis” trains used to service the Moscow – Kazan and Moscow – Samara lines, but tickets on them were not bought even after putting discounts into operation. So, the transporter decided to cancel the trains. Another company – Passenger Transportation LLC – had day- and night coaches on the Moscow – St Petersburg line. The efforts of the company also came to naught, though it provided services of a rather high quality, its price policy was moderate, and its rolling stock required a special design. The occupancy rate was also quite normal in the electric trains. Nevertheless, transportation in the regulated sector is unprofitable for private companies, and in the non-regulated sector – just about breaks even.
Competition for Routes?
The average costs of this type of transportation are not attractive to private business for a number of reasons. The main one is low profitability, because entering the market goes hand in hand with high expenses at the initial stage. In its turn, the Federal Passenger Company has a number of objective advantages: the network-wide federal transporter suffers smaller variable expenses. Another advantage is the range of services, which the FPC can offer its customers. In the words of Mikhail Akulov, Vice President of RZD, CEO of the Federal Passenger Company, possible expansion of Wi-Fi services on branded long-distance trains, organisation of duty free in “Allegro” and other branded international trains are discussed. The project of cars transportation in special cargo baggage railcars included into a passenger train between Russia and Finland was launched in June.
Representatives of operator companies say that technological difficulties are the most serious, especially those arising when a company purchases or rents rolling stock, – passenger railcars and locomotives. The rolling stock has to be maintained and repaired. Thus, the company has to have depots along all lines where its trains operate. If the scale of activity is not big, and there is no significant competition between the private and federal transporters, the company can use FPC’s depots on a contractual basis.
“If “barriers” are insurmountable difficulties, we haven’t faced them,” says Maxim Savitsky, Head of the Commercial Department at TC Grand Service Express. “We operate the “Grand Express” train, in particular the dining cars, pack meal boxes, organise charter, tourist and other trips. Naturally, there are some difficulties. For example, to repair internal equipment, we send railcars to Zircon-Service LLC, where they were made. Meanwhile, the rules at Scherbinka station, where the plant is located, do not allow making some en route operations with passenger railcars.” The representative of the company believes that the most important thing is to continue to follow the course of the passenger sector reform. “Creation of competition is favourable for the sector development. Our partners from RZD and the company’s subsidiaries and affiliates meet all our requests and initiatives with understanding and professionalism. Amid openness and transparency, he survives who can organise himself,” he emphasises.
Mr Alexeev notes that unlike in the EU states, the mechanism of competitive distribution of train paths rail routes among operators (long-distance and commuter transportation, and cargo transportation) is not developed in Russia, and the process of their allocation to private carriers is not transparent. It is during the process of train paths distribution, that organisational barriers caused by unfair competition reveal themselves. Not every schedule may be suitable for passengers, departure and arrival time periods as well as the carrying capacity of the infrastructure are limited. Therefore, in the opinion of experts, competition “on the line” can hardly be useful. If there are several transporters with equal rights servicing all categories of passengers on a line, the activity of each of them is likely to be less profitable. It is more reasonable to launch one long and full train than two short and half-empty. Also, one should remember that the carrying capacity of the lines is limited.
Specialists of the Institute of Natural Monopolies think that the development of competition “for the line” is especially important to improve the quality of services provided to passengers. For example, separate directions in some regions may be tendered (regional or short interregional lines) to minimise barriers for companies entering the market. This may give a boost to competition development, but it will be local and small. Moreover, regular passenger traffic organisation is required. As a reminder, a relative bill has been given from one department to another for several years already. Tenders for franchise and infrastructure should be developed. Without these basic documents and principles, it will be impossible to develop competition in the long-distance passenger transportation sector.
By Oksana Perepelitsa
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According to Evgeny Alexeev from the Institute of Natural Monopolies, there are two possible forms of competition in the long-distance passenger transportation sector now – “on the line” and “for the line”. In other words, either several transporters compete with each other on a line and a passenger can choose any of them, or there is only one company on the line, which is selected in a competition. In the second case, companies compete at the stage of applications submitting, then the best bidder is chosen, but a passenger has practically no choice. The expert thinks that competition “on the line” is still “embryonic”. Two independent private companies work in the super-premium segment on the Moscow – St Petersburg line. They are TC Grand Service Express CJSC and Tver Express LLC (“Grand Express” and “Megapolis” trains respectively), and they compete with the Federal Passenger Company (FPC) for passengers willing to pay for premium services.
Another company – TransClassService CJSC – incorporates its branded railcars into FPC trains. Thus, a passenger, who buys a ticket without paying attention to abbreviations, can be unaware that there are railcars of different operators in a train – some clients are automatically “re-directed” to the private company. The wagons of Trans ClassService run on 15 lines.
According to passenger turnover, the share of the FPC in the long-distance transportation varies from 98% to 99%. “Private independent transporters are eager to operate in the most profitable transport sector, which explains the choice of lines serviced by private trains and the quality of services provided. There have always been a lot of passengers ready to pay for their comfort on the line between two Russian capitals, so private companies often present them as “wheeled hotels”. Mass consumers are not the target audience of these services,” says Mr Alexeev. Also, there have been examples of private companies’ attempts to enter the market ending in fiasco. “Megapolis” trains used to service the Moscow – Kazan and Moscow – Samara lines, but tickets on them were not bought even after putting discounts into operation. So, the transporter decided to cancel the trains. Another company – Passenger Transportation LLC – had day- and night coaches on the Moscow – St Petersburg line. The efforts of the company also came to naught, though it provided services of a rather high quality, its price policy was moderate, and its rolling stock required a special design. The occupancy rate was also quite normal in the electric trains. Nevertheless, transportation in the regulated sector is unprofitable for private companies, and in the non-regulated sector – just about breaks even.
Competition for Routes?
The average costs of this type of transportation are not attractive to private business for a number of reasons. The main one is low profitability, because entering the market goes hand in hand with high expenses at the initial stage. In its turn, the Federal Passenger Company has a number of objective advantages: the network-wide federal transporter suffers smaller variable expenses. Another advantage is the range of services, which the FPC can offer its customers. In the words of Mikhail Akulov, Vice President of RZD, CEO of the Federal Passenger Company, possible expansion of Wi-Fi services on branded long-distance trains, organisation of duty free in “Allegro” and other branded international trains are discussed. The project of cars transportation in special cargo baggage railcars included into a passenger train between Russia and Finland was launched in June.
Representatives of operator companies say that technological difficulties are the most serious, especially those arising when a company purchases or rents rolling stock, – passenger railcars and locomotives. The rolling stock has to be maintained and repaired. Thus, the company has to have depots along all lines where its trains operate. If the scale of activity is not big, and there is no significant competition between the private and federal transporters, the company can use FPC’s depots on a contractual basis.
“If “barriers” are insurmountable difficulties, we haven’t faced them,” says Maxim Savitsky, Head of the Commercial Department at TC Grand Service Express. “We operate the “Grand Express” train, in particular the dining cars, pack meal boxes, organise charter, tourist and other trips. Naturally, there are some difficulties. For example, to repair internal equipment, we send railcars to Zircon-Service LLC, where they were made. Meanwhile, the rules at Scherbinka station, where the plant is located, do not allow making some en route operations with passenger railcars.” The representative of the company believes that the most important thing is to continue to follow the course of the passenger sector reform. “Creation of competition is favourable for the sector development. Our partners from RZD and the company’s subsidiaries and affiliates meet all our requests and initiatives with understanding and professionalism. Amid openness and transparency, he survives who can organise himself,” he emphasises.
Mr Alexeev notes that unlike in the EU states, the mechanism of competitive distribution of train paths rail routes among operators (long-distance and commuter transportation, and cargo transportation) is not developed in Russia, and the process of their allocation to private carriers is not transparent. It is during the process of train paths distribution, that organisational barriers caused by unfair competition reveal themselves. Not every schedule may be suitable for passengers, departure and arrival time periods as well as the carrying capacity of the infrastructure are limited. Therefore, in the opinion of experts, competition “on the line” can hardly be useful. If there are several transporters with equal rights servicing all categories of passengers on a line, the activity of each of them is likely to be less profitable. It is more reasonable to launch one long and full train than two short and half-empty. Also, one should remember that the carrying capacity of the lines is limited.
Specialists of the Institute of Natural Monopolies think that the development of competition “for the line” is especially important to improve the quality of services provided to passengers. For example, separate directions in some regions may be tendered (regional or short interregional lines) to minimise barriers for companies entering the market. This may give a boost to competition development, but it will be local and small. Moreover, regular passenger traffic organisation is required. As a reminder, a relative bill has been given from one department to another for several years already. Tenders for franchise and infrastructure should be developed. Without these basic documents and principles, it will be impossible to develop competition in the long-distance passenger transportation sector.
By Oksana Perepelitsa
[~DETAIL_TEXT] => Premium-Sector Is Priority
According to Evgeny Alexeev from the Institute of Natural Monopolies, there are two possible forms of competition in the long-distance passenger transportation sector now – “on the line” and “for the line”. In other words, either several transporters compete with each other on a line and a passenger can choose any of them, or there is only one company on the line, which is selected in a competition. In the second case, companies compete at the stage of applications submitting, then the best bidder is chosen, but a passenger has practically no choice. The expert thinks that competition “on the line” is still “embryonic”. Two independent private companies work in the super-premium segment on the Moscow – St Petersburg line. They are TC Grand Service Express CJSC and Tver Express LLC (“Grand Express” and “Megapolis” trains respectively), and they compete with the Federal Passenger Company (FPC) for passengers willing to pay for premium services.
Another company – TransClassService CJSC – incorporates its branded railcars into FPC trains. Thus, a passenger, who buys a ticket without paying attention to abbreviations, can be unaware that there are railcars of different operators in a train – some clients are automatically “re-directed” to the private company. The wagons of Trans ClassService run on 15 lines.
According to passenger turnover, the share of the FPC in the long-distance transportation varies from 98% to 99%. “Private independent transporters are eager to operate in the most profitable transport sector, which explains the choice of lines serviced by private trains and the quality of services provided. There have always been a lot of passengers ready to pay for their comfort on the line between two Russian capitals, so private companies often present them as “wheeled hotels”. Mass consumers are not the target audience of these services,” says Mr Alexeev. Also, there have been examples of private companies’ attempts to enter the market ending in fiasco. “Megapolis” trains used to service the Moscow – Kazan and Moscow – Samara lines, but tickets on them were not bought even after putting discounts into operation. So, the transporter decided to cancel the trains. Another company – Passenger Transportation LLC – had day- and night coaches on the Moscow – St Petersburg line. The efforts of the company also came to naught, though it provided services of a rather high quality, its price policy was moderate, and its rolling stock required a special design. The occupancy rate was also quite normal in the electric trains. Nevertheless, transportation in the regulated sector is unprofitable for private companies, and in the non-regulated sector – just about breaks even.
Competition for Routes?
The average costs of this type of transportation are not attractive to private business for a number of reasons. The main one is low profitability, because entering the market goes hand in hand with high expenses at the initial stage. In its turn, the Federal Passenger Company has a number of objective advantages: the network-wide federal transporter suffers smaller variable expenses. Another advantage is the range of services, which the FPC can offer its customers. In the words of Mikhail Akulov, Vice President of RZD, CEO of the Federal Passenger Company, possible expansion of Wi-Fi services on branded long-distance trains, organisation of duty free in “Allegro” and other branded international trains are discussed. The project of cars transportation in special cargo baggage railcars included into a passenger train between Russia and Finland was launched in June.
Representatives of operator companies say that technological difficulties are the most serious, especially those arising when a company purchases or rents rolling stock, – passenger railcars and locomotives. The rolling stock has to be maintained and repaired. Thus, the company has to have depots along all lines where its trains operate. If the scale of activity is not big, and there is no significant competition between the private and federal transporters, the company can use FPC’s depots on a contractual basis.
“If “barriers” are insurmountable difficulties, we haven’t faced them,” says Maxim Savitsky, Head of the Commercial Department at TC Grand Service Express. “We operate the “Grand Express” train, in particular the dining cars, pack meal boxes, organise charter, tourist and other trips. Naturally, there are some difficulties. For example, to repair internal equipment, we send railcars to Zircon-Service LLC, where they were made. Meanwhile, the rules at Scherbinka station, where the plant is located, do not allow making some en route operations with passenger railcars.” The representative of the company believes that the most important thing is to continue to follow the course of the passenger sector reform. “Creation of competition is favourable for the sector development. Our partners from RZD and the company’s subsidiaries and affiliates meet all our requests and initiatives with understanding and professionalism. Amid openness and transparency, he survives who can organise himself,” he emphasises.
Mr Alexeev notes that unlike in the EU states, the mechanism of competitive distribution of train paths rail routes among operators (long-distance and commuter transportation, and cargo transportation) is not developed in Russia, and the process of their allocation to private carriers is not transparent. It is during the process of train paths distribution, that organisational barriers caused by unfair competition reveal themselves. Not every schedule may be suitable for passengers, departure and arrival time periods as well as the carrying capacity of the infrastructure are limited. Therefore, in the opinion of experts, competition “on the line” can hardly be useful. If there are several transporters with equal rights servicing all categories of passengers on a line, the activity of each of them is likely to be less profitable. It is more reasonable to launch one long and full train than two short and half-empty. Also, one should remember that the carrying capacity of the lines is limited.
Specialists of the Institute of Natural Monopolies think that the development of competition “for the line” is especially important to improve the quality of services provided to passengers. For example, separate directions in some regions may be tendered (regional or short interregional lines) to minimise barriers for companies entering the market. This may give a boost to competition development, but it will be local and small. Moreover, regular passenger traffic organisation is required. As a reminder, a relative bill has been given from one department to another for several years already. Tenders for franchise and infrastructure should be developed. Without these basic documents and principles, it will be impossible to develop competition in the long-distance passenger transportation sector.
By Oksana Perepelitsa
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[DETAIL_TEXT] => Status vs Ecology
The issue of the transfer of port capacities from the centre of St Petersburg has appeared on the agenda several times. Its urgency increases every year. The port’s throughput grows every year – its handling volume amounted to 59.98 million tons in 2011, a 3.3% increase as compared to the previous year. Consequently, the burden on the city’s infrastructure grows, because a large part of cargo is carried by road haulages. Trucks have almost taken over some residential districts of the city. For example, there is such a situation in the Kupchino district, where, according to Alexey Shukletsov, Executive Director of Phoenix LLC, trucks, destined for the harbor, park between apartment blocks. “Drivers practically live in their vehicles, blocking access, attracting criminals, which makes inhabitants worry,” he says.
This is only one of plenty of problems arising because of the joint existence of the port and the city. Environmental safety comes to the fore today. First of all, transportation of hazardous cargo creates a serious risk to the environment. A higher intensity of traffic in the streets negatively influences the environment and the quality of people’s life.
“Earlier, when ports were developing, little attention was paid to people,” says Alexander Shimansky, CEO of Moscow representative office of the Association of Commercial Sea Ports. “The situation has changed, and environmental issues and safety are regarded as of paramount importance during terminal construction.” Interesting as it is, stevedores do not recognise that such problem exists. According to Sea Port of St Petersburg OJSC, most cargoes are delivered to the port by railway and in summer – by river transport, consequently this activity does not impact on the city road traffic density. “In the first quarter of 2012, up to 90% of the company’s cargo flow was serviced with the help of railways. And the adjustment of railmen’s and portmen’s work shifts allowed avoiding wagon idling and even increasing the handling volume. Reconstruction of railway tracks in the First and the Second Cargo Districts of the port also helped,” the company said.
Nevertheless, back in 2010 Irog Rusu, who was the CEO of Rosmorport at that time, stated that terminals could and were to be transferred from St Petersburg. “Economists must calculate what the city will get if stevedoring companies leave this place, and are replaced with recreation areas and infrastructure for people’s leisure activities and tourist reception,” he noted.
At that time, both stevedoring companies and city authorities were against the idea, claiming that it may cause a loss of investments and deprive the city of its ‘sea capital’ status. Later, Viktor Olersky, Deputy Transport Minister of the RF, said that nobody was going to transfer the port till, at least, 2030. Meanwhile, the issue is being actively discussed in the transport community again.
Dreams Come True… but Outside the City
There are a lot of arguments for and against this decision. Let’s mention some of them. In the opinion of Andrey Karpov, Chairman of the Board of Directors of Dorn analytical bureau, the transfer of terminals from the centre of the city may help to solve a number of town-planning problems. “St Petersburg was planned to become a sea city, but in practice, there is a port and industrial zones between it and the sea. In the last few decades, St Petersburg has turned into a sandwich, where residential areas alternate with industrial zones,” he explains. The metropolis and stevedores suffer from it. “Any manufacturing capacity in the centre of a city has limited opportunities to develop (and not only for environmental reasons). Territorial and transport limitations are inevitable,” Mr Karpov reckons.
Alexander Goloviznin, Deputy CEO of Ust-Luga Company, shares his opinion. “Nowadays, practically all acting ports dream of becoming hubs, but a lot of conditions are needed for that, and a port can hardly reach this goal if it is inside a city,” he says. “It seems that if terminals are beyond the city’s boundary, cargo delivery time will increase, but this is not true. Other advantages are low traffic, less noise, and a smaller level of pollution.”
Meanwhile, as Mr Shimansky notes, the port is very important for the economy of St Petersburg. “Approximately 1 million tons of handled freight brings in RUB 140 million, contributing to the development of the city.”
Sanna Vaalgamaa, Chief Consultant at ECOBIO (Finland), pays attention to other possible negative consequences of the terminals’ transfer from the city centre. “Some cities are connected with ports from the outset. Due to the transfer of the latter, the image of ‘a port city’ will be lost forever. It can dramatically change the economic structure, and the environment, and the urban landscape, and impact tourist perception,” she thinks.
The example of San Francisco, from where the port was transferred to Oakland, proves her words. As a result, the latter is now a large business centre, and San Francisco is not high in the ranking of US cities.
How Much?
A balance should be struck in any scaled project. And this one is no exception. Some experts, for example, suggest keeping handling of containerised and general (so-called ‘clean’) cargoes in the Big Port of St Petersburg and passenger terminals, while hazardous freight should be handled outside the city. In fact, diversification of the stevedore business is going on in the northwest of Russia – there is a coal terminal in Ust-Luga, and there are oil bulk ports in Vysotsk and Primorsk.
The main questions which arise every time during the discussion about the necessity to transfer the port, are ‘to where?’ and “with whose money?” The answer to the first question is obvious. At least, taking into account the possible connecting of the city to the Leningrad region, it is discussed as the most suitable possibility. It is the port of Bronka on the southern shore of the Finnish Gulf. “Just look at the map, and you’ll understand there is no better place,” Mr Shukletsov notes. “Residential districts are far away, road accesses are developed, and one cannot imagine a modern container port without them.” Taking all factors into account – the ring road is not far away, there is an available sea channel of required depth, and an adjacent rail line – the carrying capacity of the ferry component is estimated at 260,000 units, that of the container one – at 1.9 million TEU per annum. In the words of Mr Shukletsov, tax receipts to the budget of St Petersburg will be at least RUB 1.7 billion (if the capacities are completely developed), and indirect receipts, provided by the GDP growth, will reach RUB 5.9 billion.
The answer to the second question – who can finance the transfer of the terminals – is not so obvious. “The transfer is a very expensive procedure, which will be economically unprofitable in most cases,” says Mrs Vaalgamaa.
Naturally, if the territory where the terminals are located can be used for construction of expensive houses, the city will only benefit from it. If the port’s revenue grows due to the increase in the cargo handling volume (which is possible only after the transfer), the metropolis is also interested in it. The expert states, however, that the decision on the transfer is usually based not on economic efficiency. In Europe, it is environmental safety issues. In Russia this aspect is not of top priority.
In 2006, the Committee for Transport and Transit Policy of St Petersburg analysed the efficiency of using the city land under the port terminals. The analysis showed then that its alternative usage will have a positive economic effect even if expenditure on revegetation is taken into account. “The value of the urban territory in question is defined by the tax receipts from one square metre,” Mr Karpov says. “With regard to the cost of land in the centre of St Petersburg, it would be more profitable to use the area of the First and the Second cargo districts of the port not for cargo handling, but for development of public and commercial real estate. Transport requires enormous territories and brings less money to the budget than other types of economy, and the situation becomes even worse because the land in the centre of the city is expensive.”
Foreign practice shows that the territory, which used to be occupied by a port, can be turned into something profitable. For example, in Baltimore, the territory was reconstructed for tourist needs. A similar situation took place in Glasgow and Lower Manhattan. The latter started to develop as a business district more actively after port capacities were transferred away from it. Any new town will develop around the port. To avoid possible mistakes, authorities should work on detailed planning of territories, Mr Shukletsov is sure.
“A single approach to the methods of cargo sea terminal construction, development and operation must be developed at State level. There must be only one person responsible for maximum efficiency of every square metre of the territory used for port activity,” says the expert. “And our water area is managed by federal authorities, the shore – by regional authorities, and the city, which has such a valuable asset as the port, is not eager to deal with its problems and create a single strategy for its development.” Theoretically, Mr Shukletsov believes, the interests of all parties – the city, the Transport Ministry, RZD, and the Federal Road Agency – must be taken into account. “The lack of this document causes the threat of a transport collapse and ecological problems,” he notes. “I believe that, for example, the St Petersburg Committee for Transport and Transit Policy could be in charge of the creation of the general scheme of the port development.”
In other words, to get an efficient document instead of another declaration, all interested parties, and first of all – the state, must participate in this work.
By Christina Alexandrova,
Marina Ermolenko
[~DETAIL_TEXT] => Status vs Ecology
The issue of the transfer of port capacities from the centre of St Petersburg has appeared on the agenda several times. Its urgency increases every year. The port’s throughput grows every year – its handling volume amounted to 59.98 million tons in 2011, a 3.3% increase as compared to the previous year. Consequently, the burden on the city’s infrastructure grows, because a large part of cargo is carried by road haulages. Trucks have almost taken over some residential districts of the city. For example, there is such a situation in the Kupchino district, where, according to Alexey Shukletsov, Executive Director of Phoenix LLC, trucks, destined for the harbor, park between apartment blocks. “Drivers practically live in their vehicles, blocking access, attracting criminals, which makes inhabitants worry,” he says.
This is only one of plenty of problems arising because of the joint existence of the port and the city. Environmental safety comes to the fore today. First of all, transportation of hazardous cargo creates a serious risk to the environment. A higher intensity of traffic in the streets negatively influences the environment and the quality of people’s life.
“Earlier, when ports were developing, little attention was paid to people,” says Alexander Shimansky, CEO of Moscow representative office of the Association of Commercial Sea Ports. “The situation has changed, and environmental issues and safety are regarded as of paramount importance during terminal construction.” Interesting as it is, stevedores do not recognise that such problem exists. According to Sea Port of St Petersburg OJSC, most cargoes are delivered to the port by railway and in summer – by river transport, consequently this activity does not impact on the city road traffic density. “In the first quarter of 2012, up to 90% of the company’s cargo flow was serviced with the help of railways. And the adjustment of railmen’s and portmen’s work shifts allowed avoiding wagon idling and even increasing the handling volume. Reconstruction of railway tracks in the First and the Second Cargo Districts of the port also helped,” the company said.
Nevertheless, back in 2010 Irog Rusu, who was the CEO of Rosmorport at that time, stated that terminals could and were to be transferred from St Petersburg. “Economists must calculate what the city will get if stevedoring companies leave this place, and are replaced with recreation areas and infrastructure for people’s leisure activities and tourist reception,” he noted.
At that time, both stevedoring companies and city authorities were against the idea, claiming that it may cause a loss of investments and deprive the city of its ‘sea capital’ status. Later, Viktor Olersky, Deputy Transport Minister of the RF, said that nobody was going to transfer the port till, at least, 2030. Meanwhile, the issue is being actively discussed in the transport community again.
Dreams Come True… but Outside the City
There are a lot of arguments for and against this decision. Let’s mention some of them. In the opinion of Andrey Karpov, Chairman of the Board of Directors of Dorn analytical bureau, the transfer of terminals from the centre of the city may help to solve a number of town-planning problems. “St Petersburg was planned to become a sea city, but in practice, there is a port and industrial zones between it and the sea. In the last few decades, St Petersburg has turned into a sandwich, where residential areas alternate with industrial zones,” he explains. The metropolis and stevedores suffer from it. “Any manufacturing capacity in the centre of a city has limited opportunities to develop (and not only for environmental reasons). Territorial and transport limitations are inevitable,” Mr Karpov reckons.
Alexander Goloviznin, Deputy CEO of Ust-Luga Company, shares his opinion. “Nowadays, practically all acting ports dream of becoming hubs, but a lot of conditions are needed for that, and a port can hardly reach this goal if it is inside a city,” he says. “It seems that if terminals are beyond the city’s boundary, cargo delivery time will increase, but this is not true. Other advantages are low traffic, less noise, and a smaller level of pollution.”
Meanwhile, as Mr Shimansky notes, the port is very important for the economy of St Petersburg. “Approximately 1 million tons of handled freight brings in RUB 140 million, contributing to the development of the city.”
Sanna Vaalgamaa, Chief Consultant at ECOBIO (Finland), pays attention to other possible negative consequences of the terminals’ transfer from the city centre. “Some cities are connected with ports from the outset. Due to the transfer of the latter, the image of ‘a port city’ will be lost forever. It can dramatically change the economic structure, and the environment, and the urban landscape, and impact tourist perception,” she thinks.
The example of San Francisco, from where the port was transferred to Oakland, proves her words. As a result, the latter is now a large business centre, and San Francisco is not high in the ranking of US cities.
How Much?
A balance should be struck in any scaled project. And this one is no exception. Some experts, for example, suggest keeping handling of containerised and general (so-called ‘clean’) cargoes in the Big Port of St Petersburg and passenger terminals, while hazardous freight should be handled outside the city. In fact, diversification of the stevedore business is going on in the northwest of Russia – there is a coal terminal in Ust-Luga, and there are oil bulk ports in Vysotsk and Primorsk.
The main questions which arise every time during the discussion about the necessity to transfer the port, are ‘to where?’ and “with whose money?” The answer to the first question is obvious. At least, taking into account the possible connecting of the city to the Leningrad region, it is discussed as the most suitable possibility. It is the port of Bronka on the southern shore of the Finnish Gulf. “Just look at the map, and you’ll understand there is no better place,” Mr Shukletsov notes. “Residential districts are far away, road accesses are developed, and one cannot imagine a modern container port without them.” Taking all factors into account – the ring road is not far away, there is an available sea channel of required depth, and an adjacent rail line – the carrying capacity of the ferry component is estimated at 260,000 units, that of the container one – at 1.9 million TEU per annum. In the words of Mr Shukletsov, tax receipts to the budget of St Petersburg will be at least RUB 1.7 billion (if the capacities are completely developed), and indirect receipts, provided by the GDP growth, will reach RUB 5.9 billion.
The answer to the second question – who can finance the transfer of the terminals – is not so obvious. “The transfer is a very expensive procedure, which will be economically unprofitable in most cases,” says Mrs Vaalgamaa.
Naturally, if the territory where the terminals are located can be used for construction of expensive houses, the city will only benefit from it. If the port’s revenue grows due to the increase in the cargo handling volume (which is possible only after the transfer), the metropolis is also interested in it. The expert states, however, that the decision on the transfer is usually based not on economic efficiency. In Europe, it is environmental safety issues. In Russia this aspect is not of top priority.
In 2006, the Committee for Transport and Transit Policy of St Petersburg analysed the efficiency of using the city land under the port terminals. The analysis showed then that its alternative usage will have a positive economic effect even if expenditure on revegetation is taken into account. “The value of the urban territory in question is defined by the tax receipts from one square metre,” Mr Karpov says. “With regard to the cost of land in the centre of St Petersburg, it would be more profitable to use the area of the First and the Second cargo districts of the port not for cargo handling, but for development of public and commercial real estate. Transport requires enormous territories and brings less money to the budget than other types of economy, and the situation becomes even worse because the land in the centre of the city is expensive.”
Foreign practice shows that the territory, which used to be occupied by a port, can be turned into something profitable. For example, in Baltimore, the territory was reconstructed for tourist needs. A similar situation took place in Glasgow and Lower Manhattan. The latter started to develop as a business district more actively after port capacities were transferred away from it. Any new town will develop around the port. To avoid possible mistakes, authorities should work on detailed planning of territories, Mr Shukletsov is sure.
“A single approach to the methods of cargo sea terminal construction, development and operation must be developed at State level. There must be only one person responsible for maximum efficiency of every square metre of the territory used for port activity,” says the expert. “And our water area is managed by federal authorities, the shore – by regional authorities, and the city, which has such a valuable asset as the port, is not eager to deal with its problems and create a single strategy for its development.” Theoretically, Mr Shukletsov believes, the interests of all parties – the city, the Transport Ministry, RZD, and the Federal Road Agency – must be taken into account. “The lack of this document causes the threat of a transport collapse and ecological problems,” he notes. “I believe that, for example, the St Petersburg Committee for Transport and Transit Policy could be in charge of the creation of the general scheme of the port development.”
In other words, to get an efficient document instead of another declaration, all interested parties, and first of all – the state, must participate in this work.
By Christina Alexandrova,
Marina Ermolenko
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[DETAIL_TEXT] => Status vs Ecology
The issue of the transfer of port capacities from the centre of St Petersburg has appeared on the agenda several times. Its urgency increases every year. The port’s throughput grows every year – its handling volume amounted to 59.98 million tons in 2011, a 3.3% increase as compared to the previous year. Consequently, the burden on the city’s infrastructure grows, because a large part of cargo is carried by road haulages. Trucks have almost taken over some residential districts of the city. For example, there is such a situation in the Kupchino district, where, according to Alexey Shukletsov, Executive Director of Phoenix LLC, trucks, destined for the harbor, park between apartment blocks. “Drivers practically live in their vehicles, blocking access, attracting criminals, which makes inhabitants worry,” he says.
This is only one of plenty of problems arising because of the joint existence of the port and the city. Environmental safety comes to the fore today. First of all, transportation of hazardous cargo creates a serious risk to the environment. A higher intensity of traffic in the streets negatively influences the environment and the quality of people’s life.
“Earlier, when ports were developing, little attention was paid to people,” says Alexander Shimansky, CEO of Moscow representative office of the Association of Commercial Sea Ports. “The situation has changed, and environmental issues and safety are regarded as of paramount importance during terminal construction.” Interesting as it is, stevedores do not recognise that such problem exists. According to Sea Port of St Petersburg OJSC, most cargoes are delivered to the port by railway and in summer – by river transport, consequently this activity does not impact on the city road traffic density. “In the first quarter of 2012, up to 90% of the company’s cargo flow was serviced with the help of railways. And the adjustment of railmen’s and portmen’s work shifts allowed avoiding wagon idling and even increasing the handling volume. Reconstruction of railway tracks in the First and the Second Cargo Districts of the port also helped,” the company said.
Nevertheless, back in 2010 Irog Rusu, who was the CEO of Rosmorport at that time, stated that terminals could and were to be transferred from St Petersburg. “Economists must calculate what the city will get if stevedoring companies leave this place, and are replaced with recreation areas and infrastructure for people’s leisure activities and tourist reception,” he noted.
At that time, both stevedoring companies and city authorities were against the idea, claiming that it may cause a loss of investments and deprive the city of its ‘sea capital’ status. Later, Viktor Olersky, Deputy Transport Minister of the RF, said that nobody was going to transfer the port till, at least, 2030. Meanwhile, the issue is being actively discussed in the transport community again.
Dreams Come True… but Outside the City
There are a lot of arguments for and against this decision. Let’s mention some of them. In the opinion of Andrey Karpov, Chairman of the Board of Directors of Dorn analytical bureau, the transfer of terminals from the centre of the city may help to solve a number of town-planning problems. “St Petersburg was planned to become a sea city, but in practice, there is a port and industrial zones between it and the sea. In the last few decades, St Petersburg has turned into a sandwich, where residential areas alternate with industrial zones,” he explains. The metropolis and stevedores suffer from it. “Any manufacturing capacity in the centre of a city has limited opportunities to develop (and not only for environmental reasons). Territorial and transport limitations are inevitable,” Mr Karpov reckons.
Alexander Goloviznin, Deputy CEO of Ust-Luga Company, shares his opinion. “Nowadays, practically all acting ports dream of becoming hubs, but a lot of conditions are needed for that, and a port can hardly reach this goal if it is inside a city,” he says. “It seems that if terminals are beyond the city’s boundary, cargo delivery time will increase, but this is not true. Other advantages are low traffic, less noise, and a smaller level of pollution.”
Meanwhile, as Mr Shimansky notes, the port is very important for the economy of St Petersburg. “Approximately 1 million tons of handled freight brings in RUB 140 million, contributing to the development of the city.”
Sanna Vaalgamaa, Chief Consultant at ECOBIO (Finland), pays attention to other possible negative consequences of the terminals’ transfer from the city centre. “Some cities are connected with ports from the outset. Due to the transfer of the latter, the image of ‘a port city’ will be lost forever. It can dramatically change the economic structure, and the environment, and the urban landscape, and impact tourist perception,” she thinks.
The example of San Francisco, from where the port was transferred to Oakland, proves her words. As a result, the latter is now a large business centre, and San Francisco is not high in the ranking of US cities.
How Much?
A balance should be struck in any scaled project. And this one is no exception. Some experts, for example, suggest keeping handling of containerised and general (so-called ‘clean’) cargoes in the Big Port of St Petersburg and passenger terminals, while hazardous freight should be handled outside the city. In fact, diversification of the stevedore business is going on in the northwest of Russia – there is a coal terminal in Ust-Luga, and there are oil bulk ports in Vysotsk and Primorsk.
The main questions which arise every time during the discussion about the necessity to transfer the port, are ‘to where?’ and “with whose money?” The answer to the first question is obvious. At least, taking into account the possible connecting of the city to the Leningrad region, it is discussed as the most suitable possibility. It is the port of Bronka on the southern shore of the Finnish Gulf. “Just look at the map, and you’ll understand there is no better place,” Mr Shukletsov notes. “Residential districts are far away, road accesses are developed, and one cannot imagine a modern container port without them.” Taking all factors into account – the ring road is not far away, there is an available sea channel of required depth, and an adjacent rail line – the carrying capacity of the ferry component is estimated at 260,000 units, that of the container one – at 1.9 million TEU per annum. In the words of Mr Shukletsov, tax receipts to the budget of St Petersburg will be at least RUB 1.7 billion (if the capacities are completely developed), and indirect receipts, provided by the GDP growth, will reach RUB 5.9 billion.
The answer to the second question – who can finance the transfer of the terminals – is not so obvious. “The transfer is a very expensive procedure, which will be economically unprofitable in most cases,” says Mrs Vaalgamaa.
Naturally, if the territory where the terminals are located can be used for construction of expensive houses, the city will only benefit from it. If the port’s revenue grows due to the increase in the cargo handling volume (which is possible only after the transfer), the metropolis is also interested in it. The expert states, however, that the decision on the transfer is usually based not on economic efficiency. In Europe, it is environmental safety issues. In Russia this aspect is not of top priority.
In 2006, the Committee for Transport and Transit Policy of St Petersburg analysed the efficiency of using the city land under the port terminals. The analysis showed then that its alternative usage will have a positive economic effect even if expenditure on revegetation is taken into account. “The value of the urban territory in question is defined by the tax receipts from one square metre,” Mr Karpov says. “With regard to the cost of land in the centre of St Petersburg, it would be more profitable to use the area of the First and the Second cargo districts of the port not for cargo handling, but for development of public and commercial real estate. Transport requires enormous territories and brings less money to the budget than other types of economy, and the situation becomes even worse because the land in the centre of the city is expensive.”
Foreign practice shows that the territory, which used to be occupied by a port, can be turned into something profitable. For example, in Baltimore, the territory was reconstructed for tourist needs. A similar situation took place in Glasgow and Lower Manhattan. The latter started to develop as a business district more actively after port capacities were transferred away from it. Any new town will develop around the port. To avoid possible mistakes, authorities should work on detailed planning of territories, Mr Shukletsov is sure.
“A single approach to the methods of cargo sea terminal construction, development and operation must be developed at State level. There must be only one person responsible for maximum efficiency of every square metre of the territory used for port activity,” says the expert. “And our water area is managed by federal authorities, the shore – by regional authorities, and the city, which has such a valuable asset as the port, is not eager to deal with its problems and create a single strategy for its development.” Theoretically, Mr Shukletsov believes, the interests of all parties – the city, the Transport Ministry, RZD, and the Federal Road Agency – must be taken into account. “The lack of this document causes the threat of a transport collapse and ecological problems,” he notes. “I believe that, for example, the St Petersburg Committee for Transport and Transit Policy could be in charge of the creation of the general scheme of the port development.”
In other words, to get an efficient document instead of another declaration, all interested parties, and first of all – the state, must participate in this work.
By Christina Alexandrova,
Marina Ermolenko
[~DETAIL_TEXT] => Status vs Ecology
The issue of the transfer of port capacities from the centre of St Petersburg has appeared on the agenda several times. Its urgency increases every year. The port’s throughput grows every year – its handling volume amounted to 59.98 million tons in 2011, a 3.3% increase as compared to the previous year. Consequently, the burden on the city’s infrastructure grows, because a large part of cargo is carried by road haulages. Trucks have almost taken over some residential districts of the city. For example, there is such a situation in the Kupchino district, where, according to Alexey Shukletsov, Executive Director of Phoenix LLC, trucks, destined for the harbor, park between apartment blocks. “Drivers practically live in their vehicles, blocking access, attracting criminals, which makes inhabitants worry,” he says.
This is only one of plenty of problems arising because of the joint existence of the port and the city. Environmental safety comes to the fore today. First of all, transportation of hazardous cargo creates a serious risk to the environment. A higher intensity of traffic in the streets negatively influences the environment and the quality of people’s life.
“Earlier, when ports were developing, little attention was paid to people,” says Alexander Shimansky, CEO of Moscow representative office of the Association of Commercial Sea Ports. “The situation has changed, and environmental issues and safety are regarded as of paramount importance during terminal construction.” Interesting as it is, stevedores do not recognise that such problem exists. According to Sea Port of St Petersburg OJSC, most cargoes are delivered to the port by railway and in summer – by river transport, consequently this activity does not impact on the city road traffic density. “In the first quarter of 2012, up to 90% of the company’s cargo flow was serviced with the help of railways. And the adjustment of railmen’s and portmen’s work shifts allowed avoiding wagon idling and even increasing the handling volume. Reconstruction of railway tracks in the First and the Second Cargo Districts of the port also helped,” the company said.
Nevertheless, back in 2010 Irog Rusu, who was the CEO of Rosmorport at that time, stated that terminals could and were to be transferred from St Petersburg. “Economists must calculate what the city will get if stevedoring companies leave this place, and are replaced with recreation areas and infrastructure for people’s leisure activities and tourist reception,” he noted.
At that time, both stevedoring companies and city authorities were against the idea, claiming that it may cause a loss of investments and deprive the city of its ‘sea capital’ status. Later, Viktor Olersky, Deputy Transport Minister of the RF, said that nobody was going to transfer the port till, at least, 2030. Meanwhile, the issue is being actively discussed in the transport community again.
Dreams Come True… but Outside the City
There are a lot of arguments for and against this decision. Let’s mention some of them. In the opinion of Andrey Karpov, Chairman of the Board of Directors of Dorn analytical bureau, the transfer of terminals from the centre of the city may help to solve a number of town-planning problems. “St Petersburg was planned to become a sea city, but in practice, there is a port and industrial zones between it and the sea. In the last few decades, St Petersburg has turned into a sandwich, where residential areas alternate with industrial zones,” he explains. The metropolis and stevedores suffer from it. “Any manufacturing capacity in the centre of a city has limited opportunities to develop (and not only for environmental reasons). Territorial and transport limitations are inevitable,” Mr Karpov reckons.
Alexander Goloviznin, Deputy CEO of Ust-Luga Company, shares his opinion. “Nowadays, practically all acting ports dream of becoming hubs, but a lot of conditions are needed for that, and a port can hardly reach this goal if it is inside a city,” he says. “It seems that if terminals are beyond the city’s boundary, cargo delivery time will increase, but this is not true. Other advantages are low traffic, less noise, and a smaller level of pollution.”
Meanwhile, as Mr Shimansky notes, the port is very important for the economy of St Petersburg. “Approximately 1 million tons of handled freight brings in RUB 140 million, contributing to the development of the city.”
Sanna Vaalgamaa, Chief Consultant at ECOBIO (Finland), pays attention to other possible negative consequences of the terminals’ transfer from the city centre. “Some cities are connected with ports from the outset. Due to the transfer of the latter, the image of ‘a port city’ will be lost forever. It can dramatically change the economic structure, and the environment, and the urban landscape, and impact tourist perception,” she thinks.
The example of San Francisco, from where the port was transferred to Oakland, proves her words. As a result, the latter is now a large business centre, and San Francisco is not high in the ranking of US cities.
How Much?
A balance should be struck in any scaled project. And this one is no exception. Some experts, for example, suggest keeping handling of containerised and general (so-called ‘clean’) cargoes in the Big Port of St Petersburg and passenger terminals, while hazardous freight should be handled outside the city. In fact, diversification of the stevedore business is going on in the northwest of Russia – there is a coal terminal in Ust-Luga, and there are oil bulk ports in Vysotsk and Primorsk.
The main questions which arise every time during the discussion about the necessity to transfer the port, are ‘to where?’ and “with whose money?” The answer to the first question is obvious. At least, taking into account the possible connecting of the city to the Leningrad region, it is discussed as the most suitable possibility. It is the port of Bronka on the southern shore of the Finnish Gulf. “Just look at the map, and you’ll understand there is no better place,” Mr Shukletsov notes. “Residential districts are far away, road accesses are developed, and one cannot imagine a modern container port without them.” Taking all factors into account – the ring road is not far away, there is an available sea channel of required depth, and an adjacent rail line – the carrying capacity of the ferry component is estimated at 260,000 units, that of the container one – at 1.9 million TEU per annum. In the words of Mr Shukletsov, tax receipts to the budget of St Petersburg will be at least RUB 1.7 billion (if the capacities are completely developed), and indirect receipts, provided by the GDP growth, will reach RUB 5.9 billion.
The answer to the second question – who can finance the transfer of the terminals – is not so obvious. “The transfer is a very expensive procedure, which will be economically unprofitable in most cases,” says Mrs Vaalgamaa.
Naturally, if the territory where the terminals are located can be used for construction of expensive houses, the city will only benefit from it. If the port’s revenue grows due to the increase in the cargo handling volume (which is possible only after the transfer), the metropolis is also interested in it. The expert states, however, that the decision on the transfer is usually based not on economic efficiency. In Europe, it is environmental safety issues. In Russia this aspect is not of top priority.
In 2006, the Committee for Transport and Transit Policy of St Petersburg analysed the efficiency of using the city land under the port terminals. The analysis showed then that its alternative usage will have a positive economic effect even if expenditure on revegetation is taken into account. “The value of the urban territory in question is defined by the tax receipts from one square metre,” Mr Karpov says. “With regard to the cost of land in the centre of St Petersburg, it would be more profitable to use the area of the First and the Second cargo districts of the port not for cargo handling, but for development of public and commercial real estate. Transport requires enormous territories and brings less money to the budget than other types of economy, and the situation becomes even worse because the land in the centre of the city is expensive.”
Foreign practice shows that the territory, which used to be occupied by a port, can be turned into something profitable. For example, in Baltimore, the territory was reconstructed for tourist needs. A similar situation took place in Glasgow and Lower Manhattan. The latter started to develop as a business district more actively after port capacities were transferred away from it. Any new town will develop around the port. To avoid possible mistakes, authorities should work on detailed planning of territories, Mr Shukletsov is sure.
“A single approach to the methods of cargo sea terminal construction, development and operation must be developed at State level. There must be only one person responsible for maximum efficiency of every square metre of the territory used for port activity,” says the expert. “And our water area is managed by federal authorities, the shore – by regional authorities, and the city, which has such a valuable asset as the port, is not eager to deal with its problems and create a single strategy for its development.” Theoretically, Mr Shukletsov believes, the interests of all parties – the city, the Transport Ministry, RZD, and the Federal Road Agency – must be taken into account. “The lack of this document causes the threat of a transport collapse and ecological problems,” he notes. “I believe that, for example, the St Petersburg Committee for Transport and Transit Policy could be in charge of the creation of the general scheme of the port development.”
In other words, to get an efficient document instead of another declaration, all interested parties, and first of all – the state, must participate in this work.
By Christina Alexandrova,
Marina Ermolenko
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[DETAIL_TEXT] => Increase in All Directions
According to the Coordination Council on Transsiberian Transportation (CCTT), 762,400 TEU was carried via the Transsib in the first six months of 2012, a 13.8% increase in comparison with the same period of the previous year. Container block train dispatches grew by 26.2% to 181,500 TEU. The pace of international transportation exceeded that of domestic transportation (see the graph). Transit showed the best dynamics with a 230.8% increase year-on-year to 53,500 TEU. According to specialists at TransContainer, the basic directions with positive dynamics were Zabaikalsk, the Far Eastern ports – the Moscow railway node; Dobra (Slovakia) – Zabaikalsk; Nakhodka-Vostochnaya – Ablyk (Uzbekistan); the Moscow railway node – Irkutsk, Khabarovsk; Lesosibirsk (the Krasnoyarsk region) – Novorossiysk; and Ust-Ilimsk – Vladivostok.
Specialists at Russkaya Troyka also noted the growth of transportation. “Transportation volume in almost all areas, where our company operates, increased. We’d like to mark our basic service – the Moscow – Vladivostok container train, which demonstrated outpacing growth rate,” says Nikolay Rezvov, CEO of Russkaya Troyka. “Every day we dispatch a train from Vladivostok to Moscow and back, i.e. there are 14 trains a week on the ring Vladivostok – Moscow – Vladivostok.”
Experts think that the increase in transit transportation explains the growth in the number of container trains. Specialists of the CCTT consider that “Baltika-Transit” (the Baltic states – Central and Middle Asia), “the Eastern Wind” (Germany - Russia), “Kazakh Vector” (Germany - Kazakhstan), “Mongol Vector” (Mongolia - Germany), Zabaikalsk – Chop, Brest – Zabaikalsk, Nakhodka-Vostochnaya – Brest, khodka – Moscow are the most successful. TransContainer highlighted such services as Nakhodka-Vostochnaya – Ablyk and Nakhodka-Vostochnaya – Sergeli (car components are carried on the line to GM-Uzbekistan plant in Tashkent, where cars are assembled). The latter was launched in early 2012, it has transported roughly 11,200 TEU. Two more projects have started their work this year – “Slavyansky Express” (Slavkov – Bryansk, Russkaya Troyka) and “Moskvich” (Germany – Russia, TransContainer).
In the words of Gennady Bessonov, General Secretary of the CCTT, the explanation for the increase in the number of container block trains is very simple: cargo transportation by them is more profitable. “To compare, a through tariff rate on a single 40-foot container transportation from Shanghai to Moscow via the Transsib is $7,200. It costs $6,400 if the box is carried by a block train. I.e. the average benefit is 10-15%,” says the expert.
The Transsib Picks Up Speed
The “Transsib in Seven Days” project continues to develop actively. It envisages that the route speed of container block trains moving from Far Eastern seaports to the EU border reaches 1,500 km per day. Market players believe that the increase in transportation by container block trains was caused by this very service. “Three or four years ago it took 14 days to carry a container from Vladivostok to Moscow. The travel time en route is now 10 days, so the progress is obvious,” emphasises Mr Rezvov. Special projects, which deliver vehicle sets and LCL cargo to definite clients, also contribute to the growth of the container flow via the Transsib. They include such trains as Nakhodka – Martsevo, Nakhodka – Shushary, Nakhodka – Cherkessk, and Chongqing – Cherkessk.
Despite the improved results of transportation via the Transsib, there will be difficulties faced by operators and consignors for many years. “The main problem is that our fast trains have to idle up to two or three days on the railway accesses to the Nakhodka port. It happens because the Far Eastern Railway is overloaded with trains,” specialists at Eurosib SPb – Transport Systems say. Also, market players note the existence of bureaucratic barriers on sea and land border crossings, imperfect technologies of transportation documents registration, underdeveloped infrastructure of the Transsib, the BAM and sea ports. Experts recognize that railway stations’ capacities should be extended, in particular, terminals for servicing container trains should be constructed. Until these issues are addressed, the prospects for further development of container transportation seem limited.®
By Elena Dmitrievskaya
[~DETAIL_TEXT] => Increase in All Directions
According to the Coordination Council on Transsiberian Transportation (CCTT), 762,400 TEU was carried via the Transsib in the first six months of 2012, a 13.8% increase in comparison with the same period of the previous year. Container block train dispatches grew by 26.2% to 181,500 TEU. The pace of international transportation exceeded that of domestic transportation (see the graph). Transit showed the best dynamics with a 230.8% increase year-on-year to 53,500 TEU. According to specialists at TransContainer, the basic directions with positive dynamics were Zabaikalsk, the Far Eastern ports – the Moscow railway node; Dobra (Slovakia) – Zabaikalsk; Nakhodka-Vostochnaya – Ablyk (Uzbekistan); the Moscow railway node – Irkutsk, Khabarovsk; Lesosibirsk (the Krasnoyarsk region) – Novorossiysk; and Ust-Ilimsk – Vladivostok.
Specialists at Russkaya Troyka also noted the growth of transportation. “Transportation volume in almost all areas, where our company operates, increased. We’d like to mark our basic service – the Moscow – Vladivostok container train, which demonstrated outpacing growth rate,” says Nikolay Rezvov, CEO of Russkaya Troyka. “Every day we dispatch a train from Vladivostok to Moscow and back, i.e. there are 14 trains a week on the ring Vladivostok – Moscow – Vladivostok.”
Experts think that the increase in transit transportation explains the growth in the number of container trains. Specialists of the CCTT consider that “Baltika-Transit” (the Baltic states – Central and Middle Asia), “the Eastern Wind” (Germany - Russia), “Kazakh Vector” (Germany - Kazakhstan), “Mongol Vector” (Mongolia - Germany), Zabaikalsk – Chop, Brest – Zabaikalsk, Nakhodka-Vostochnaya – Brest, khodka – Moscow are the most successful. TransContainer highlighted such services as Nakhodka-Vostochnaya – Ablyk and Nakhodka-Vostochnaya – Sergeli (car components are carried on the line to GM-Uzbekistan plant in Tashkent, where cars are assembled). The latter was launched in early 2012, it has transported roughly 11,200 TEU. Two more projects have started their work this year – “Slavyansky Express” (Slavkov – Bryansk, Russkaya Troyka) and “Moskvich” (Germany – Russia, TransContainer).
In the words of Gennady Bessonov, General Secretary of the CCTT, the explanation for the increase in the number of container block trains is very simple: cargo transportation by them is more profitable. “To compare, a through tariff rate on a single 40-foot container transportation from Shanghai to Moscow via the Transsib is $7,200. It costs $6,400 if the box is carried by a block train. I.e. the average benefit is 10-15%,” says the expert.
The Transsib Picks Up Speed
The “Transsib in Seven Days” project continues to develop actively. It envisages that the route speed of container block trains moving from Far Eastern seaports to the EU border reaches 1,500 km per day. Market players believe that the increase in transportation by container block trains was caused by this very service. “Three or four years ago it took 14 days to carry a container from Vladivostok to Moscow. The travel time en route is now 10 days, so the progress is obvious,” emphasises Mr Rezvov. Special projects, which deliver vehicle sets and LCL cargo to definite clients, also contribute to the growth of the container flow via the Transsib. They include such trains as Nakhodka – Martsevo, Nakhodka – Shushary, Nakhodka – Cherkessk, and Chongqing – Cherkessk.
Despite the improved results of transportation via the Transsib, there will be difficulties faced by operators and consignors for many years. “The main problem is that our fast trains have to idle up to two or three days on the railway accesses to the Nakhodka port. It happens because the Far Eastern Railway is overloaded with trains,” specialists at Eurosib SPb – Transport Systems say. Also, market players note the existence of bureaucratic barriers on sea and land border crossings, imperfect technologies of transportation documents registration, underdeveloped infrastructure of the Transsib, the BAM and sea ports. Experts recognize that railway stations’ capacities should be extended, in particular, terminals for servicing container trains should be constructed. Until these issues are addressed, the prospects for further development of container transportation seem limited.®
By Elena Dmitrievskaya
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[DETAIL_TEXT] => Increase in All Directions
According to the Coordination Council on Transsiberian Transportation (CCTT), 762,400 TEU was carried via the Transsib in the first six months of 2012, a 13.8% increase in comparison with the same period of the previous year. Container block train dispatches grew by 26.2% to 181,500 TEU. The pace of international transportation exceeded that of domestic transportation (see the graph). Transit showed the best dynamics with a 230.8% increase year-on-year to 53,500 TEU. According to specialists at TransContainer, the basic directions with positive dynamics were Zabaikalsk, the Far Eastern ports – the Moscow railway node; Dobra (Slovakia) – Zabaikalsk; Nakhodka-Vostochnaya – Ablyk (Uzbekistan); the Moscow railway node – Irkutsk, Khabarovsk; Lesosibirsk (the Krasnoyarsk region) – Novorossiysk; and Ust-Ilimsk – Vladivostok.
Specialists at Russkaya Troyka also noted the growth of transportation. “Transportation volume in almost all areas, where our company operates, increased. We’d like to mark our basic service – the Moscow – Vladivostok container train, which demonstrated outpacing growth rate,” says Nikolay Rezvov, CEO of Russkaya Troyka. “Every day we dispatch a train from Vladivostok to Moscow and back, i.e. there are 14 trains a week on the ring Vladivostok – Moscow – Vladivostok.”
Experts think that the increase in transit transportation explains the growth in the number of container trains. Specialists of the CCTT consider that “Baltika-Transit” (the Baltic states – Central and Middle Asia), “the Eastern Wind” (Germany - Russia), “Kazakh Vector” (Germany - Kazakhstan), “Mongol Vector” (Mongolia - Germany), Zabaikalsk – Chop, Brest – Zabaikalsk, Nakhodka-Vostochnaya – Brest, khodka – Moscow are the most successful. TransContainer highlighted such services as Nakhodka-Vostochnaya – Ablyk and Nakhodka-Vostochnaya – Sergeli (car components are carried on the line to GM-Uzbekistan plant in Tashkent, where cars are assembled). The latter was launched in early 2012, it has transported roughly 11,200 TEU. Two more projects have started their work this year – “Slavyansky Express” (Slavkov – Bryansk, Russkaya Troyka) and “Moskvich” (Germany – Russia, TransContainer).
In the words of Gennady Bessonov, General Secretary of the CCTT, the explanation for the increase in the number of container block trains is very simple: cargo transportation by them is more profitable. “To compare, a through tariff rate on a single 40-foot container transportation from Shanghai to Moscow via the Transsib is $7,200. It costs $6,400 if the box is carried by a block train. I.e. the average benefit is 10-15%,” says the expert.
The Transsib Picks Up Speed
The “Transsib in Seven Days” project continues to develop actively. It envisages that the route speed of container block trains moving from Far Eastern seaports to the EU border reaches 1,500 km per day. Market players believe that the increase in transportation by container block trains was caused by this very service. “Three or four years ago it took 14 days to carry a container from Vladivostok to Moscow. The travel time en route is now 10 days, so the progress is obvious,” emphasises Mr Rezvov. Special projects, which deliver vehicle sets and LCL cargo to definite clients, also contribute to the growth of the container flow via the Transsib. They include such trains as Nakhodka – Martsevo, Nakhodka – Shushary, Nakhodka – Cherkessk, and Chongqing – Cherkessk.
Despite the improved results of transportation via the Transsib, there will be difficulties faced by operators and consignors for many years. “The main problem is that our fast trains have to idle up to two or three days on the railway accesses to the Nakhodka port. It happens because the Far Eastern Railway is overloaded with trains,” specialists at Eurosib SPb – Transport Systems say. Also, market players note the existence of bureaucratic barriers on sea and land border crossings, imperfect technologies of transportation documents registration, underdeveloped infrastructure of the Transsib, the BAM and sea ports. Experts recognize that railway stations’ capacities should be extended, in particular, terminals for servicing container trains should be constructed. Until these issues are addressed, the prospects for further development of container transportation seem limited.®
By Elena Dmitrievskaya
[~DETAIL_TEXT] => Increase in All Directions
According to the Coordination Council on Transsiberian Transportation (CCTT), 762,400 TEU was carried via the Transsib in the first six months of 2012, a 13.8% increase in comparison with the same period of the previous year. Container block train dispatches grew by 26.2% to 181,500 TEU. The pace of international transportation exceeded that of domestic transportation (see the graph). Transit showed the best dynamics with a 230.8% increase year-on-year to 53,500 TEU. According to specialists at TransContainer, the basic directions with positive dynamics were Zabaikalsk, the Far Eastern ports – the Moscow railway node; Dobra (Slovakia) – Zabaikalsk; Nakhodka-Vostochnaya – Ablyk (Uzbekistan); the Moscow railway node – Irkutsk, Khabarovsk; Lesosibirsk (the Krasnoyarsk region) – Novorossiysk; and Ust-Ilimsk – Vladivostok.
Specialists at Russkaya Troyka also noted the growth of transportation. “Transportation volume in almost all areas, where our company operates, increased. We’d like to mark our basic service – the Moscow – Vladivostok container train, which demonstrated outpacing growth rate,” says Nikolay Rezvov, CEO of Russkaya Troyka. “Every day we dispatch a train from Vladivostok to Moscow and back, i.e. there are 14 trains a week on the ring Vladivostok – Moscow – Vladivostok.”
Experts think that the increase in transit transportation explains the growth in the number of container trains. Specialists of the CCTT consider that “Baltika-Transit” (the Baltic states – Central and Middle Asia), “the Eastern Wind” (Germany - Russia), “Kazakh Vector” (Germany - Kazakhstan), “Mongol Vector” (Mongolia - Germany), Zabaikalsk – Chop, Brest – Zabaikalsk, Nakhodka-Vostochnaya – Brest, khodka – Moscow are the most successful. TransContainer highlighted such services as Nakhodka-Vostochnaya – Ablyk and Nakhodka-Vostochnaya – Sergeli (car components are carried on the line to GM-Uzbekistan plant in Tashkent, where cars are assembled). The latter was launched in early 2012, it has transported roughly 11,200 TEU. Two more projects have started their work this year – “Slavyansky Express” (Slavkov – Bryansk, Russkaya Troyka) and “Moskvich” (Germany – Russia, TransContainer).
In the words of Gennady Bessonov, General Secretary of the CCTT, the explanation for the increase in the number of container block trains is very simple: cargo transportation by them is more profitable. “To compare, a through tariff rate on a single 40-foot container transportation from Shanghai to Moscow via the Transsib is $7,200. It costs $6,400 if the box is carried by a block train. I.e. the average benefit is 10-15%,” says the expert.
The Transsib Picks Up Speed
The “Transsib in Seven Days” project continues to develop actively. It envisages that the route speed of container block trains moving from Far Eastern seaports to the EU border reaches 1,500 km per day. Market players believe that the increase in transportation by container block trains was caused by this very service. “Three or four years ago it took 14 days to carry a container from Vladivostok to Moscow. The travel time en route is now 10 days, so the progress is obvious,” emphasises Mr Rezvov. Special projects, which deliver vehicle sets and LCL cargo to definite clients, also contribute to the growth of the container flow via the Transsib. They include such trains as Nakhodka – Martsevo, Nakhodka – Shushary, Nakhodka – Cherkessk, and Chongqing – Cherkessk.
Despite the improved results of transportation via the Transsib, there will be difficulties faced by operators and consignors for many years. “The main problem is that our fast trains have to idle up to two or three days on the railway accesses to the Nakhodka port. It happens because the Far Eastern Railway is overloaded with trains,” specialists at Eurosib SPb – Transport Systems say. Also, market players note the existence of bureaucratic barriers on sea and land border crossings, imperfect technologies of transportation documents registration, underdeveloped infrastructure of the Transsib, the BAM and sea ports. Experts recognize that railway stations’ capacities should be extended, in particular, terminals for servicing container trains should be constructed. Until these issues are addressed, the prospects for further development of container transportation seem limited.®
By Elena Dmitrievskaya
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The results of loading work in the first half of 2012 are considered as positive, especially with the background of pessimistic predictions forecasting stagnation or even a serious decrease. Simultaneously, there are a number of alarming trends, and the sector’s further functioning will depend on reversing them.Array
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[DETAIL_TEXT] => Production Volume Grows, Transportation Falls
628.8 million tons of cargo was carried on the Russian railway network in the first six months of the current year, a 3.5% increase on the same period of 2011. To a significant degree, the growth became possible due to the increase in low-yielding cargo transportation (348 million tons or +7% year-on-year). The dynamics of high-yielding freight was more moderate (205 million tons or +3% year-on-year). 70 million tons of mid-yielding cargo made up 98% of the figures reached in January-June 2011. The statistics of this tariff class cargo transportation would be even more depressing, if there hadn’t been a 57% increase in grain transportation (9 million tons). Press cake was the other cargo with positive dynamics in this tariff class (1.4 million tons up by +38%).
Sugar production reduced by more than 50% (according to the Federal Statistics Service), but its dispatches on the network fell by only 30%. There is a similar situation with mineral fertilisers. Experts’ estimations of the metal scrap sector are also contradictory: instability in the domestic and external markets makes producers change their plans.
Transportation of timber on RZD’s network reduces (by 10% year-on-year) disproportionately to logging. According to the Ministry of Industry and Trade, the volume of timber production in the first half of 2012 made up 98% of the last year’s H1 volume. For some products, such as plywood, MDF, etc there was even some increase (from 3 to 6% as compared with January-June 2011). The railway has not always been the best mode for transportation of some types of processed timber, but its popularity for logs transportation is traditionally undoubted. Last year’s decline in this sector could be explained by the widespread instability on the network. Timbermen were demanding railcars during the whole year. There are no alarming signals this year, but the figures do not improve.
Naturally, there have been problems in the sector for several years already, and the worldwide market situation is not promising. Nevertheless, according to the Federal Statistics Service, the logging volume in the first half of this year made up 98.1% as percentage of H1 2011 figures. Therefore, according to experts’ estimation, at least 500,000 tons of timber have been redirected from railways to other transport modes (mainly to road haulages). And the explanation is quite simple. Amid the decline in the profitability of timber business, any increase in expenditure, defining the final cost of products, is very painful for market players. “The European market demonstrates a slightly negative dynamic, which causes a 5-15% decline in the level of prices depending on the type of products,” explain specialists at Vologda Timbermen company. “At the beginning of the year, some owners increased prices for transportation in special rolling stock by 15-20%, which makes railway transportation of some products unprofitable.”
There is a similar situation in eastern regions, where the market cooldown in Asia and the Pacific Region countries coincides with price corrections in the rolling stock supply sector. As a result, timbermen use vehicles more and more actively – previously their route ended at the approach lines of the nearest railway station, but now they build roads directly to the gates of timber processing plants. The problem is more significant than special rolling stock owners’ growing appetite. Harmony between timbermen and railways has not been found yet, and if the trend of re-orientation continues, there may be an unexpected minor solution for the problem of special rolling stock.
There Is A Problem Attracting High-Yielding Cargo …
However strange it is, similar trends are observed in the high-yielding cargo transportation sector. If the decline in mid-yielding cargo transportation sector may be explained by operators’ low attraction to this type of dispatch, transportation of the third tariff class cargoes is traditionally the prize, competition for which is especially tough. If we do not take into consideration transportation of foodstuffs (+19%), livestock (+16%), cars (+6%), and containers (+5%), high-yielding cargoes either remain at last year’s level (e.g. oil and petrochemicals (+3%) and metals (+1%), or reduce. Oil transportation is a rather specific business with pipelines as an alternative and an active state policy applied to production volume and import regulation. As for other cargoes, one has to acknowledge the existence of serious problems servicing potential clients.
One of the brightest examples is the iron and steel industry. Amid almost zero increase in railway transportation, steel production in Russia grew by 4.7% in January-June 2012 to 35.7 million tons, rolled ferrous metal products – by 6.3% to 31.3 million tons.
The biggest increase in consumption was registered in the construction sector, its main factors were from a comparatively low base because of the demand deferred during the crisis, and scaled infrastructure projects financed from the budget. This year, construction will remain the main driver of increased internal demand, because the projects for the Olympics-2014 in Sochi and the FIFA World Cup 2018 are being carried out.
The consumption of flat steel will increase moderately in 2012: on the one hand, car- and similar industries, – the machine building sector’s customers work is stable enough, on the other hand, the pipe industry has reduced its need for this cargo because of the local crisis in it.
“It is impossible to state for sure that the railway lost out on 3-5 million tons of this product, or that it left for other transport modes,” believes Alexander Saenko, analyst at TB-Trust agency. “One should take into account the market situation, because of which metallurgists could have stored their products in warehouses waiting for a better price. Nevertheless, there is such a trend. First of all, it concerns flat products and some other types of cargo, railway transportation of which becomes too expensive and requires too much time and effort.”
The transportation process in this sector is also characterised by the necessity to solve difficult problems, which negatively influences the total volume of railway transportation. Even the increase in export transportation (+4.7%), which is traditionally provided by the railways, failed to compensate for the decline in domestic transportation.
… And No Problems Attracting Low-Yielding Cargoes
The results of the first tariff class cargo transportation seem to be more successful – there was an increase in transportation of most types of the freight and decline in those of smaller importance. Salt (-15%) and firebricks (-4%) together made less than 0.6% of the total volume dispatched on the network. Experts think that the reduction in transportation of iron and manganese ores (-0.9%) was caused by the decline in export supplies, and point at the increase in square billet export, which is the raw material for deeper processing and replaces ore in the production process.
The above mentioned trends, however, are also observed in the transportation of low-yielding freight. Transportation of coal increased by 3.7%, but according to the RF Ministry of Energy, coal extraction grew by 5.3% in January-June 2012 to 167.7 million tons. Exports of Russian coal grew by 19.7% year-on-year to 61.4 million tons. This difference (17 million tons) between output and transportation volume is not significant, it is practically equal to the usual stock balance in warehouses. At the same time, last year’s experience shows that high levels of this figure can turn into a problem sooner or later. Last year, the crisis took place in September, when needs for daily loading in the Kemerovo region suddenly increased from 5,000-5,500 to 7,000-7,500 railcars, and the consequences of the attempts to fulfill the need had a negative impact on the entire network. That’s why the increasing difference between output and transportation volume is traditionally an alarming factor.
The growth of cement loading volumes (+6%) is also rather moderate in comparison with the increase in its production (+17%). Cargo re-direction to motorways and rivers is observed in the sector for the second year running, obviously, an efficient solution to the problem has not been found yet. “In 2011, the infrastructure worked worse than expected, and producers started to increase the share of dispatches by road transport to fulfill their contractual obligations,” notes Pavel Ivankin, CEO of Spetswagontrans. “The infrastructure is working even worse this season, therefore, the trend of expanding the share of dispatches by road haulages will grow,” he says. According to Mr Ivankin, the rolling stock shortage becomes even worse because of the decline in wagon turnover on the network. Cases of wagons idling in laid aside trains (freight trains without locomotives detained on their way to the destination point for commercial, technical, technological or other reasons) have become more frequent. Block trains idle waiting for locomotive replacements can now be an unprecedented 27 hours. Rolling stock is moved on the routes not coinciding with the shortest distances or the train set plan.
Crushed stone transportation is the only bright point in the picture. It makes up the lion’s share of construction materials carried by railways (+19%). Stable growth, colossal potential for dispatches expansion, and the lack of economically efficient ways to re-direct the cargo to other transport modes make railmen sure that they shouldn’t worry about this freight. On closer examination, there are several tricky questions, especially in the issue of the cost of transport relative to the cost of the product. Let’s think that these questions are not acute as long as there is the park of the rented private railcar fleet.
It is difficult to define the exact reasons for, and consequences of, the current situation on RZD’s network. Obviously, there are some positive dynamics, and transportation must become more attractive for clients. The analysis of statistics, however, shows that it is not enough for consignors. One can speak about the flaws of regulation or about gaps in the legislation, but it would be logical to suppose that the main question is that a definite service provider cannot interest a definite consumer. Perhaps, market players should start to search for new solutions to keep the balance of interests on a more acceptable level. Otherwise, by the time the railway system is organised properly, there will be few people wishing to use its advantages.
By Dmitry Khantsevich
[~DETAIL_TEXT] => Production Volume Grows, Transportation Falls
628.8 million tons of cargo was carried on the Russian railway network in the first six months of the current year, a 3.5% increase on the same period of 2011. To a significant degree, the growth became possible due to the increase in low-yielding cargo transportation (348 million tons or +7% year-on-year). The dynamics of high-yielding freight was more moderate (205 million tons or +3% year-on-year). 70 million tons of mid-yielding cargo made up 98% of the figures reached in January-June 2011. The statistics of this tariff class cargo transportation would be even more depressing, if there hadn’t been a 57% increase in grain transportation (9 million tons). Press cake was the other cargo with positive dynamics in this tariff class (1.4 million tons up by +38%).
Sugar production reduced by more than 50% (according to the Federal Statistics Service), but its dispatches on the network fell by only 30%. There is a similar situation with mineral fertilisers. Experts’ estimations of the metal scrap sector are also contradictory: instability in the domestic and external markets makes producers change their plans.
Transportation of timber on RZD’s network reduces (by 10% year-on-year) disproportionately to logging. According to the Ministry of Industry and Trade, the volume of timber production in the first half of 2012 made up 98% of the last year’s H1 volume. For some products, such as plywood, MDF, etc there was even some increase (from 3 to 6% as compared with January-June 2011). The railway has not always been the best mode for transportation of some types of processed timber, but its popularity for logs transportation is traditionally undoubted. Last year’s decline in this sector could be explained by the widespread instability on the network. Timbermen were demanding railcars during the whole year. There are no alarming signals this year, but the figures do not improve.
Naturally, there have been problems in the sector for several years already, and the worldwide market situation is not promising. Nevertheless, according to the Federal Statistics Service, the logging volume in the first half of this year made up 98.1% as percentage of H1 2011 figures. Therefore, according to experts’ estimation, at least 500,000 tons of timber have been redirected from railways to other transport modes (mainly to road haulages). And the explanation is quite simple. Amid the decline in the profitability of timber business, any increase in expenditure, defining the final cost of products, is very painful for market players. “The European market demonstrates a slightly negative dynamic, which causes a 5-15% decline in the level of prices depending on the type of products,” explain specialists at Vologda Timbermen company. “At the beginning of the year, some owners increased prices for transportation in special rolling stock by 15-20%, which makes railway transportation of some products unprofitable.”
There is a similar situation in eastern regions, where the market cooldown in Asia and the Pacific Region countries coincides with price corrections in the rolling stock supply sector. As a result, timbermen use vehicles more and more actively – previously their route ended at the approach lines of the nearest railway station, but now they build roads directly to the gates of timber processing plants. The problem is more significant than special rolling stock owners’ growing appetite. Harmony between timbermen and railways has not been found yet, and if the trend of re-orientation continues, there may be an unexpected minor solution for the problem of special rolling stock.
There Is A Problem Attracting High-Yielding Cargo …
However strange it is, similar trends are observed in the high-yielding cargo transportation sector. If the decline in mid-yielding cargo transportation sector may be explained by operators’ low attraction to this type of dispatch, transportation of the third tariff class cargoes is traditionally the prize, competition for which is especially tough. If we do not take into consideration transportation of foodstuffs (+19%), livestock (+16%), cars (+6%), and containers (+5%), high-yielding cargoes either remain at last year’s level (e.g. oil and petrochemicals (+3%) and metals (+1%), or reduce. Oil transportation is a rather specific business with pipelines as an alternative and an active state policy applied to production volume and import regulation. As for other cargoes, one has to acknowledge the existence of serious problems servicing potential clients.
One of the brightest examples is the iron and steel industry. Amid almost zero increase in railway transportation, steel production in Russia grew by 4.7% in January-June 2012 to 35.7 million tons, rolled ferrous metal products – by 6.3% to 31.3 million tons.
The biggest increase in consumption was registered in the construction sector, its main factors were from a comparatively low base because of the demand deferred during the crisis, and scaled infrastructure projects financed from the budget. This year, construction will remain the main driver of increased internal demand, because the projects for the Olympics-2014 in Sochi and the FIFA World Cup 2018 are being carried out.
The consumption of flat steel will increase moderately in 2012: on the one hand, car- and similar industries, – the machine building sector’s customers work is stable enough, on the other hand, the pipe industry has reduced its need for this cargo because of the local crisis in it.
“It is impossible to state for sure that the railway lost out on 3-5 million tons of this product, or that it left for other transport modes,” believes Alexander Saenko, analyst at TB-Trust agency. “One should take into account the market situation, because of which metallurgists could have stored their products in warehouses waiting for a better price. Nevertheless, there is such a trend. First of all, it concerns flat products and some other types of cargo, railway transportation of which becomes too expensive and requires too much time and effort.”
The transportation process in this sector is also characterised by the necessity to solve difficult problems, which negatively influences the total volume of railway transportation. Even the increase in export transportation (+4.7%), which is traditionally provided by the railways, failed to compensate for the decline in domestic transportation.
… And No Problems Attracting Low-Yielding Cargoes
The results of the first tariff class cargo transportation seem to be more successful – there was an increase in transportation of most types of the freight and decline in those of smaller importance. Salt (-15%) and firebricks (-4%) together made less than 0.6% of the total volume dispatched on the network. Experts think that the reduction in transportation of iron and manganese ores (-0.9%) was caused by the decline in export supplies, and point at the increase in square billet export, which is the raw material for deeper processing and replaces ore in the production process.
The above mentioned trends, however, are also observed in the transportation of low-yielding freight. Transportation of coal increased by 3.7%, but according to the RF Ministry of Energy, coal extraction grew by 5.3% in January-June 2012 to 167.7 million tons. Exports of Russian coal grew by 19.7% year-on-year to 61.4 million tons. This difference (17 million tons) between output and transportation volume is not significant, it is practically equal to the usual stock balance in warehouses. At the same time, last year’s experience shows that high levels of this figure can turn into a problem sooner or later. Last year, the crisis took place in September, when needs for daily loading in the Kemerovo region suddenly increased from 5,000-5,500 to 7,000-7,500 railcars, and the consequences of the attempts to fulfill the need had a negative impact on the entire network. That’s why the increasing difference between output and transportation volume is traditionally an alarming factor.
The growth of cement loading volumes (+6%) is also rather moderate in comparison with the increase in its production (+17%). Cargo re-direction to motorways and rivers is observed in the sector for the second year running, obviously, an efficient solution to the problem has not been found yet. “In 2011, the infrastructure worked worse than expected, and producers started to increase the share of dispatches by road transport to fulfill their contractual obligations,” notes Pavel Ivankin, CEO of Spetswagontrans. “The infrastructure is working even worse this season, therefore, the trend of expanding the share of dispatches by road haulages will grow,” he says. According to Mr Ivankin, the rolling stock shortage becomes even worse because of the decline in wagon turnover on the network. Cases of wagons idling in laid aside trains (freight trains without locomotives detained on their way to the destination point for commercial, technical, technological or other reasons) have become more frequent. Block trains idle waiting for locomotive replacements can now be an unprecedented 27 hours. Rolling stock is moved on the routes not coinciding with the shortest distances or the train set plan.
Crushed stone transportation is the only bright point in the picture. It makes up the lion’s share of construction materials carried by railways (+19%). Stable growth, colossal potential for dispatches expansion, and the lack of economically efficient ways to re-direct the cargo to other transport modes make railmen sure that they shouldn’t worry about this freight. On closer examination, there are several tricky questions, especially in the issue of the cost of transport relative to the cost of the product. Let’s think that these questions are not acute as long as there is the park of the rented private railcar fleet.
It is difficult to define the exact reasons for, and consequences of, the current situation on RZD’s network. Obviously, there are some positive dynamics, and transportation must become more attractive for clients. The analysis of statistics, however, shows that it is not enough for consignors. One can speak about the flaws of regulation or about gaps in the legislation, but it would be logical to suppose that the main question is that a definite service provider cannot interest a definite consumer. Perhaps, market players should start to search for new solutions to keep the balance of interests on a more acceptable level. Otherwise, by the time the railway system is organised properly, there will be few people wishing to use its advantages.
By Dmitry Khantsevich
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[DETAIL_TEXT] => Production Volume Grows, Transportation Falls
628.8 million tons of cargo was carried on the Russian railway network in the first six months of the current year, a 3.5% increase on the same period of 2011. To a significant degree, the growth became possible due to the increase in low-yielding cargo transportation (348 million tons or +7% year-on-year). The dynamics of high-yielding freight was more moderate (205 million tons or +3% year-on-year). 70 million tons of mid-yielding cargo made up 98% of the figures reached in January-June 2011. The statistics of this tariff class cargo transportation would be even more depressing, if there hadn’t been a 57% increase in grain transportation (9 million tons). Press cake was the other cargo with positive dynamics in this tariff class (1.4 million tons up by +38%).
Sugar production reduced by more than 50% (according to the Federal Statistics Service), but its dispatches on the network fell by only 30%. There is a similar situation with mineral fertilisers. Experts’ estimations of the metal scrap sector are also contradictory: instability in the domestic and external markets makes producers change their plans.
Transportation of timber on RZD’s network reduces (by 10% year-on-year) disproportionately to logging. According to the Ministry of Industry and Trade, the volume of timber production in the first half of 2012 made up 98% of the last year’s H1 volume. For some products, such as plywood, MDF, etc there was even some increase (from 3 to 6% as compared with January-June 2011). The railway has not always been the best mode for transportation of some types of processed timber, but its popularity for logs transportation is traditionally undoubted. Last year’s decline in this sector could be explained by the widespread instability on the network. Timbermen were demanding railcars during the whole year. There are no alarming signals this year, but the figures do not improve.
Naturally, there have been problems in the sector for several years already, and the worldwide market situation is not promising. Nevertheless, according to the Federal Statistics Service, the logging volume in the first half of this year made up 98.1% as percentage of H1 2011 figures. Therefore, according to experts’ estimation, at least 500,000 tons of timber have been redirected from railways to other transport modes (mainly to road haulages). And the explanation is quite simple. Amid the decline in the profitability of timber business, any increase in expenditure, defining the final cost of products, is very painful for market players. “The European market demonstrates a slightly negative dynamic, which causes a 5-15% decline in the level of prices depending on the type of products,” explain specialists at Vologda Timbermen company. “At the beginning of the year, some owners increased prices for transportation in special rolling stock by 15-20%, which makes railway transportation of some products unprofitable.”
There is a similar situation in eastern regions, where the market cooldown in Asia and the Pacific Region countries coincides with price corrections in the rolling stock supply sector. As a result, timbermen use vehicles more and more actively – previously their route ended at the approach lines of the nearest railway station, but now they build roads directly to the gates of timber processing plants. The problem is more significant than special rolling stock owners’ growing appetite. Harmony between timbermen and railways has not been found yet, and if the trend of re-orientation continues, there may be an unexpected minor solution for the problem of special rolling stock.
There Is A Problem Attracting High-Yielding Cargo …
However strange it is, similar trends are observed in the high-yielding cargo transportation sector. If the decline in mid-yielding cargo transportation sector may be explained by operators’ low attraction to this type of dispatch, transportation of the third tariff class cargoes is traditionally the prize, competition for which is especially tough. If we do not take into consideration transportation of foodstuffs (+19%), livestock (+16%), cars (+6%), and containers (+5%), high-yielding cargoes either remain at last year’s level (e.g. oil and petrochemicals (+3%) and metals (+1%), or reduce. Oil transportation is a rather specific business with pipelines as an alternative and an active state policy applied to production volume and import regulation. As for other cargoes, one has to acknowledge the existence of serious problems servicing potential clients.
One of the brightest examples is the iron and steel industry. Amid almost zero increase in railway transportation, steel production in Russia grew by 4.7% in January-June 2012 to 35.7 million tons, rolled ferrous metal products – by 6.3% to 31.3 million tons.
The biggest increase in consumption was registered in the construction sector, its main factors were from a comparatively low base because of the demand deferred during the crisis, and scaled infrastructure projects financed from the budget. This year, construction will remain the main driver of increased internal demand, because the projects for the Olympics-2014 in Sochi and the FIFA World Cup 2018 are being carried out.
The consumption of flat steel will increase moderately in 2012: on the one hand, car- and similar industries, – the machine building sector’s customers work is stable enough, on the other hand, the pipe industry has reduced its need for this cargo because of the local crisis in it.
“It is impossible to state for sure that the railway lost out on 3-5 million tons of this product, or that it left for other transport modes,” believes Alexander Saenko, analyst at TB-Trust agency. “One should take into account the market situation, because of which metallurgists could have stored their products in warehouses waiting for a better price. Nevertheless, there is such a trend. First of all, it concerns flat products and some other types of cargo, railway transportation of which becomes too expensive and requires too much time and effort.”
The transportation process in this sector is also characterised by the necessity to solve difficult problems, which negatively influences the total volume of railway transportation. Even the increase in export transportation (+4.7%), which is traditionally provided by the railways, failed to compensate for the decline in domestic transportation.
… And No Problems Attracting Low-Yielding Cargoes
The results of the first tariff class cargo transportation seem to be more successful – there was an increase in transportation of most types of the freight and decline in those of smaller importance. Salt (-15%) and firebricks (-4%) together made less than 0.6% of the total volume dispatched on the network. Experts think that the reduction in transportation of iron and manganese ores (-0.9%) was caused by the decline in export supplies, and point at the increase in square billet export, which is the raw material for deeper processing and replaces ore in the production process.
The above mentioned trends, however, are also observed in the transportation of low-yielding freight. Transportation of coal increased by 3.7%, but according to the RF Ministry of Energy, coal extraction grew by 5.3% in January-June 2012 to 167.7 million tons. Exports of Russian coal grew by 19.7% year-on-year to 61.4 million tons. This difference (17 million tons) between output and transportation volume is not significant, it is practically equal to the usual stock balance in warehouses. At the same time, last year’s experience shows that high levels of this figure can turn into a problem sooner or later. Last year, the crisis took place in September, when needs for daily loading in the Kemerovo region suddenly increased from 5,000-5,500 to 7,000-7,500 railcars, and the consequences of the attempts to fulfill the need had a negative impact on the entire network. That’s why the increasing difference between output and transportation volume is traditionally an alarming factor.
The growth of cement loading volumes (+6%) is also rather moderate in comparison with the increase in its production (+17%). Cargo re-direction to motorways and rivers is observed in the sector for the second year running, obviously, an efficient solution to the problem has not been found yet. “In 2011, the infrastructure worked worse than expected, and producers started to increase the share of dispatches by road transport to fulfill their contractual obligations,” notes Pavel Ivankin, CEO of Spetswagontrans. “The infrastructure is working even worse this season, therefore, the trend of expanding the share of dispatches by road haulages will grow,” he says. According to Mr Ivankin, the rolling stock shortage becomes even worse because of the decline in wagon turnover on the network. Cases of wagons idling in laid aside trains (freight trains without locomotives detained on their way to the destination point for commercial, technical, technological or other reasons) have become more frequent. Block trains idle waiting for locomotive replacements can now be an unprecedented 27 hours. Rolling stock is moved on the routes not coinciding with the shortest distances or the train set plan.
Crushed stone transportation is the only bright point in the picture. It makes up the lion’s share of construction materials carried by railways (+19%). Stable growth, colossal potential for dispatches expansion, and the lack of economically efficient ways to re-direct the cargo to other transport modes make railmen sure that they shouldn’t worry about this freight. On closer examination, there are several tricky questions, especially in the issue of the cost of transport relative to the cost of the product. Let’s think that these questions are not acute as long as there is the park of the rented private railcar fleet.
It is difficult to define the exact reasons for, and consequences of, the current situation on RZD’s network. Obviously, there are some positive dynamics, and transportation must become more attractive for clients. The analysis of statistics, however, shows that it is not enough for consignors. One can speak about the flaws of regulation or about gaps in the legislation, but it would be logical to suppose that the main question is that a definite service provider cannot interest a definite consumer. Perhaps, market players should start to search for new solutions to keep the balance of interests on a more acceptable level. Otherwise, by the time the railway system is organised properly, there will be few people wishing to use its advantages.
By Dmitry Khantsevich
[~DETAIL_TEXT] => Production Volume Grows, Transportation Falls
628.8 million tons of cargo was carried on the Russian railway network in the first six months of the current year, a 3.5% increase on the same period of 2011. To a significant degree, the growth became possible due to the increase in low-yielding cargo transportation (348 million tons or +7% year-on-year). The dynamics of high-yielding freight was more moderate (205 million tons or +3% year-on-year). 70 million tons of mid-yielding cargo made up 98% of the figures reached in January-June 2011. The statistics of this tariff class cargo transportation would be even more depressing, if there hadn’t been a 57% increase in grain transportation (9 million tons). Press cake was the other cargo with positive dynamics in this tariff class (1.4 million tons up by +38%).
Sugar production reduced by more than 50% (according to the Federal Statistics Service), but its dispatches on the network fell by only 30%. There is a similar situation with mineral fertilisers. Experts’ estimations of the metal scrap sector are also contradictory: instability in the domestic and external markets makes producers change their plans.
Transportation of timber on RZD’s network reduces (by 10% year-on-year) disproportionately to logging. According to the Ministry of Industry and Trade, the volume of timber production in the first half of 2012 made up 98% of the last year’s H1 volume. For some products, such as plywood, MDF, etc there was even some increase (from 3 to 6% as compared with January-June 2011). The railway has not always been the best mode for transportation of some types of processed timber, but its popularity for logs transportation is traditionally undoubted. Last year’s decline in this sector could be explained by the widespread instability on the network. Timbermen were demanding railcars during the whole year. There are no alarming signals this year, but the figures do not improve.
Naturally, there have been problems in the sector for several years already, and the worldwide market situation is not promising. Nevertheless, according to the Federal Statistics Service, the logging volume in the first half of this year made up 98.1% as percentage of H1 2011 figures. Therefore, according to experts’ estimation, at least 500,000 tons of timber have been redirected from railways to other transport modes (mainly to road haulages). And the explanation is quite simple. Amid the decline in the profitability of timber business, any increase in expenditure, defining the final cost of products, is very painful for market players. “The European market demonstrates a slightly negative dynamic, which causes a 5-15% decline in the level of prices depending on the type of products,” explain specialists at Vologda Timbermen company. “At the beginning of the year, some owners increased prices for transportation in special rolling stock by 15-20%, which makes railway transportation of some products unprofitable.”
There is a similar situation in eastern regions, where the market cooldown in Asia and the Pacific Region countries coincides with price corrections in the rolling stock supply sector. As a result, timbermen use vehicles more and more actively – previously their route ended at the approach lines of the nearest railway station, but now they build roads directly to the gates of timber processing plants. The problem is more significant than special rolling stock owners’ growing appetite. Harmony between timbermen and railways has not been found yet, and if the trend of re-orientation continues, there may be an unexpected minor solution for the problem of special rolling stock.
There Is A Problem Attracting High-Yielding Cargo …
However strange it is, similar trends are observed in the high-yielding cargo transportation sector. If the decline in mid-yielding cargo transportation sector may be explained by operators’ low attraction to this type of dispatch, transportation of the third tariff class cargoes is traditionally the prize, competition for which is especially tough. If we do not take into consideration transportation of foodstuffs (+19%), livestock (+16%), cars (+6%), and containers (+5%), high-yielding cargoes either remain at last year’s level (e.g. oil and petrochemicals (+3%) and metals (+1%), or reduce. Oil transportation is a rather specific business with pipelines as an alternative and an active state policy applied to production volume and import regulation. As for other cargoes, one has to acknowledge the existence of serious problems servicing potential clients.
One of the brightest examples is the iron and steel industry. Amid almost zero increase in railway transportation, steel production in Russia grew by 4.7% in January-June 2012 to 35.7 million tons, rolled ferrous metal products – by 6.3% to 31.3 million tons.
The biggest increase in consumption was registered in the construction sector, its main factors were from a comparatively low base because of the demand deferred during the crisis, and scaled infrastructure projects financed from the budget. This year, construction will remain the main driver of increased internal demand, because the projects for the Olympics-2014 in Sochi and the FIFA World Cup 2018 are being carried out.
The consumption of flat steel will increase moderately in 2012: on the one hand, car- and similar industries, – the machine building sector’s customers work is stable enough, on the other hand, the pipe industry has reduced its need for this cargo because of the local crisis in it.
“It is impossible to state for sure that the railway lost out on 3-5 million tons of this product, or that it left for other transport modes,” believes Alexander Saenko, analyst at TB-Trust agency. “One should take into account the market situation, because of which metallurgists could have stored their products in warehouses waiting for a better price. Nevertheless, there is such a trend. First of all, it concerns flat products and some other types of cargo, railway transportation of which becomes too expensive and requires too much time and effort.”
The transportation process in this sector is also characterised by the necessity to solve difficult problems, which negatively influences the total volume of railway transportation. Even the increase in export transportation (+4.7%), which is traditionally provided by the railways, failed to compensate for the decline in domestic transportation.
… And No Problems Attracting Low-Yielding Cargoes
The results of the first tariff class cargo transportation seem to be more successful – there was an increase in transportation of most types of the freight and decline in those of smaller importance. Salt (-15%) and firebricks (-4%) together made less than 0.6% of the total volume dispatched on the network. Experts think that the reduction in transportation of iron and manganese ores (-0.9%) was caused by the decline in export supplies, and point at the increase in square billet export, which is the raw material for deeper processing and replaces ore in the production process.
The above mentioned trends, however, are also observed in the transportation of low-yielding freight. Transportation of coal increased by 3.7%, but according to the RF Ministry of Energy, coal extraction grew by 5.3% in January-June 2012 to 167.7 million tons. Exports of Russian coal grew by 19.7% year-on-year to 61.4 million tons. This difference (17 million tons) between output and transportation volume is not significant, it is practically equal to the usual stock balance in warehouses. At the same time, last year’s experience shows that high levels of this figure can turn into a problem sooner or later. Last year, the crisis took place in September, when needs for daily loading in the Kemerovo region suddenly increased from 5,000-5,500 to 7,000-7,500 railcars, and the consequences of the attempts to fulfill the need had a negative impact on the entire network. That’s why the increasing difference between output and transportation volume is traditionally an alarming factor.
The growth of cement loading volumes (+6%) is also rather moderate in comparison with the increase in its production (+17%). Cargo re-direction to motorways and rivers is observed in the sector for the second year running, obviously, an efficient solution to the problem has not been found yet. “In 2011, the infrastructure worked worse than expected, and producers started to increase the share of dispatches by road transport to fulfill their contractual obligations,” notes Pavel Ivankin, CEO of Spetswagontrans. “The infrastructure is working even worse this season, therefore, the trend of expanding the share of dispatches by road haulages will grow,” he says. According to Mr Ivankin, the rolling stock shortage becomes even worse because of the decline in wagon turnover on the network. Cases of wagons idling in laid aside trains (freight trains without locomotives detained on their way to the destination point for commercial, technical, technological or other reasons) have become more frequent. Block trains idle waiting for locomotive replacements can now be an unprecedented 27 hours. Rolling stock is moved on the routes not coinciding with the shortest distances or the train set plan.
Crushed stone transportation is the only bright point in the picture. It makes up the lion’s share of construction materials carried by railways (+19%). Stable growth, colossal potential for dispatches expansion, and the lack of economically efficient ways to re-direct the cargo to other transport modes make railmen sure that they shouldn’t worry about this freight. On closer examination, there are several tricky questions, especially in the issue of the cost of transport relative to the cost of the product. Let’s think that these questions are not acute as long as there is the park of the rented private railcar fleet.
It is difficult to define the exact reasons for, and consequences of, the current situation on RZD’s network. Obviously, there are some positive dynamics, and transportation must become more attractive for clients. The analysis of statistics, however, shows that it is not enough for consignors. One can speak about the flaws of regulation or about gaps in the legislation, but it would be logical to suppose that the main question is that a definite service provider cannot interest a definite consumer. Perhaps, market players should start to search for new solutions to keep the balance of interests on a more acceptable level. Otherwise, by the time the railway system is organised properly, there will be few people wishing to use its advantages.
By Dmitry Khantsevich
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[DETAIL_TEXT] => Ukrainian Transport Enterprises Reduce Cargo Transportation by 4.2% in H1 2012
In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
There was also a decline in cargo transportation by all transport modes except road haulages and air transport. Railways reduced transportation by 0.2% in comparison with January – June 2011 to 224.1 million tons. Railway cargo turnover grew by 0.9% in H1 2012 to 118.8 billion tonne-kilometres.
Cargo transportation by water transport fell by 24.8% to 3.1 million tons; the cargo turnover in the sector fell by 26.5% to 2.8 billion tonne-kilometres. Transportation by pipelines declined by almost 20% to 68.9 million tons; the cargo turnover fell by 25% to 56.2 billion tonne-kilometres.
Transportation by road haulages grew by 1.6% to 83.6 million tons; the cargo turnover in the sector increased by 2% to 18.6 billion tonne-kilometres. Air transportation of cargo amounted to approximately 50,000 tons of freight (+21.2%).
Kazakhstan: Cargo Turnover Increases by An 14% in H1 2012
In January-June 2012, the cargo turnover in Kazakhstan amounted to 222.1 billion tonne-kilometres, 14.4% increase year-on-year.
According to the Kazakh State Statistics Agency, railway transport cargo turnover amounted to 114.2 billion ton-kilometres (+10.9% year-on-year). Cargo turnover of road transport was 55.1 billion tonne-kilometres (+38.2%), that of sea transport – 1.3 billion tonne-kilometres (-14.4%), that of air transport – 23.3 million tonne-kilometres (-48.4%), and that of river transport – 20.1 million tonne-kilometres (-4.3%).
In H1 2012, the passenger turnover in the Republic was 98.7 billion passenger-kilometres, a 23.3% increase in comparison with January-June 2012.
LDz 13% in Cargo Transportation Volume in H1 2012
In the first six months of 2012, cargo transportation volume of LDz Cargo (a subsidiary of Latvijas dzelzcels) grew by 12.8% as compared with the same period of the previous year to 33.708 million tons.
During the period, the company transported 27.483 million tons of imports (+12.4% year-on-year). Of that, 25.637 million tons (+13.1%) was carried via port stations. In H1 of 2012, LDz Cargo transported 2.681 million tons of exports (+12.8%). Of that, 1.727 million tons was carried via port stations, a 16.5% increase as compared to the first six months of 2011. Transit transportation amounted to 3.068 million tons of freight (+12.8%). Domestic transportation volume was 476,000 tons (+16.5%). In June 2012, LDz Cargo dispatched 5.055 million tons of cargo (+11.9%). In 2011, the company’s cargo transportation volume was 59.385 million tons (+20.8% year-on-year).
Chelyabinsk Region and China Sign Agreement on Transport Corridor Development
The Chelyabinsk region (Russia) and China intend to develop an international transport corridor Urumqi (China) – Dostyk/Khorgos (Kazakhstan) – Kartaly (Chelyabinsk region).
A respective agreement about it was signed on June 5, 2012, by the delegation of the Chelyabinsk region and the government of Xinjiang Uyghur Autonomous Region of the People’s Republic of China.
Two trade and logistic complexes are to be constructed in the Chelyabinsk region and Urumqi. Two agreements with Chinese companies have been concluded to provide a cargo flow of 2.5 million tons per annum via the corridor by 2014. Work is underway to conclude agreements with other companies working in the Shanghai Cooperation Organization (SCO) space.
With the support of the Business Council of the SCO, a pilot project of transport corridor development has started in the region. The corridor will join the western part of China and Russia via the Chelyabinsk region.
This would give a powerful stimulus to the development of the national economies of the SCO member-states, said Mikhail Yurevich, Governor of the Chelyabinsk region.
Also, the new transport corridor will help to attract additional cargo volumes to rail transport, which will bring more profit, considers the Governor.
[~DETAIL_TEXT] => Ukrainian Transport Enterprises Reduce Cargo Transportation by 4.2% in H1 2012
In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
There was also a decline in cargo transportation by all transport modes except road haulages and air transport. Railways reduced transportation by 0.2% in comparison with January – June 2011 to 224.1 million tons. Railway cargo turnover grew by 0.9% in H1 2012 to 118.8 billion tonne-kilometres.
Cargo transportation by water transport fell by 24.8% to 3.1 million tons; the cargo turnover in the sector fell by 26.5% to 2.8 billion tonne-kilometres. Transportation by pipelines declined by almost 20% to 68.9 million tons; the cargo turnover fell by 25% to 56.2 billion tonne-kilometres.
Transportation by road haulages grew by 1.6% to 83.6 million tons; the cargo turnover in the sector increased by 2% to 18.6 billion tonne-kilometres. Air transportation of cargo amounted to approximately 50,000 tons of freight (+21.2%).
Kazakhstan: Cargo Turnover Increases by An 14% in H1 2012
In January-June 2012, the cargo turnover in Kazakhstan amounted to 222.1 billion tonne-kilometres, 14.4% increase year-on-year.
According to the Kazakh State Statistics Agency, railway transport cargo turnover amounted to 114.2 billion ton-kilometres (+10.9% year-on-year). Cargo turnover of road transport was 55.1 billion tonne-kilometres (+38.2%), that of sea transport – 1.3 billion tonne-kilometres (-14.4%), that of air transport – 23.3 million tonne-kilometres (-48.4%), and that of river transport – 20.1 million tonne-kilometres (-4.3%).
In H1 2012, the passenger turnover in the Republic was 98.7 billion passenger-kilometres, a 23.3% increase in comparison with January-June 2012.
LDz 13% in Cargo Transportation Volume in H1 2012
In the first six months of 2012, cargo transportation volume of LDz Cargo (a subsidiary of Latvijas dzelzcels) grew by 12.8% as compared with the same period of the previous year to 33.708 million tons.
During the period, the company transported 27.483 million tons of imports (+12.4% year-on-year). Of that, 25.637 million tons (+13.1%) was carried via port stations. In H1 of 2012, LDz Cargo transported 2.681 million tons of exports (+12.8%). Of that, 1.727 million tons was carried via port stations, a 16.5% increase as compared to the first six months of 2011. Transit transportation amounted to 3.068 million tons of freight (+12.8%). Domestic transportation volume was 476,000 tons (+16.5%). In June 2012, LDz Cargo dispatched 5.055 million tons of cargo (+11.9%). In 2011, the company’s cargo transportation volume was 59.385 million tons (+20.8% year-on-year).
Chelyabinsk Region and China Sign Agreement on Transport Corridor Development
The Chelyabinsk region (Russia) and China intend to develop an international transport corridor Urumqi (China) – Dostyk/Khorgos (Kazakhstan) – Kartaly (Chelyabinsk region).
A respective agreement about it was signed on June 5, 2012, by the delegation of the Chelyabinsk region and the government of Xinjiang Uyghur Autonomous Region of the People’s Republic of China.
Two trade and logistic complexes are to be constructed in the Chelyabinsk region and Urumqi. Two agreements with Chinese companies have been concluded to provide a cargo flow of 2.5 million tons per annum via the corridor by 2014. Work is underway to conclude agreements with other companies working in the Shanghai Cooperation Organization (SCO) space.
With the support of the Business Council of the SCO, a pilot project of transport corridor development has started in the region. The corridor will join the western part of China and Russia via the Chelyabinsk region.
This would give a powerful stimulus to the development of the national economies of the SCO member-states, said Mikhail Yurevich, Governor of the Chelyabinsk region.
Also, the new transport corridor will help to attract additional cargo volumes to rail transport, which will bring more profit, considers the Governor.
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[PREVIEW_TEXT] => In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
[~PREVIEW_TEXT] => In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
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[SECTION_META_DESCRIPTION] => In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
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The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
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[DETAIL_TEXT] => Ukrainian Transport Enterprises Reduce Cargo Transportation by 4.2% in H1 2012
In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
There was also a decline in cargo transportation by all transport modes except road haulages and air transport. Railways reduced transportation by 0.2% in comparison with January – June 2011 to 224.1 million tons. Railway cargo turnover grew by 0.9% in H1 2012 to 118.8 billion tonne-kilometres.
Cargo transportation by water transport fell by 24.8% to 3.1 million tons; the cargo turnover in the sector fell by 26.5% to 2.8 billion tonne-kilometres. Transportation by pipelines declined by almost 20% to 68.9 million tons; the cargo turnover fell by 25% to 56.2 billion tonne-kilometres.
Transportation by road haulages grew by 1.6% to 83.6 million tons; the cargo turnover in the sector increased by 2% to 18.6 billion tonne-kilometres. Air transportation of cargo amounted to approximately 50,000 tons of freight (+21.2%).
Kazakhstan: Cargo Turnover Increases by An 14% in H1 2012
In January-June 2012, the cargo turnover in Kazakhstan amounted to 222.1 billion tonne-kilometres, 14.4% increase year-on-year.
According to the Kazakh State Statistics Agency, railway transport cargo turnover amounted to 114.2 billion ton-kilometres (+10.9% year-on-year). Cargo turnover of road transport was 55.1 billion tonne-kilometres (+38.2%), that of sea transport – 1.3 billion tonne-kilometres (-14.4%), that of air transport – 23.3 million tonne-kilometres (-48.4%), and that of river transport – 20.1 million tonne-kilometres (-4.3%).
In H1 2012, the passenger turnover in the Republic was 98.7 billion passenger-kilometres, a 23.3% increase in comparison with January-June 2012.
LDz 13% in Cargo Transportation Volume in H1 2012
In the first six months of 2012, cargo transportation volume of LDz Cargo (a subsidiary of Latvijas dzelzcels) grew by 12.8% as compared with the same period of the previous year to 33.708 million tons.
During the period, the company transported 27.483 million tons of imports (+12.4% year-on-year). Of that, 25.637 million tons (+13.1%) was carried via port stations. In H1 of 2012, LDz Cargo transported 2.681 million tons of exports (+12.8%). Of that, 1.727 million tons was carried via port stations, a 16.5% increase as compared to the first six months of 2011. Transit transportation amounted to 3.068 million tons of freight (+12.8%). Domestic transportation volume was 476,000 tons (+16.5%). In June 2012, LDz Cargo dispatched 5.055 million tons of cargo (+11.9%). In 2011, the company’s cargo transportation volume was 59.385 million tons (+20.8% year-on-year).
Chelyabinsk Region and China Sign Agreement on Transport Corridor Development
The Chelyabinsk region (Russia) and China intend to develop an international transport corridor Urumqi (China) – Dostyk/Khorgos (Kazakhstan) – Kartaly (Chelyabinsk region).
A respective agreement about it was signed on June 5, 2012, by the delegation of the Chelyabinsk region and the government of Xinjiang Uyghur Autonomous Region of the People’s Republic of China.
Two trade and logistic complexes are to be constructed in the Chelyabinsk region and Urumqi. Two agreements with Chinese companies have been concluded to provide a cargo flow of 2.5 million tons per annum via the corridor by 2014. Work is underway to conclude agreements with other companies working in the Shanghai Cooperation Organization (SCO) space.
With the support of the Business Council of the SCO, a pilot project of transport corridor development has started in the region. The corridor will join the western part of China and Russia via the Chelyabinsk region.
This would give a powerful stimulus to the development of the national economies of the SCO member-states, said Mikhail Yurevich, Governor of the Chelyabinsk region.
Also, the new transport corridor will help to attract additional cargo volumes to rail transport, which will bring more profit, considers the Governor.
[~DETAIL_TEXT] => Ukrainian Transport Enterprises Reduce Cargo Transportation by 4.2% in H1 2012
In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
There was also a decline in cargo transportation by all transport modes except road haulages and air transport. Railways reduced transportation by 0.2% in comparison with January – June 2011 to 224.1 million tons. Railway cargo turnover grew by 0.9% in H1 2012 to 118.8 billion tonne-kilometres.
Cargo transportation by water transport fell by 24.8% to 3.1 million tons; the cargo turnover in the sector fell by 26.5% to 2.8 billion tonne-kilometres. Transportation by pipelines declined by almost 20% to 68.9 million tons; the cargo turnover fell by 25% to 56.2 billion tonne-kilometres.
Transportation by road haulages grew by 1.6% to 83.6 million tons; the cargo turnover in the sector increased by 2% to 18.6 billion tonne-kilometres. Air transportation of cargo amounted to approximately 50,000 tons of freight (+21.2%).
Kazakhstan: Cargo Turnover Increases by An 14% in H1 2012
In January-June 2012, the cargo turnover in Kazakhstan amounted to 222.1 billion tonne-kilometres, 14.4% increase year-on-year.
According to the Kazakh State Statistics Agency, railway transport cargo turnover amounted to 114.2 billion ton-kilometres (+10.9% year-on-year). Cargo turnover of road transport was 55.1 billion tonne-kilometres (+38.2%), that of sea transport – 1.3 billion tonne-kilometres (-14.4%), that of air transport – 23.3 million tonne-kilometres (-48.4%), and that of river transport – 20.1 million tonne-kilometres (-4.3%).
In H1 2012, the passenger turnover in the Republic was 98.7 billion passenger-kilometres, a 23.3% increase in comparison with January-June 2012.
LDz 13% in Cargo Transportation Volume in H1 2012
In the first six months of 2012, cargo transportation volume of LDz Cargo (a subsidiary of Latvijas dzelzcels) grew by 12.8% as compared with the same period of the previous year to 33.708 million tons.
During the period, the company transported 27.483 million tons of imports (+12.4% year-on-year). Of that, 25.637 million tons (+13.1%) was carried via port stations. In H1 of 2012, LDz Cargo transported 2.681 million tons of exports (+12.8%). Of that, 1.727 million tons was carried via port stations, a 16.5% increase as compared to the first six months of 2011. Transit transportation amounted to 3.068 million tons of freight (+12.8%). Domestic transportation volume was 476,000 tons (+16.5%). In June 2012, LDz Cargo dispatched 5.055 million tons of cargo (+11.9%). In 2011, the company’s cargo transportation volume was 59.385 million tons (+20.8% year-on-year).
Chelyabinsk Region and China Sign Agreement on Transport Corridor Development
The Chelyabinsk region (Russia) and China intend to develop an international transport corridor Urumqi (China) – Dostyk/Khorgos (Kazakhstan) – Kartaly (Chelyabinsk region).
A respective agreement about it was signed on June 5, 2012, by the delegation of the Chelyabinsk region and the government of Xinjiang Uyghur Autonomous Region of the People’s Republic of China.
Two trade and logistic complexes are to be constructed in the Chelyabinsk region and Urumqi. Two agreements with Chinese companies have been concluded to provide a cargo flow of 2.5 million tons per annum via the corridor by 2014. Work is underway to conclude agreements with other companies working in the Shanghai Cooperation Organization (SCO) space.
With the support of the Business Council of the SCO, a pilot project of transport corridor development has started in the region. The corridor will join the western part of China and Russia via the Chelyabinsk region.
This would give a powerful stimulus to the development of the national economies of the SCO member-states, said Mikhail Yurevich, Governor of the Chelyabinsk region.
Also, the new transport corridor will help to attract additional cargo volumes to rail transport, which will bring more profit, considers the Governor.
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The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
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[SECTION_META_DESCRIPTION] => In January – June 2012, the volume of cargo transportation by all transport modes in Ukraine fell by 4.2% in comparison with the same period in the previous year to 379.8 million tons, the Republic’s State Statistics Service said.
The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
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The total cargo turnover decreased by 8.5% to 196.8 billion tonne-kilometres.
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