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The significant growth of road transportation in Russia has lead to the increase of demand for new trucks. Foreign vehicles actively put out the ones produced in Russia. Domestic producers are trying hard to compete with European and Asian manufacturers, but they haven’t succeeded in it so far.
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[DETAIL_TEXT] => The Main Advantage Is “from Door to Door”
According to the data of the RF Ministry of Transport, in H1 of 2007 the freight motor park of all the sectors of the economy transported 3.1 billion tons of cargo, 1.7% down year-on-year. The throughput increased by 0.7%. On the whole, in 2006 road transport carried 6.8 billion tons of freight, its throughput amounted to 198.9 billion t/km.
During the last 15 years, orders for freight transportation by vehicles grew by over 1,000%, thus the freight road transportation market increased at least ten-fold. Freight transportation by road haulage is the most popular type of cargo transportation in Russia. Taking into account the constant growth of prices for energy carriers, in particular petrol, road hauliers win the competition with their colleagues – railway, air and shipping companies. This fact is supported by the figures mentioned at a meeting of the RF Transport Ministry Board. According to the Ministry’s statistic figures, the share of road transport is over 80% of the total freight transportation volume (excluding pipelines). According to some evaluations, road transport carries over 18 million tons daily, which significantly exceeds freight transportation by railway. “In particular, 1.311 billion tons of cargo was carried along Russian railway network in 2006, and the throughput amounted to 1.948 trillion t/km”, show the results of the research “Russian Market of Freight Road Transportation” held by ABARUS Market Research company in 2006.
Import Attacks
As a consequence of growth in freight transportation by road haulage, the sales of cargo transport develop actively. “The total park of trucks in Russia amounts to about 4.47 million units. Out of them only 5% of vehicles were produced less than two years ago”, says Dmitry Chumakov, CEO of market research agency Vector Market Research. According to its assessments, the rates of freight road transportation growth are about 15-20% during the last two years. “The Russian market of freight vehicles is booming due to the increase of Russian trucks production as well as new ones manufactured abroad. According to the data of a German market company Best Statistik, the sales volume of European freight vehicles grew by 48% in Russia in 2006. The sales volume of new and second-hand cars from Europe amounted to 36.5 thousand trucks”, agrees Olga Krivonogova, marketing and PR manager of Scania-Russia company.
Today the most rapidly growing segment in the structure of commercial vehicles in Russia is heavy lorries with a full mass of 14-40 tons. According to OAO KAMAZ, the group’s sales volume in 2006 grew by 39% year-on-year to 94.5 thousand units. “By October 2007, KAMAZ manufactured 38,000 trucks. The plan for 2007 envisages that the manufacture volume of the basic production is to exceed 50 thousand units. By 2012 the plant will produce 80 thousand trucks”, forecasts Vladimir Samoilov, Director for Information Policy of OAO KAMAZ.
“According to our evaluations, the segment of freight vehicles will continue to grow for several years more in Russia. Preliminary forecasts run that in five years the market volume will increase two-fold”, believes Sergey Ilyinsky, PR manager of Severstal-Auto.
“The share of the CIS truck producers (KAMAZ, Ural, MAZ) is about 57% of the whole volume; the share of second-hand foreign lorries is 37%, and the rest6% is new foreign trucks. And the share of the latter has been constantly growing recently”, notes Denis Sokolov, analyst of the Stock Market Analysis Division of the Analytical Department, investment bank “KIT Finance”. One third of the trucks sold in 2006 are mainline heavy haulages, and the leaders in the segment are foreign companies. Another third is special facilities, and the rest is dumpers, lorries with sides, etc.
Buy Wholesale
It is no surprise that such attractive growth rates became an excuse for foreign road train deliveries to Russia. One of the most scaled-up is the contract of German concern MAN. According to the terms of the contract, it will deliver 200 road trains to Russian road carriers. On the international leasing terms, it is planned to deliver another 800 vehicles in the framework of the second tranche. It is suggested that the lessees will be large Russian carriers: OAO Sovtransauto, Navigator company, D-Trans group of companies, and other members of the International Road Hauliers Association (ASMAP).
Almost all operators on the road transportation market have plans concerning rolling stock renewal. “Before 1991 we used road trains produced by Russian companies on the base of MAZ tractor truck. Meanwhile, already at that time we understood that foreign vehicles are more profitable in spite of their higher price, more efficient and compensate for the expenses much better. In 1973 Sovtransauto concluded a contract with Volvo for delivery of 100 tractor units. In 2008 we are going to lease 300 road trains produced by MAN and Mercedes. Taking into account advance and leasing payments, the company’s enterprises will spend annually about EUR 3 million on park renewal”, says CEO of ZAO Sovtransauto holding company Anatoly Tyan.
The logistics group of companies Armadillo has also adopted a three-year programme of park renewal. “In 2007, 23 new Ford vehicles have been purchased. This is a significant investment, but we understand that reliable modern trucks are required to provide services meeting high standards. Next year we will start to replace medium-tonnage Scania vehicles by Volvo lorries equipped with hydro sides”, tells Director for Operations in Moscow of Armadillo group of companies, Oleg Korobkin.
Purchase Foreign Vehicles
Carriers have several reasons to purchase foreign trucks. “Unfortunately, in Russia, the production of modern competitive mainline road trains to provide international freight transportation hasn’t been developed yet. European rolling stock meets current technical, exploitation and consumer requirements. Foreign producers have significantly increased the mileage from one technical maintenance procedure to another, which reduces expenses on its maintenance. The vehicles have become more reliable, and the mileage without capital repair is over 1 million km”, explains A. Tyan.
The share of Russian vehicles in the park of Armadillo group of companies is now about 20% and it decreases step-by-step. “In a year, the company’s park will consist of only foreign vehicles. It is explained by environment-friendliness, higher comfort for a driver, transparent conditions of guarantee- and after guarantee maintenance. An important drawback of Russian vehicles is their low reliability, fast breakage of junctions and sets, and as a result, much time is spent on idling before their repair”, says O. Korobkin.
In turn, Russian producers do not agree with the statement that their production is not required by the market. “Our company develops new junctions and sets, new models of vehicles and their families. To keep the share of OAO KAMAZ on the Russian market, it is planned to present to the market a new mainline arctic KAMAZ-5480. Moreover, KAMAZ is ready to produce trucks with Euro-3 engines. But nowadays, there is no proper fuel for them in Russia! The legislation for the transfer to Euro-3 fuel production has not been defined yet, and nowadays oil companies are not eager to invest in refinery modernisation. Meanwhile, the fact that KAMAZ and other car-producing plants invest hundreds of millions of dollars, sums up the representative of KAMAZ press-service.
Legislative Mess
Meanwhile, the problem of Russian rolling stock quality is not the only one road hauliers face. “However strange it is, one of the most serous problems for our holding company as well as for many international road hauliers is the preference for modern import rolling stock purchase given by the state. The Decree of the Russian Government “On Additional Measures of the State Support for Russian Road Transport Targeted for International Transportation” created conditions for total release from customs dues and taxes on leasing of new import road trains that were placed under the customs temporary import procedure”, complain specialists of Sovtransauto company.
When the Decree was adopted, the Government had the following condition: the vehicles are to be used only for international transportation. All the enterprises of Sovtransauto system as well as most Russian international carriers used the privileges provided by the Decree. After 2003, the rates of road trains meeting Euro-3 and Euro-4 purchase increased two- and even threefold.
“The Decree of the Government was at that time a real support for carriers and allowed them to increase their share on the international market of transport services to 40%”, says A. Tyan. However, all good things have a reverse side. In five or six years of intensive exploitation the vehicles are to be used in derated operation, in particular for transportation inside Russia. Still, there appears another problem: to use the vehicles for domestic transportation, a company must pay the customs cost. Meanwhile, the customs tariff per cent rates are used only until the age of a vehicle is less than 5 years, and then enormous “prohibitive” dues are applied. The latter depends on the engine volume: EUR 2.2 must be paid for every cubic centimeter.
Thus, a proper solution must be found for the vehicles imported according to the scheme in 2003, say road carriers. The paradox is that these trucks may not be discarded until all the procedures of their registration for use inside Russia are completed.
Resume: Manufacture Has a Bright Future
“The companies providing international freight transportation have the highest rates of growth – about 8% annually. Nowadays, their park is about 22-23 thousand freight heavy haulages”, emphasises D. Chumakov. The interest of foreign companies is proved by their plans to organize trucks production is Russia. The list of such companies includes Isuzu, Volvo/Renault, Scania and Iveco. In other words, lorry producers will use the same scheme as car producers, which already manufacture thousands and thousands of cars at their plants in Russia.
By Maria Shevchenko
[~DETAIL_TEXT] => The Main Advantage Is “from Door to Door”
According to the data of the RF Ministry of Transport, in H1 of 2007 the freight motor park of all the sectors of the economy transported 3.1 billion tons of cargo, 1.7% down year-on-year. The throughput increased by 0.7%. On the whole, in 2006 road transport carried 6.8 billion tons of freight, its throughput amounted to 198.9 billion t/km.
During the last 15 years, orders for freight transportation by vehicles grew by over 1,000%, thus the freight road transportation market increased at least ten-fold. Freight transportation by road haulage is the most popular type of cargo transportation in Russia. Taking into account the constant growth of prices for energy carriers, in particular petrol, road hauliers win the competition with their colleagues – railway, air and shipping companies. This fact is supported by the figures mentioned at a meeting of the RF Transport Ministry Board. According to the Ministry’s statistic figures, the share of road transport is over 80% of the total freight transportation volume (excluding pipelines). According to some evaluations, road transport carries over 18 million tons daily, which significantly exceeds freight transportation by railway. “In particular, 1.311 billion tons of cargo was carried along Russian railway network in 2006, and the throughput amounted to 1.948 trillion t/km”, show the results of the research “Russian Market of Freight Road Transportation” held by ABARUS Market Research company in 2006.
Import Attacks
As a consequence of growth in freight transportation by road haulage, the sales of cargo transport develop actively. “The total park of trucks in Russia amounts to about 4.47 million units. Out of them only 5% of vehicles were produced less than two years ago”, says Dmitry Chumakov, CEO of market research agency Vector Market Research. According to its assessments, the rates of freight road transportation growth are about 15-20% during the last two years. “The Russian market of freight vehicles is booming due to the increase of Russian trucks production as well as new ones manufactured abroad. According to the data of a German market company Best Statistik, the sales volume of European freight vehicles grew by 48% in Russia in 2006. The sales volume of new and second-hand cars from Europe amounted to 36.5 thousand trucks”, agrees Olga Krivonogova, marketing and PR manager of Scania-Russia company.
Today the most rapidly growing segment in the structure of commercial vehicles in Russia is heavy lorries with a full mass of 14-40 tons. According to OAO KAMAZ, the group’s sales volume in 2006 grew by 39% year-on-year to 94.5 thousand units. “By October 2007, KAMAZ manufactured 38,000 trucks. The plan for 2007 envisages that the manufacture volume of the basic production is to exceed 50 thousand units. By 2012 the plant will produce 80 thousand trucks”, forecasts Vladimir Samoilov, Director for Information Policy of OAO KAMAZ.
“According to our evaluations, the segment of freight vehicles will continue to grow for several years more in Russia. Preliminary forecasts run that in five years the market volume will increase two-fold”, believes Sergey Ilyinsky, PR manager of Severstal-Auto.
“The share of the CIS truck producers (KAMAZ, Ural, MAZ) is about 57% of the whole volume; the share of second-hand foreign lorries is 37%, and the rest6% is new foreign trucks. And the share of the latter has been constantly growing recently”, notes Denis Sokolov, analyst of the Stock Market Analysis Division of the Analytical Department, investment bank “KIT Finance”. One third of the trucks sold in 2006 are mainline heavy haulages, and the leaders in the segment are foreign companies. Another third is special facilities, and the rest is dumpers, lorries with sides, etc.
Buy Wholesale
It is no surprise that such attractive growth rates became an excuse for foreign road train deliveries to Russia. One of the most scaled-up is the contract of German concern MAN. According to the terms of the contract, it will deliver 200 road trains to Russian road carriers. On the international leasing terms, it is planned to deliver another 800 vehicles in the framework of the second tranche. It is suggested that the lessees will be large Russian carriers: OAO Sovtransauto, Navigator company, D-Trans group of companies, and other members of the International Road Hauliers Association (ASMAP).
Almost all operators on the road transportation market have plans concerning rolling stock renewal. “Before 1991 we used road trains produced by Russian companies on the base of MAZ tractor truck. Meanwhile, already at that time we understood that foreign vehicles are more profitable in spite of their higher price, more efficient and compensate for the expenses much better. In 1973 Sovtransauto concluded a contract with Volvo for delivery of 100 tractor units. In 2008 we are going to lease 300 road trains produced by MAN and Mercedes. Taking into account advance and leasing payments, the company’s enterprises will spend annually about EUR 3 million on park renewal”, says CEO of ZAO Sovtransauto holding company Anatoly Tyan.
The logistics group of companies Armadillo has also adopted a three-year programme of park renewal. “In 2007, 23 new Ford vehicles have been purchased. This is a significant investment, but we understand that reliable modern trucks are required to provide services meeting high standards. Next year we will start to replace medium-tonnage Scania vehicles by Volvo lorries equipped with hydro sides”, tells Director for Operations in Moscow of Armadillo group of companies, Oleg Korobkin.
Purchase Foreign Vehicles
Carriers have several reasons to purchase foreign trucks. “Unfortunately, in Russia, the production of modern competitive mainline road trains to provide international freight transportation hasn’t been developed yet. European rolling stock meets current technical, exploitation and consumer requirements. Foreign producers have significantly increased the mileage from one technical maintenance procedure to another, which reduces expenses on its maintenance. The vehicles have become more reliable, and the mileage without capital repair is over 1 million km”, explains A. Tyan.
The share of Russian vehicles in the park of Armadillo group of companies is now about 20% and it decreases step-by-step. “In a year, the company’s park will consist of only foreign vehicles. It is explained by environment-friendliness, higher comfort for a driver, transparent conditions of guarantee- and after guarantee maintenance. An important drawback of Russian vehicles is their low reliability, fast breakage of junctions and sets, and as a result, much time is spent on idling before their repair”, says O. Korobkin.
In turn, Russian producers do not agree with the statement that their production is not required by the market. “Our company develops new junctions and sets, new models of vehicles and their families. To keep the share of OAO KAMAZ on the Russian market, it is planned to present to the market a new mainline arctic KAMAZ-5480. Moreover, KAMAZ is ready to produce trucks with Euro-3 engines. But nowadays, there is no proper fuel for them in Russia! The legislation for the transfer to Euro-3 fuel production has not been defined yet, and nowadays oil companies are not eager to invest in refinery modernisation. Meanwhile, the fact that KAMAZ and other car-producing plants invest hundreds of millions of dollars, sums up the representative of KAMAZ press-service.
Legislative Mess
Meanwhile, the problem of Russian rolling stock quality is not the only one road hauliers face. “However strange it is, one of the most serous problems for our holding company as well as for many international road hauliers is the preference for modern import rolling stock purchase given by the state. The Decree of the Russian Government “On Additional Measures of the State Support for Russian Road Transport Targeted for International Transportation” created conditions for total release from customs dues and taxes on leasing of new import road trains that were placed under the customs temporary import procedure”, complain specialists of Sovtransauto company.
When the Decree was adopted, the Government had the following condition: the vehicles are to be used only for international transportation. All the enterprises of Sovtransauto system as well as most Russian international carriers used the privileges provided by the Decree. After 2003, the rates of road trains meeting Euro-3 and Euro-4 purchase increased two- and even threefold.
“The Decree of the Government was at that time a real support for carriers and allowed them to increase their share on the international market of transport services to 40%”, says A. Tyan. However, all good things have a reverse side. In five or six years of intensive exploitation the vehicles are to be used in derated operation, in particular for transportation inside Russia. Still, there appears another problem: to use the vehicles for domestic transportation, a company must pay the customs cost. Meanwhile, the customs tariff per cent rates are used only until the age of a vehicle is less than 5 years, and then enormous “prohibitive” dues are applied. The latter depends on the engine volume: EUR 2.2 must be paid for every cubic centimeter.
Thus, a proper solution must be found for the vehicles imported according to the scheme in 2003, say road carriers. The paradox is that these trucks may not be discarded until all the procedures of their registration for use inside Russia are completed.
Resume: Manufacture Has a Bright Future
“The companies providing international freight transportation have the highest rates of growth – about 8% annually. Nowadays, their park is about 22-23 thousand freight heavy haulages”, emphasises D. Chumakov. The interest of foreign companies is proved by their plans to organize trucks production is Russia. The list of such companies includes Isuzu, Volvo/Renault, Scania and Iveco. In other words, lorry producers will use the same scheme as car producers, which already manufacture thousands and thousands of cars at their plants in Russia.
By Maria Shevchenko
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[DETAIL_TEXT] => The Main Advantage Is “from Door to Door”
According to the data of the RF Ministry of Transport, in H1 of 2007 the freight motor park of all the sectors of the economy transported 3.1 billion tons of cargo, 1.7% down year-on-year. The throughput increased by 0.7%. On the whole, in 2006 road transport carried 6.8 billion tons of freight, its throughput amounted to 198.9 billion t/km.
During the last 15 years, orders for freight transportation by vehicles grew by over 1,000%, thus the freight road transportation market increased at least ten-fold. Freight transportation by road haulage is the most popular type of cargo transportation in Russia. Taking into account the constant growth of prices for energy carriers, in particular petrol, road hauliers win the competition with their colleagues – railway, air and shipping companies. This fact is supported by the figures mentioned at a meeting of the RF Transport Ministry Board. According to the Ministry’s statistic figures, the share of road transport is over 80% of the total freight transportation volume (excluding pipelines). According to some evaluations, road transport carries over 18 million tons daily, which significantly exceeds freight transportation by railway. “In particular, 1.311 billion tons of cargo was carried along Russian railway network in 2006, and the throughput amounted to 1.948 trillion t/km”, show the results of the research “Russian Market of Freight Road Transportation” held by ABARUS Market Research company in 2006.
Import Attacks
As a consequence of growth in freight transportation by road haulage, the sales of cargo transport develop actively. “The total park of trucks in Russia amounts to about 4.47 million units. Out of them only 5% of vehicles were produced less than two years ago”, says Dmitry Chumakov, CEO of market research agency Vector Market Research. According to its assessments, the rates of freight road transportation growth are about 15-20% during the last two years. “The Russian market of freight vehicles is booming due to the increase of Russian trucks production as well as new ones manufactured abroad. According to the data of a German market company Best Statistik, the sales volume of European freight vehicles grew by 48% in Russia in 2006. The sales volume of new and second-hand cars from Europe amounted to 36.5 thousand trucks”, agrees Olga Krivonogova, marketing and PR manager of Scania-Russia company.
Today the most rapidly growing segment in the structure of commercial vehicles in Russia is heavy lorries with a full mass of 14-40 tons. According to OAO KAMAZ, the group’s sales volume in 2006 grew by 39% year-on-year to 94.5 thousand units. “By October 2007, KAMAZ manufactured 38,000 trucks. The plan for 2007 envisages that the manufacture volume of the basic production is to exceed 50 thousand units. By 2012 the plant will produce 80 thousand trucks”, forecasts Vladimir Samoilov, Director for Information Policy of OAO KAMAZ.
“According to our evaluations, the segment of freight vehicles will continue to grow for several years more in Russia. Preliminary forecasts run that in five years the market volume will increase two-fold”, believes Sergey Ilyinsky, PR manager of Severstal-Auto.
“The share of the CIS truck producers (KAMAZ, Ural, MAZ) is about 57% of the whole volume; the share of second-hand foreign lorries is 37%, and the rest6% is new foreign trucks. And the share of the latter has been constantly growing recently”, notes Denis Sokolov, analyst of the Stock Market Analysis Division of the Analytical Department, investment bank “KIT Finance”. One third of the trucks sold in 2006 are mainline heavy haulages, and the leaders in the segment are foreign companies. Another third is special facilities, and the rest is dumpers, lorries with sides, etc.
Buy Wholesale
It is no surprise that such attractive growth rates became an excuse for foreign road train deliveries to Russia. One of the most scaled-up is the contract of German concern MAN. According to the terms of the contract, it will deliver 200 road trains to Russian road carriers. On the international leasing terms, it is planned to deliver another 800 vehicles in the framework of the second tranche. It is suggested that the lessees will be large Russian carriers: OAO Sovtransauto, Navigator company, D-Trans group of companies, and other members of the International Road Hauliers Association (ASMAP).
Almost all operators on the road transportation market have plans concerning rolling stock renewal. “Before 1991 we used road trains produced by Russian companies on the base of MAZ tractor truck. Meanwhile, already at that time we understood that foreign vehicles are more profitable in spite of their higher price, more efficient and compensate for the expenses much better. In 1973 Sovtransauto concluded a contract with Volvo for delivery of 100 tractor units. In 2008 we are going to lease 300 road trains produced by MAN and Mercedes. Taking into account advance and leasing payments, the company’s enterprises will spend annually about EUR 3 million on park renewal”, says CEO of ZAO Sovtransauto holding company Anatoly Tyan.
The logistics group of companies Armadillo has also adopted a three-year programme of park renewal. “In 2007, 23 new Ford vehicles have been purchased. This is a significant investment, but we understand that reliable modern trucks are required to provide services meeting high standards. Next year we will start to replace medium-tonnage Scania vehicles by Volvo lorries equipped with hydro sides”, tells Director for Operations in Moscow of Armadillo group of companies, Oleg Korobkin.
Purchase Foreign Vehicles
Carriers have several reasons to purchase foreign trucks. “Unfortunately, in Russia, the production of modern competitive mainline road trains to provide international freight transportation hasn’t been developed yet. European rolling stock meets current technical, exploitation and consumer requirements. Foreign producers have significantly increased the mileage from one technical maintenance procedure to another, which reduces expenses on its maintenance. The vehicles have become more reliable, and the mileage without capital repair is over 1 million km”, explains A. Tyan.
The share of Russian vehicles in the park of Armadillo group of companies is now about 20% and it decreases step-by-step. “In a year, the company’s park will consist of only foreign vehicles. It is explained by environment-friendliness, higher comfort for a driver, transparent conditions of guarantee- and after guarantee maintenance. An important drawback of Russian vehicles is their low reliability, fast breakage of junctions and sets, and as a result, much time is spent on idling before their repair”, says O. Korobkin.
In turn, Russian producers do not agree with the statement that their production is not required by the market. “Our company develops new junctions and sets, new models of vehicles and their families. To keep the share of OAO KAMAZ on the Russian market, it is planned to present to the market a new mainline arctic KAMAZ-5480. Moreover, KAMAZ is ready to produce trucks with Euro-3 engines. But nowadays, there is no proper fuel for them in Russia! The legislation for the transfer to Euro-3 fuel production has not been defined yet, and nowadays oil companies are not eager to invest in refinery modernisation. Meanwhile, the fact that KAMAZ and other car-producing plants invest hundreds of millions of dollars, sums up the representative of KAMAZ press-service.
Legislative Mess
Meanwhile, the problem of Russian rolling stock quality is not the only one road hauliers face. “However strange it is, one of the most serous problems for our holding company as well as for many international road hauliers is the preference for modern import rolling stock purchase given by the state. The Decree of the Russian Government “On Additional Measures of the State Support for Russian Road Transport Targeted for International Transportation” created conditions for total release from customs dues and taxes on leasing of new import road trains that were placed under the customs temporary import procedure”, complain specialists of Sovtransauto company.
When the Decree was adopted, the Government had the following condition: the vehicles are to be used only for international transportation. All the enterprises of Sovtransauto system as well as most Russian international carriers used the privileges provided by the Decree. After 2003, the rates of road trains meeting Euro-3 and Euro-4 purchase increased two- and even threefold.
“The Decree of the Government was at that time a real support for carriers and allowed them to increase their share on the international market of transport services to 40%”, says A. Tyan. However, all good things have a reverse side. In five or six years of intensive exploitation the vehicles are to be used in derated operation, in particular for transportation inside Russia. Still, there appears another problem: to use the vehicles for domestic transportation, a company must pay the customs cost. Meanwhile, the customs tariff per cent rates are used only until the age of a vehicle is less than 5 years, and then enormous “prohibitive” dues are applied. The latter depends on the engine volume: EUR 2.2 must be paid for every cubic centimeter.
Thus, a proper solution must be found for the vehicles imported according to the scheme in 2003, say road carriers. The paradox is that these trucks may not be discarded until all the procedures of their registration for use inside Russia are completed.
Resume: Manufacture Has a Bright Future
“The companies providing international freight transportation have the highest rates of growth – about 8% annually. Nowadays, their park is about 22-23 thousand freight heavy haulages”, emphasises D. Chumakov. The interest of foreign companies is proved by their plans to organize trucks production is Russia. The list of such companies includes Isuzu, Volvo/Renault, Scania and Iveco. In other words, lorry producers will use the same scheme as car producers, which already manufacture thousands and thousands of cars at their plants in Russia.
By Maria Shevchenko
[~DETAIL_TEXT] => The Main Advantage Is “from Door to Door”
According to the data of the RF Ministry of Transport, in H1 of 2007 the freight motor park of all the sectors of the economy transported 3.1 billion tons of cargo, 1.7% down year-on-year. The throughput increased by 0.7%. On the whole, in 2006 road transport carried 6.8 billion tons of freight, its throughput amounted to 198.9 billion t/km.
During the last 15 years, orders for freight transportation by vehicles grew by over 1,000%, thus the freight road transportation market increased at least ten-fold. Freight transportation by road haulage is the most popular type of cargo transportation in Russia. Taking into account the constant growth of prices for energy carriers, in particular petrol, road hauliers win the competition with their colleagues – railway, air and shipping companies. This fact is supported by the figures mentioned at a meeting of the RF Transport Ministry Board. According to the Ministry’s statistic figures, the share of road transport is over 80% of the total freight transportation volume (excluding pipelines). According to some evaluations, road transport carries over 18 million tons daily, which significantly exceeds freight transportation by railway. “In particular, 1.311 billion tons of cargo was carried along Russian railway network in 2006, and the throughput amounted to 1.948 trillion t/km”, show the results of the research “Russian Market of Freight Road Transportation” held by ABARUS Market Research company in 2006.
Import Attacks
As a consequence of growth in freight transportation by road haulage, the sales of cargo transport develop actively. “The total park of trucks in Russia amounts to about 4.47 million units. Out of them only 5% of vehicles were produced less than two years ago”, says Dmitry Chumakov, CEO of market research agency Vector Market Research. According to its assessments, the rates of freight road transportation growth are about 15-20% during the last two years. “The Russian market of freight vehicles is booming due to the increase of Russian trucks production as well as new ones manufactured abroad. According to the data of a German market company Best Statistik, the sales volume of European freight vehicles grew by 48% in Russia in 2006. The sales volume of new and second-hand cars from Europe amounted to 36.5 thousand trucks”, agrees Olga Krivonogova, marketing and PR manager of Scania-Russia company.
Today the most rapidly growing segment in the structure of commercial vehicles in Russia is heavy lorries with a full mass of 14-40 tons. According to OAO KAMAZ, the group’s sales volume in 2006 grew by 39% year-on-year to 94.5 thousand units. “By October 2007, KAMAZ manufactured 38,000 trucks. The plan for 2007 envisages that the manufacture volume of the basic production is to exceed 50 thousand units. By 2012 the plant will produce 80 thousand trucks”, forecasts Vladimir Samoilov, Director for Information Policy of OAO KAMAZ.
“According to our evaluations, the segment of freight vehicles will continue to grow for several years more in Russia. Preliminary forecasts run that in five years the market volume will increase two-fold”, believes Sergey Ilyinsky, PR manager of Severstal-Auto.
“The share of the CIS truck producers (KAMAZ, Ural, MAZ) is about 57% of the whole volume; the share of second-hand foreign lorries is 37%, and the rest6% is new foreign trucks. And the share of the latter has been constantly growing recently”, notes Denis Sokolov, analyst of the Stock Market Analysis Division of the Analytical Department, investment bank “KIT Finance”. One third of the trucks sold in 2006 are mainline heavy haulages, and the leaders in the segment are foreign companies. Another third is special facilities, and the rest is dumpers, lorries with sides, etc.
Buy Wholesale
It is no surprise that such attractive growth rates became an excuse for foreign road train deliveries to Russia. One of the most scaled-up is the contract of German concern MAN. According to the terms of the contract, it will deliver 200 road trains to Russian road carriers. On the international leasing terms, it is planned to deliver another 800 vehicles in the framework of the second tranche. It is suggested that the lessees will be large Russian carriers: OAO Sovtransauto, Navigator company, D-Trans group of companies, and other members of the International Road Hauliers Association (ASMAP).
Almost all operators on the road transportation market have plans concerning rolling stock renewal. “Before 1991 we used road trains produced by Russian companies on the base of MAZ tractor truck. Meanwhile, already at that time we understood that foreign vehicles are more profitable in spite of their higher price, more efficient and compensate for the expenses much better. In 1973 Sovtransauto concluded a contract with Volvo for delivery of 100 tractor units. In 2008 we are going to lease 300 road trains produced by MAN and Mercedes. Taking into account advance and leasing payments, the company’s enterprises will spend annually about EUR 3 million on park renewal”, says CEO of ZAO Sovtransauto holding company Anatoly Tyan.
The logistics group of companies Armadillo has also adopted a three-year programme of park renewal. “In 2007, 23 new Ford vehicles have been purchased. This is a significant investment, but we understand that reliable modern trucks are required to provide services meeting high standards. Next year we will start to replace medium-tonnage Scania vehicles by Volvo lorries equipped with hydro sides”, tells Director for Operations in Moscow of Armadillo group of companies, Oleg Korobkin.
Purchase Foreign Vehicles
Carriers have several reasons to purchase foreign trucks. “Unfortunately, in Russia, the production of modern competitive mainline road trains to provide international freight transportation hasn’t been developed yet. European rolling stock meets current technical, exploitation and consumer requirements. Foreign producers have significantly increased the mileage from one technical maintenance procedure to another, which reduces expenses on its maintenance. The vehicles have become more reliable, and the mileage without capital repair is over 1 million km”, explains A. Tyan.
The share of Russian vehicles in the park of Armadillo group of companies is now about 20% and it decreases step-by-step. “In a year, the company’s park will consist of only foreign vehicles. It is explained by environment-friendliness, higher comfort for a driver, transparent conditions of guarantee- and after guarantee maintenance. An important drawback of Russian vehicles is their low reliability, fast breakage of junctions and sets, and as a result, much time is spent on idling before their repair”, says O. Korobkin.
In turn, Russian producers do not agree with the statement that their production is not required by the market. “Our company develops new junctions and sets, new models of vehicles and their families. To keep the share of OAO KAMAZ on the Russian market, it is planned to present to the market a new mainline arctic KAMAZ-5480. Moreover, KAMAZ is ready to produce trucks with Euro-3 engines. But nowadays, there is no proper fuel for them in Russia! The legislation for the transfer to Euro-3 fuel production has not been defined yet, and nowadays oil companies are not eager to invest in refinery modernisation. Meanwhile, the fact that KAMAZ and other car-producing plants invest hundreds of millions of dollars, sums up the representative of KAMAZ press-service.
Legislative Mess
Meanwhile, the problem of Russian rolling stock quality is not the only one road hauliers face. “However strange it is, one of the most serous problems for our holding company as well as for many international road hauliers is the preference for modern import rolling stock purchase given by the state. The Decree of the Russian Government “On Additional Measures of the State Support for Russian Road Transport Targeted for International Transportation” created conditions for total release from customs dues and taxes on leasing of new import road trains that were placed under the customs temporary import procedure”, complain specialists of Sovtransauto company.
When the Decree was adopted, the Government had the following condition: the vehicles are to be used only for international transportation. All the enterprises of Sovtransauto system as well as most Russian international carriers used the privileges provided by the Decree. After 2003, the rates of road trains meeting Euro-3 and Euro-4 purchase increased two- and even threefold.
“The Decree of the Government was at that time a real support for carriers and allowed them to increase their share on the international market of transport services to 40%”, says A. Tyan. However, all good things have a reverse side. In five or six years of intensive exploitation the vehicles are to be used in derated operation, in particular for transportation inside Russia. Still, there appears another problem: to use the vehicles for domestic transportation, a company must pay the customs cost. Meanwhile, the customs tariff per cent rates are used only until the age of a vehicle is less than 5 years, and then enormous “prohibitive” dues are applied. The latter depends on the engine volume: EUR 2.2 must be paid for every cubic centimeter.
Thus, a proper solution must be found for the vehicles imported according to the scheme in 2003, say road carriers. The paradox is that these trucks may not be discarded until all the procedures of their registration for use inside Russia are completed.
Resume: Manufacture Has a Bright Future
“The companies providing international freight transportation have the highest rates of growth – about 8% annually. Nowadays, their park is about 22-23 thousand freight heavy haulages”, emphasises D. Chumakov. The interest of foreign companies is proved by their plans to organize trucks production is Russia. The list of such companies includes Isuzu, Volvo/Renault, Scania and Iveco. In other words, lorry producers will use the same scheme as car producers, which already manufacture thousands and thousands of cars at their plants in Russia.
By Maria Shevchenko
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In the first six months of 2007 the growth of trade turnover between Russia and China made 40%. In 2008 experts believe it can double compared with the results of 2006. This significant growth has become the stimulus for development of the basic Russian – Chinese border crossings. Logisticians and importers see certain difficulties in handling cargo at the border crossings that have to do with low carrying capacity, bureaucracy and problems with customs procedures.Array
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[DETAIL_TEXT] => Bottleneck
Dynamics of development observed in the Russian – Chinese trade relations demonstrate stable growth: in 2006 trade turnover between the two countries amounted to USD 29 bln. In H1 2007 the growth achieved 40%. By 2008 the growth of trade turnover between the two countries will amount to USD 60 bln. and by 2010 it will reach USD 80 bln. However, despite the general positive dynamics, market participants see the range of objective factors preventing from further trade relations of two countries development. First of all this has to do with land border crossings to service container block-trains.
Zabailkalsk: container boom
The necessity to expand and develop border crossing between Zabaikalsk (Zabaikalsk railway – OAO RZD affiliate) and Manchuria (Kharbin railway, China) has been discussed for several years. Late 2004 it was planned that until 2007 the Russian side would invest RUR 9 bln. In the end the cost of infrastructure reconstruction was estimated at RUR 13.7 bln. and by mid-2006 ОАО RZD invested RUR 4.4. bln into the project. To provide smooth export and import cargo deliveries Zabaikalsk railway authorities (ZR) plan to lengthen and lay down new tracks of 1430 mm gauge in the break-up yard, in border-customs inspection yard, launch new hump, renew the park of shunting locomotives and introduce more powerful machines, launch transporter cranes, carry out capital repair of all handling areas, enhance staff of the station etc.
Due to container transportation boost logistic infrastructure of Zabaikalsk needs development. Zabaikalsk border crossing services about 60% of the Russian-Chinese trade flow. In Q1 2007 container transportation growth made 232%. According to the data given by Chita office of OAO TransContainer in 2006 the share of container transportation in the aggregate volume of import for Zabailkalsk made 36%, in 2007 – 48%. “In the near future due to delivery term speeding up the growth of container transportation by 35% is expected”, Head of ZR press-office states. At the same time the market players note that ZR handling capacities are now exhausted practically and need urgent development badly. It should be mentioned that this part of duties are to be solved by private operator companies. Thus, OAO TransContainer is reconstructing a container terminal of the station. The project cost is estimated at RUR 700 mln, its carrying capacity will amount to 550 containers per day. At present the terminal handles only 50 units.
Grodekovo: container fall
Together with Zabaikalsk reconstruction the Russian side plans to develop transport infrastructure in Grodekovo (Primorsk region) neighboring Suifenhe station (China). According to the Far Eastern railway (FER) in recent years significant and stable growth of cargo turnover following via railway border crossing Grodekovo – Suifenhe can be observed.
In aggregate cargo turnover between Russia and China export from Russia takes 96% and import – 4%. At the same time, experts of FER note that current handling capacities of border crossing allow to handle about 70 thousand containers per year. However, during 9 months of 2007 the border crossing received only 8 containers and two export units», Igor Melnikov, Head of International Relations Department of FER says. In his words, low container turnover is a consequence of high tariff rate set for transportation to European part of Russia from Grodekovo.
In general in 2000-2005 the investment worth RUR 800 mln was allocated by OAO RZD to develop Grodekovo station and accesses to it. In particular, in 2003 sectors between Ussuriysk, Ussuriysk 2 and Dubininsky stations were electrified; in 2004 three tracks of Ussuriysk 2 station were lengthened so that they could service 71 standard rail cars. Moreover, electrical centralization of switches and signals at Przhevalsk station was implemented as well as track lengthening procedures.
Customs has Own Rules
However, these projects are under construction now that is why operators have to solve customs and other problems arising while cargo transportation on their own. The most frequent problem the operators face is difficulties with cargo customs registration. Operators claim that while registration the cargo customs officials make mistakes causing additional problems. According to Pavel Lagov, CEO of TIS JSC, customs inspection can last several days. «We have to prove actual price of each delivered motor car claimed in the contract. Since China gives no official references this is quite complicated process for us», Cherry Motors JSC says. Such parameter as weight can also become the problem for customs declaration filling out. «Customs duties in Russia are formed on the basis of goods weight not on the basis of its market cost or quantity.
In Europe there is a totally different practice. As a result cargo consignors who are not accustomed to operate by such parameter as weight put these data in quite an approximate way. Thus, when the cargo reaches Russia the difference in claimed and actual weight is the most common problem», Mikhail Kholyavenko, CEO of NYK Logistics, comments. The same situation can be observed with off-clearance load. «Our standards of such cargo registration are different.
Summing Up
Considering everything said above the market participants are sure the mere capacities enhancement of border crossings is not enough to solve the problems. «In order to increase Chinese goods trade flow delivered by railway transport significantly complex development of logistic service is required», Alexander Kolik, Deputy CEO TransCare JSC believes. Other market players share his opinion. «Customs formalities are to be simplified and shortened for those clients who transport cargo via this border crossing regularly and with no breaks», P.Lagov asserts. Now, as a result of all the above-mentioned problems cargo operators seek alternative routes and directions.
by Maria Shevchenko
viewpoint
Pavel Chichagov,
Deputy CEO on Startegic Development OAO TransContainer:
– It can be said that block train passing over border crossing looks like traveling trough the neck of a bottle. As a result we observe queues on the border and cargo flow is stopped. Moreover, additional time is spent on customs formalities. To give an example, to register one container transportation over the border one has to collect signs of about ten officials.
Now this border crossing is under process of modernization. Thus, OAO RZD strengthens the station infrastructure which is overloaded with trains. It happens that while one block train is under customs inspection and other required procedures all the others stand waiting. To sort out this problem the number of tracks are to be enlarged and cargo handling procedure is to be optimized. In its turn, OAO TransContainer invests into capacities expansion of our own terminal in Zabaikalsk station where new load machinery will arrive soon, container carrying capacity will be enhanced and systems of services and control will be modernized.
Alexander Kolik,
Deputy CEO OOO TransCare:
– In the course of economic development of China the regions of relatively cheap labour forces are transferring closer to the North border of the country. As a result transport expenditures connected with export production delivery to the prost are increasing. One more factor that adds cost is poor development of container infrastructure in the Northern provinces of China that is why export cargo containerization takes place immediately in the ports.
Thus, quite complicated logistic objects are to be launched in border territories. To implement projects of this sort OAO RZD, of course, will have to cooperate with logistic operators, Chinese railways, key goods manufactures whose enterprises are located in the north of the country and maybe with the provinces and central authorities of the state.
Irina Chiganashkina,
Technical Director OAO DVTG:
– At present border crossings do not correspond to meet requirements and stop container transportation development. Thus, for example, Chinese representatives made a request to enhance carrying capacities of Zabaikalsk station.
Due to impossibility to transfer cargo via Manchuria – Zabaikalsk border crossing in August, September and October 2006 Chinese side had to announce convention.
Considering the fact that infrastructure does not correspond to cargo volume we have come to conclusion that we can be responsible for delivery terms only under conditions we invest into Zabaikalsk terminal infrastructure. Nevertheless, having no support of OAO RZD we will not be able to develop optimal technology of cargo handling on border crossing and provide services on transportation.
It should be said that current carrying capacity of Zabaikalsk makes 150 cars per month. This is a drop in ocean of container volume following from China to Russia. For example, in 2006 the volume of container transportation on this route amounted to 7 mln TEU and the volume of transit transportation via Russia showed the results of 7.371 TEU which is 0.1% from transit container flow.
[~DETAIL_TEXT] => Bottleneck
Dynamics of development observed in the Russian – Chinese trade relations demonstrate stable growth: in 2006 trade turnover between the two countries amounted to USD 29 bln. In H1 2007 the growth achieved 40%. By 2008 the growth of trade turnover between the two countries will amount to USD 60 bln. and by 2010 it will reach USD 80 bln. However, despite the general positive dynamics, market participants see the range of objective factors preventing from further trade relations of two countries development. First of all this has to do with land border crossings to service container block-trains.
Zabailkalsk: container boom
The necessity to expand and develop border crossing between Zabaikalsk (Zabaikalsk railway – OAO RZD affiliate) and Manchuria (Kharbin railway, China) has been discussed for several years. Late 2004 it was planned that until 2007 the Russian side would invest RUR 9 bln. In the end the cost of infrastructure reconstruction was estimated at RUR 13.7 bln. and by mid-2006 ОАО RZD invested RUR 4.4. bln into the project. To provide smooth export and import cargo deliveries Zabaikalsk railway authorities (ZR) plan to lengthen and lay down new tracks of 1430 mm gauge in the break-up yard, in border-customs inspection yard, launch new hump, renew the park of shunting locomotives and introduce more powerful machines, launch transporter cranes, carry out capital repair of all handling areas, enhance staff of the station etc.
Due to container transportation boost logistic infrastructure of Zabaikalsk needs development. Zabaikalsk border crossing services about 60% of the Russian-Chinese trade flow. In Q1 2007 container transportation growth made 232%. According to the data given by Chita office of OAO TransContainer in 2006 the share of container transportation in the aggregate volume of import for Zabailkalsk made 36%, in 2007 – 48%. “In the near future due to delivery term speeding up the growth of container transportation by 35% is expected”, Head of ZR press-office states. At the same time the market players note that ZR handling capacities are now exhausted practically and need urgent development badly. It should be mentioned that this part of duties are to be solved by private operator companies. Thus, OAO TransContainer is reconstructing a container terminal of the station. The project cost is estimated at RUR 700 mln, its carrying capacity will amount to 550 containers per day. At present the terminal handles only 50 units.
Grodekovo: container fall
Together with Zabaikalsk reconstruction the Russian side plans to develop transport infrastructure in Grodekovo (Primorsk region) neighboring Suifenhe station (China). According to the Far Eastern railway (FER) in recent years significant and stable growth of cargo turnover following via railway border crossing Grodekovo – Suifenhe can be observed.
In aggregate cargo turnover between Russia and China export from Russia takes 96% and import – 4%. At the same time, experts of FER note that current handling capacities of border crossing allow to handle about 70 thousand containers per year. However, during 9 months of 2007 the border crossing received only 8 containers and two export units», Igor Melnikov, Head of International Relations Department of FER says. In his words, low container turnover is a consequence of high tariff rate set for transportation to European part of Russia from Grodekovo.
In general in 2000-2005 the investment worth RUR 800 mln was allocated by OAO RZD to develop Grodekovo station and accesses to it. In particular, in 2003 sectors between Ussuriysk, Ussuriysk 2 and Dubininsky stations were electrified; in 2004 three tracks of Ussuriysk 2 station were lengthened so that they could service 71 standard rail cars. Moreover, electrical centralization of switches and signals at Przhevalsk station was implemented as well as track lengthening procedures.
Customs has Own Rules
However, these projects are under construction now that is why operators have to solve customs and other problems arising while cargo transportation on their own. The most frequent problem the operators face is difficulties with cargo customs registration. Operators claim that while registration the cargo customs officials make mistakes causing additional problems. According to Pavel Lagov, CEO of TIS JSC, customs inspection can last several days. «We have to prove actual price of each delivered motor car claimed in the contract. Since China gives no official references this is quite complicated process for us», Cherry Motors JSC says. Such parameter as weight can also become the problem for customs declaration filling out. «Customs duties in Russia are formed on the basis of goods weight not on the basis of its market cost or quantity.
In Europe there is a totally different practice. As a result cargo consignors who are not accustomed to operate by such parameter as weight put these data in quite an approximate way. Thus, when the cargo reaches Russia the difference in claimed and actual weight is the most common problem», Mikhail Kholyavenko, CEO of NYK Logistics, comments. The same situation can be observed with off-clearance load. «Our standards of such cargo registration are different.
Summing Up
Considering everything said above the market participants are sure the mere capacities enhancement of border crossings is not enough to solve the problems. «In order to increase Chinese goods trade flow delivered by railway transport significantly complex development of logistic service is required», Alexander Kolik, Deputy CEO TransCare JSC believes. Other market players share his opinion. «Customs formalities are to be simplified and shortened for those clients who transport cargo via this border crossing regularly and with no breaks», P.Lagov asserts. Now, as a result of all the above-mentioned problems cargo operators seek alternative routes and directions.
by Maria Shevchenko
viewpoint
Pavel Chichagov,
Deputy CEO on Startegic Development OAO TransContainer:
– It can be said that block train passing over border crossing looks like traveling trough the neck of a bottle. As a result we observe queues on the border and cargo flow is stopped. Moreover, additional time is spent on customs formalities. To give an example, to register one container transportation over the border one has to collect signs of about ten officials.
Now this border crossing is under process of modernization. Thus, OAO RZD strengthens the station infrastructure which is overloaded with trains. It happens that while one block train is under customs inspection and other required procedures all the others stand waiting. To sort out this problem the number of tracks are to be enlarged and cargo handling procedure is to be optimized. In its turn, OAO TransContainer invests into capacities expansion of our own terminal in Zabaikalsk station where new load machinery will arrive soon, container carrying capacity will be enhanced and systems of services and control will be modernized.
Alexander Kolik,
Deputy CEO OOO TransCare:
– In the course of economic development of China the regions of relatively cheap labour forces are transferring closer to the North border of the country. As a result transport expenditures connected with export production delivery to the prost are increasing. One more factor that adds cost is poor development of container infrastructure in the Northern provinces of China that is why export cargo containerization takes place immediately in the ports.
Thus, quite complicated logistic objects are to be launched in border territories. To implement projects of this sort OAO RZD, of course, will have to cooperate with logistic operators, Chinese railways, key goods manufactures whose enterprises are located in the north of the country and maybe with the provinces and central authorities of the state.
Irina Chiganashkina,
Technical Director OAO DVTG:
– At present border crossings do not correspond to meet requirements and stop container transportation development. Thus, for example, Chinese representatives made a request to enhance carrying capacities of Zabaikalsk station.
Due to impossibility to transfer cargo via Manchuria – Zabaikalsk border crossing in August, September and October 2006 Chinese side had to announce convention.
Considering the fact that infrastructure does not correspond to cargo volume we have come to conclusion that we can be responsible for delivery terms only under conditions we invest into Zabaikalsk terminal infrastructure. Nevertheless, having no support of OAO RZD we will not be able to develop optimal technology of cargo handling on border crossing and provide services on transportation.
It should be said that current carrying capacity of Zabaikalsk makes 150 cars per month. This is a drop in ocean of container volume following from China to Russia. For example, in 2006 the volume of container transportation on this route amounted to 7 mln TEU and the volume of transit transportation via Russia showed the results of 7.371 TEU which is 0.1% from transit container flow.
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/019.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />In the first six months of 2007 the growth of trade turnover between Russia and China made 40%. In 2008 experts believe it can double compared with the results of 2006. This significant growth has become the stimulus for development of the basic Russian – Chinese border crossings. Logisticians and importers see certain difficulties in handling cargo at the border crossings that have to do with low carrying capacity, bureaucracy and problems with customs procedures.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/019.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />In the first six months of 2007 the growth of trade turnover between Russia and China made 40%. In 2008 experts believe it can double compared with the results of 2006. This significant growth has become the stimulus for development of the basic Russian – Chinese border crossings. Logisticians and importers see certain difficulties in handling cargo at the border crossings that have to do with low carrying capacity, bureaucracy and problems with customs procedures.
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Dynamics of development observed in the Russian – Chinese trade relations demonstrate stable growth: in 2006 trade turnover between the two countries amounted to USD 29 bln. In H1 2007 the growth achieved 40%. By 2008 the growth of trade turnover between the two countries will amount to USD 60 bln. and by 2010 it will reach USD 80 bln. However, despite the general positive dynamics, market participants see the range of objective factors preventing from further trade relations of two countries development. First of all this has to do with land border crossings to service container block-trains.
Zabailkalsk: container boom
The necessity to expand and develop border crossing between Zabaikalsk (Zabaikalsk railway – OAO RZD affiliate) and Manchuria (Kharbin railway, China) has been discussed for several years. Late 2004 it was planned that until 2007 the Russian side would invest RUR 9 bln. In the end the cost of infrastructure reconstruction was estimated at RUR 13.7 bln. and by mid-2006 ОАО RZD invested RUR 4.4. bln into the project. To provide smooth export and import cargo deliveries Zabaikalsk railway authorities (ZR) plan to lengthen and lay down new tracks of 1430 mm gauge in the break-up yard, in border-customs inspection yard, launch new hump, renew the park of shunting locomotives and introduce more powerful machines, launch transporter cranes, carry out capital repair of all handling areas, enhance staff of the station etc.
Due to container transportation boost logistic infrastructure of Zabaikalsk needs development. Zabaikalsk border crossing services about 60% of the Russian-Chinese trade flow. In Q1 2007 container transportation growth made 232%. According to the data given by Chita office of OAO TransContainer in 2006 the share of container transportation in the aggregate volume of import for Zabailkalsk made 36%, in 2007 – 48%. “In the near future due to delivery term speeding up the growth of container transportation by 35% is expected”, Head of ZR press-office states. At the same time the market players note that ZR handling capacities are now exhausted practically and need urgent development badly. It should be mentioned that this part of duties are to be solved by private operator companies. Thus, OAO TransContainer is reconstructing a container terminal of the station. The project cost is estimated at RUR 700 mln, its carrying capacity will amount to 550 containers per day. At present the terminal handles only 50 units.
Grodekovo: container fall
Together with Zabaikalsk reconstruction the Russian side plans to develop transport infrastructure in Grodekovo (Primorsk region) neighboring Suifenhe station (China). According to the Far Eastern railway (FER) in recent years significant and stable growth of cargo turnover following via railway border crossing Grodekovo – Suifenhe can be observed.
In aggregate cargo turnover between Russia and China export from Russia takes 96% and import – 4%. At the same time, experts of FER note that current handling capacities of border crossing allow to handle about 70 thousand containers per year. However, during 9 months of 2007 the border crossing received only 8 containers and two export units», Igor Melnikov, Head of International Relations Department of FER says. In his words, low container turnover is a consequence of high tariff rate set for transportation to European part of Russia from Grodekovo.
In general in 2000-2005 the investment worth RUR 800 mln was allocated by OAO RZD to develop Grodekovo station and accesses to it. In particular, in 2003 sectors between Ussuriysk, Ussuriysk 2 and Dubininsky stations were electrified; in 2004 three tracks of Ussuriysk 2 station were lengthened so that they could service 71 standard rail cars. Moreover, electrical centralization of switches and signals at Przhevalsk station was implemented as well as track lengthening procedures.
Customs has Own Rules
However, these projects are under construction now that is why operators have to solve customs and other problems arising while cargo transportation on their own. The most frequent problem the operators face is difficulties with cargo customs registration. Operators claim that while registration the cargo customs officials make mistakes causing additional problems. According to Pavel Lagov, CEO of TIS JSC, customs inspection can last several days. «We have to prove actual price of each delivered motor car claimed in the contract. Since China gives no official references this is quite complicated process for us», Cherry Motors JSC says. Such parameter as weight can also become the problem for customs declaration filling out. «Customs duties in Russia are formed on the basis of goods weight not on the basis of its market cost or quantity.
In Europe there is a totally different practice. As a result cargo consignors who are not accustomed to operate by such parameter as weight put these data in quite an approximate way. Thus, when the cargo reaches Russia the difference in claimed and actual weight is the most common problem», Mikhail Kholyavenko, CEO of NYK Logistics, comments. The same situation can be observed with off-clearance load. «Our standards of such cargo registration are different.
Summing Up
Considering everything said above the market participants are sure the mere capacities enhancement of border crossings is not enough to solve the problems. «In order to increase Chinese goods trade flow delivered by railway transport significantly complex development of logistic service is required», Alexander Kolik, Deputy CEO TransCare JSC believes. Other market players share his opinion. «Customs formalities are to be simplified and shortened for those clients who transport cargo via this border crossing regularly and with no breaks», P.Lagov asserts. Now, as a result of all the above-mentioned problems cargo operators seek alternative routes and directions.
by Maria Shevchenko
viewpoint
Pavel Chichagov,
Deputy CEO on Startegic Development OAO TransContainer:
– It can be said that block train passing over border crossing looks like traveling trough the neck of a bottle. As a result we observe queues on the border and cargo flow is stopped. Moreover, additional time is spent on customs formalities. To give an example, to register one container transportation over the border one has to collect signs of about ten officials.
Now this border crossing is under process of modernization. Thus, OAO RZD strengthens the station infrastructure which is overloaded with trains. It happens that while one block train is under customs inspection and other required procedures all the others stand waiting. To sort out this problem the number of tracks are to be enlarged and cargo handling procedure is to be optimized. In its turn, OAO TransContainer invests into capacities expansion of our own terminal in Zabaikalsk station where new load machinery will arrive soon, container carrying capacity will be enhanced and systems of services and control will be modernized.
Alexander Kolik,
Deputy CEO OOO TransCare:
– In the course of economic development of China the regions of relatively cheap labour forces are transferring closer to the North border of the country. As a result transport expenditures connected with export production delivery to the prost are increasing. One more factor that adds cost is poor development of container infrastructure in the Northern provinces of China that is why export cargo containerization takes place immediately in the ports.
Thus, quite complicated logistic objects are to be launched in border territories. To implement projects of this sort OAO RZD, of course, will have to cooperate with logistic operators, Chinese railways, key goods manufactures whose enterprises are located in the north of the country and maybe with the provinces and central authorities of the state.
Irina Chiganashkina,
Technical Director OAO DVTG:
– At present border crossings do not correspond to meet requirements and stop container transportation development. Thus, for example, Chinese representatives made a request to enhance carrying capacities of Zabaikalsk station.
Due to impossibility to transfer cargo via Manchuria – Zabaikalsk border crossing in August, September and October 2006 Chinese side had to announce convention.
Considering the fact that infrastructure does not correspond to cargo volume we have come to conclusion that we can be responsible for delivery terms only under conditions we invest into Zabaikalsk terminal infrastructure. Nevertheless, having no support of OAO RZD we will not be able to develop optimal technology of cargo handling on border crossing and provide services on transportation.
It should be said that current carrying capacity of Zabaikalsk makes 150 cars per month. This is a drop in ocean of container volume following from China to Russia. For example, in 2006 the volume of container transportation on this route amounted to 7 mln TEU and the volume of transit transportation via Russia showed the results of 7.371 TEU which is 0.1% from transit container flow.
[~DETAIL_TEXT] => Bottleneck
Dynamics of development observed in the Russian – Chinese trade relations demonstrate stable growth: in 2006 trade turnover between the two countries amounted to USD 29 bln. In H1 2007 the growth achieved 40%. By 2008 the growth of trade turnover between the two countries will amount to USD 60 bln. and by 2010 it will reach USD 80 bln. However, despite the general positive dynamics, market participants see the range of objective factors preventing from further trade relations of two countries development. First of all this has to do with land border crossings to service container block-trains.
Zabailkalsk: container boom
The necessity to expand and develop border crossing between Zabaikalsk (Zabaikalsk railway – OAO RZD affiliate) and Manchuria (Kharbin railway, China) has been discussed for several years. Late 2004 it was planned that until 2007 the Russian side would invest RUR 9 bln. In the end the cost of infrastructure reconstruction was estimated at RUR 13.7 bln. and by mid-2006 ОАО RZD invested RUR 4.4. bln into the project. To provide smooth export and import cargo deliveries Zabaikalsk railway authorities (ZR) plan to lengthen and lay down new tracks of 1430 mm gauge in the break-up yard, in border-customs inspection yard, launch new hump, renew the park of shunting locomotives and introduce more powerful machines, launch transporter cranes, carry out capital repair of all handling areas, enhance staff of the station etc.
Due to container transportation boost logistic infrastructure of Zabaikalsk needs development. Zabaikalsk border crossing services about 60% of the Russian-Chinese trade flow. In Q1 2007 container transportation growth made 232%. According to the data given by Chita office of OAO TransContainer in 2006 the share of container transportation in the aggregate volume of import for Zabailkalsk made 36%, in 2007 – 48%. “In the near future due to delivery term speeding up the growth of container transportation by 35% is expected”, Head of ZR press-office states. At the same time the market players note that ZR handling capacities are now exhausted practically and need urgent development badly. It should be mentioned that this part of duties are to be solved by private operator companies. Thus, OAO TransContainer is reconstructing a container terminal of the station. The project cost is estimated at RUR 700 mln, its carrying capacity will amount to 550 containers per day. At present the terminal handles only 50 units.
Grodekovo: container fall
Together with Zabaikalsk reconstruction the Russian side plans to develop transport infrastructure in Grodekovo (Primorsk region) neighboring Suifenhe station (China). According to the Far Eastern railway (FER) in recent years significant and stable growth of cargo turnover following via railway border crossing Grodekovo – Suifenhe can be observed.
In aggregate cargo turnover between Russia and China export from Russia takes 96% and import – 4%. At the same time, experts of FER note that current handling capacities of border crossing allow to handle about 70 thousand containers per year. However, during 9 months of 2007 the border crossing received only 8 containers and two export units», Igor Melnikov, Head of International Relations Department of FER says. In his words, low container turnover is a consequence of high tariff rate set for transportation to European part of Russia from Grodekovo.
In general in 2000-2005 the investment worth RUR 800 mln was allocated by OAO RZD to develop Grodekovo station and accesses to it. In particular, in 2003 sectors between Ussuriysk, Ussuriysk 2 and Dubininsky stations were electrified; in 2004 three tracks of Ussuriysk 2 station were lengthened so that they could service 71 standard rail cars. Moreover, electrical centralization of switches and signals at Przhevalsk station was implemented as well as track lengthening procedures.
Customs has Own Rules
However, these projects are under construction now that is why operators have to solve customs and other problems arising while cargo transportation on their own. The most frequent problem the operators face is difficulties with cargo customs registration. Operators claim that while registration the cargo customs officials make mistakes causing additional problems. According to Pavel Lagov, CEO of TIS JSC, customs inspection can last several days. «We have to prove actual price of each delivered motor car claimed in the contract. Since China gives no official references this is quite complicated process for us», Cherry Motors JSC says. Such parameter as weight can also become the problem for customs declaration filling out. «Customs duties in Russia are formed on the basis of goods weight not on the basis of its market cost or quantity.
In Europe there is a totally different practice. As a result cargo consignors who are not accustomed to operate by such parameter as weight put these data in quite an approximate way. Thus, when the cargo reaches Russia the difference in claimed and actual weight is the most common problem», Mikhail Kholyavenko, CEO of NYK Logistics, comments. The same situation can be observed with off-clearance load. «Our standards of such cargo registration are different.
Summing Up
Considering everything said above the market participants are sure the mere capacities enhancement of border crossings is not enough to solve the problems. «In order to increase Chinese goods trade flow delivered by railway transport significantly complex development of logistic service is required», Alexander Kolik, Deputy CEO TransCare JSC believes. Other market players share his opinion. «Customs formalities are to be simplified and shortened for those clients who transport cargo via this border crossing regularly and with no breaks», P.Lagov asserts. Now, as a result of all the above-mentioned problems cargo operators seek alternative routes and directions.
by Maria Shevchenko
viewpoint
Pavel Chichagov,
Deputy CEO on Startegic Development OAO TransContainer:
– It can be said that block train passing over border crossing looks like traveling trough the neck of a bottle. As a result we observe queues on the border and cargo flow is stopped. Moreover, additional time is spent on customs formalities. To give an example, to register one container transportation over the border one has to collect signs of about ten officials.
Now this border crossing is under process of modernization. Thus, OAO RZD strengthens the station infrastructure which is overloaded with trains. It happens that while one block train is under customs inspection and other required procedures all the others stand waiting. To sort out this problem the number of tracks are to be enlarged and cargo handling procedure is to be optimized. In its turn, OAO TransContainer invests into capacities expansion of our own terminal in Zabaikalsk station where new load machinery will arrive soon, container carrying capacity will be enhanced and systems of services and control will be modernized.
Alexander Kolik,
Deputy CEO OOO TransCare:
– In the course of economic development of China the regions of relatively cheap labour forces are transferring closer to the North border of the country. As a result transport expenditures connected with export production delivery to the prost are increasing. One more factor that adds cost is poor development of container infrastructure in the Northern provinces of China that is why export cargo containerization takes place immediately in the ports.
Thus, quite complicated logistic objects are to be launched in border territories. To implement projects of this sort OAO RZD, of course, will have to cooperate with logistic operators, Chinese railways, key goods manufactures whose enterprises are located in the north of the country and maybe with the provinces and central authorities of the state.
Irina Chiganashkina,
Technical Director OAO DVTG:
– At present border crossings do not correspond to meet requirements and stop container transportation development. Thus, for example, Chinese representatives made a request to enhance carrying capacities of Zabaikalsk station.
Due to impossibility to transfer cargo via Manchuria – Zabaikalsk border crossing in August, September and October 2006 Chinese side had to announce convention.
Considering the fact that infrastructure does not correspond to cargo volume we have come to conclusion that we can be responsible for delivery terms only under conditions we invest into Zabaikalsk terminal infrastructure. Nevertheless, having no support of OAO RZD we will not be able to develop optimal technology of cargo handling on border crossing and provide services on transportation.
It should be said that current carrying capacity of Zabaikalsk makes 150 cars per month. This is a drop in ocean of container volume following from China to Russia. For example, in 2006 the volume of container transportation on this route amounted to 7 mln TEU and the volume of transit transportation via Russia showed the results of 7.371 TEU which is 0.1% from transit container flow.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/019.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />In the first six months of 2007 the growth of trade turnover between Russia and China made 40%. In 2008 experts believe it can double compared with the results of 2006. This significant growth has become the stimulus for development of the basic Russian – Chinese border crossings. Logisticians and importers see certain difficulties in handling cargo at the border crossings that have to do with low carrying capacity, bureaucracy and problems with customs procedures.
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[DETAIL_TEXT] => Interesting Project
Several years ago Alexander Slota, performing the functions of Director of Euroterminal in Slavkov, in his interview to The RZD-Partner International emphasized strategic importance of the terminal for Russia. At present this summons is taken seriously: participants of CCTT working group expressed their wishes to expand privileged tariffs to the second direction for cargo transportation along the TransSib via Slavkov terminal. How important is current development of the western border crossings to stimulate transit corridor?
In 2006 the protocol of CCTT session included clear statement that looked as follows: «session participants take container transportation via Slavkov terminal as one of the key directions for TransSiberian transportation development». In words of Marian Bak, CEO of CZH S.A. and principal terminal owner the project advantages cover several areas. First of all, due to 1520 gauge there is no need to transfer rolling stock to European standard at border crossings; secondly, Euroterminal is close to the crossroad of pan-European transport corridors (III corridor East – West and VI corridor North – South). Moreover, Slavkov is located in the business center of Poland. «Thus, new handling complex gives favourable conditions for cargo delivery both to Poland market and trans-European corridors», M.Bak states.
Russian exerts support him as well. In words of Gennady Bessonov, CCTT Secretary General, when reconstruction in Slavkov is completed the terminal can turn into one of the logistic centers for re-directing cargo to European markets. He also noted that this terminal development is a natural evolution stage of competition between Finland and Poland for transit cargo: «Slavkov terminal is Polish initiative and it has certain sense in this situation». In near future investment into the project will amount to EUR 16.6 mln. European Regional Fund of Development performs as one of the investors. In this respect three questions arise: how required are border crossings on the western borders and how they help railway transit transportation development; how competitive is railway transportation compared to what feeder lines of the Baltic region offer and the last but not the least what makes the Europeans invest into handling capacities and discuss the TransSib transportation as a strategic goal?
Sea is Major Competitor
Speaking of sea transportation, according to G.Bessonov, now about 99% of cargo following to Europe from the TransSib is delivered there by sea. There are some reasons for that i.e. developed technology of sea transportation, low tariff rates, high level of services. At the same time railway transportation envisages great number of borders to cross. However, cargo consignor dreams to pay money and forget about any problems. Despite the fact that the terms of delivery increase sea transport can make cargo consignors’ dreams come true. On the other hand, according to CZH land route will be much shorter. «Euroterminal will significantly increase competitiveness of railway transportation from Asia to Europe», M.Bak assures.
In fact, border crossings development in the West is not an urgent need, though it is a factor able to stimulate transportation development. According to Sergey Lazar, Head of Container Transportation of EurosibTerminal JSC, on the western borders of Russia terminals are unable to cope with current container volumes. Neither Brest nor Chop are overloaded. Terminal in Slavkov is one of the many hopes laid on the TransSib container transportation growth. «Actually, this project is quite interesting, but I doubt it can become panacea for the Russian transit. Indeed Slavkov is located in Europe, though it is not the whole Europe. It also requires re-load and motor truck or railway transportation up to the client. For the potential customer it is unclear why can Slavkov be better than Chop», Sergey Lazar concludes.
According to Oleg Urvan, Director of Multimodal Department of STS Logistics JSC, sea transportation is cheaper than railway services. The second advantage is opportunity to load container and carry to the port of destination. The situation with railways looks different: firstly the cargo arrives to the terminal, then it is to be reloaded to the European platform and follow further on along European routes. «Moreover, Saint Petersburg does not have any problems with container delivery to Europe», O.Urvan sums up.
Development of the Russian–European transportation in the form of terminal construction in Slavkov or Ust-Luga handling capacities enhancement is required steps. In the words of O.Urvan, jams on the western border crossings are quite typical for present moment. As soon as a lower tariff set for this or that corridor huge cargo flow is headed there causing queues on the border. As a result, cargo that could be delivered in two-three days stays in the port about 10-15 days waiting for load to railway. «Speaking of our company, we have launched office in Archangelsk and despite the fact that aggregate cost of transportation is higher than that of via Saint-Petersburg the port of Archangelsk is not overloaded and difference in price is compensated by the guarantee the cargo won’t stuck somewhere on the border», O.Urvan says.
How to Help?
In the words of the CCTT Head, nowadays transit flows on the TransSib are restricted by the following factors: complicated customs procedures, technical problems on the border crossings, problems with tariffs and infrastructure limits typical for railway.
However, in the opinion of Sergey Lazar, the major reason has nothing to do with high tariff rates. «Maybe they are high for car dispatches, though special rates set for block-trains both via Russia and Belarus allow to offer clients competitive terms from Nakhodka-Vostochny or Zabaikalsk to Brest. That is why today it would be much better to concentrate efforts on creation required infrastructure in the Far East to create suitable conditions for formation and dispatch of block-trains. First of all, I’m speaking about container terminals, Sergey Lazar says. – Here we need coordinated work of all market participants i.e. Russian railways, TransContainer, private operators and the state».
In fact, the principal, though potential advantage of the TransSib is high term of cargo delivery compared with the one shipping lines offer. Now this advantage can not be implemented due to undeveloped border crossings and complicated customs procedures. «The transit way itself does not take long. However, as it is known, problems arise due to customs or queues in Zabaikalsk», Konstantin Uvarov, CEO of Maxilog JSC states. In his words, when cargo transportation was organized via the TransSib his company had to handle clients’ complaints on broken terms several times.
Summing Up
The fact that the western borders have no particular problems with cargo handling is a natural consequence of competition development between terminals. Thus, in due time Slavkov project cancelled the analogous idea promoted by the Czech government; growing container turnover in the Baltic region and handling capacities development in Finland makes Ust-Luga construct their terminal as fast as possible and develop capacities of the port of Saint Petersburg. All these are advantages of a competition market.
The major question lies in another area. Why are European funds ready to invest heavily into border railway terminals and handle this as the TransSib development but not just import-export transportation? Why does Deutsche Bahn announce their plan to develop transportation between Northern Chinese terminals and Europe? Maybe, European experts see perspectives of the line in particular, considering China’s plans to develop industrial capacities in the North of the country. Thus, it is likely we are discussing not just previous volumes flowing back but real transit.
by anna nezhinskaya
[~DETAIL_TEXT] => Interesting Project
Several years ago Alexander Slota, performing the functions of Director of Euroterminal in Slavkov, in his interview to The RZD-Partner International emphasized strategic importance of the terminal for Russia. At present this summons is taken seriously: participants of CCTT working group expressed their wishes to expand privileged tariffs to the second direction for cargo transportation along the TransSib via Slavkov terminal. How important is current development of the western border crossings to stimulate transit corridor?
In 2006 the protocol of CCTT session included clear statement that looked as follows: «session participants take container transportation via Slavkov terminal as one of the key directions for TransSiberian transportation development». In words of Marian Bak, CEO of CZH S.A. and principal terminal owner the project advantages cover several areas. First of all, due to 1520 gauge there is no need to transfer rolling stock to European standard at border crossings; secondly, Euroterminal is close to the crossroad of pan-European transport corridors (III corridor East – West and VI corridor North – South). Moreover, Slavkov is located in the business center of Poland. «Thus, new handling complex gives favourable conditions for cargo delivery both to Poland market and trans-European corridors», M.Bak states.
Russian exerts support him as well. In words of Gennady Bessonov, CCTT Secretary General, when reconstruction in Slavkov is completed the terminal can turn into one of the logistic centers for re-directing cargo to European markets. He also noted that this terminal development is a natural evolution stage of competition between Finland and Poland for transit cargo: «Slavkov terminal is Polish initiative and it has certain sense in this situation». In near future investment into the project will amount to EUR 16.6 mln. European Regional Fund of Development performs as one of the investors. In this respect three questions arise: how required are border crossings on the western borders and how they help railway transit transportation development; how competitive is railway transportation compared to what feeder lines of the Baltic region offer and the last but not the least what makes the Europeans invest into handling capacities and discuss the TransSib transportation as a strategic goal?
Sea is Major Competitor
Speaking of sea transportation, according to G.Bessonov, now about 99% of cargo following to Europe from the TransSib is delivered there by sea. There are some reasons for that i.e. developed technology of sea transportation, low tariff rates, high level of services. At the same time railway transportation envisages great number of borders to cross. However, cargo consignor dreams to pay money and forget about any problems. Despite the fact that the terms of delivery increase sea transport can make cargo consignors’ dreams come true. On the other hand, according to CZH land route will be much shorter. «Euroterminal will significantly increase competitiveness of railway transportation from Asia to Europe», M.Bak assures.
In fact, border crossings development in the West is not an urgent need, though it is a factor able to stimulate transportation development. According to Sergey Lazar, Head of Container Transportation of EurosibTerminal JSC, on the western borders of Russia terminals are unable to cope with current container volumes. Neither Brest nor Chop are overloaded. Terminal in Slavkov is one of the many hopes laid on the TransSib container transportation growth. «Actually, this project is quite interesting, but I doubt it can become panacea for the Russian transit. Indeed Slavkov is located in Europe, though it is not the whole Europe. It also requires re-load and motor truck or railway transportation up to the client. For the potential customer it is unclear why can Slavkov be better than Chop», Sergey Lazar concludes.
According to Oleg Urvan, Director of Multimodal Department of STS Logistics JSC, sea transportation is cheaper than railway services. The second advantage is opportunity to load container and carry to the port of destination. The situation with railways looks different: firstly the cargo arrives to the terminal, then it is to be reloaded to the European platform and follow further on along European routes. «Moreover, Saint Petersburg does not have any problems with container delivery to Europe», O.Urvan sums up.
Development of the Russian–European transportation in the form of terminal construction in Slavkov or Ust-Luga handling capacities enhancement is required steps. In the words of O.Urvan, jams on the western border crossings are quite typical for present moment. As soon as a lower tariff set for this or that corridor huge cargo flow is headed there causing queues on the border. As a result, cargo that could be delivered in two-three days stays in the port about 10-15 days waiting for load to railway. «Speaking of our company, we have launched office in Archangelsk and despite the fact that aggregate cost of transportation is higher than that of via Saint-Petersburg the port of Archangelsk is not overloaded and difference in price is compensated by the guarantee the cargo won’t stuck somewhere on the border», O.Urvan says.
How to Help?
In the words of the CCTT Head, nowadays transit flows on the TransSib are restricted by the following factors: complicated customs procedures, technical problems on the border crossings, problems with tariffs and infrastructure limits typical for railway.
However, in the opinion of Sergey Lazar, the major reason has nothing to do with high tariff rates. «Maybe they are high for car dispatches, though special rates set for block-trains both via Russia and Belarus allow to offer clients competitive terms from Nakhodka-Vostochny or Zabaikalsk to Brest. That is why today it would be much better to concentrate efforts on creation required infrastructure in the Far East to create suitable conditions for formation and dispatch of block-trains. First of all, I’m speaking about container terminals, Sergey Lazar says. – Here we need coordinated work of all market participants i.e. Russian railways, TransContainer, private operators and the state».
In fact, the principal, though potential advantage of the TransSib is high term of cargo delivery compared with the one shipping lines offer. Now this advantage can not be implemented due to undeveloped border crossings and complicated customs procedures. «The transit way itself does not take long. However, as it is known, problems arise due to customs or queues in Zabaikalsk», Konstantin Uvarov, CEO of Maxilog JSC states. In his words, when cargo transportation was organized via the TransSib his company had to handle clients’ complaints on broken terms several times.
Summing Up
The fact that the western borders have no particular problems with cargo handling is a natural consequence of competition development between terminals. Thus, in due time Slavkov project cancelled the analogous idea promoted by the Czech government; growing container turnover in the Baltic region and handling capacities development in Finland makes Ust-Luga construct their terminal as fast as possible and develop capacities of the port of Saint Petersburg. All these are advantages of a competition market.
The major question lies in another area. Why are European funds ready to invest heavily into border railway terminals and handle this as the TransSib development but not just import-export transportation? Why does Deutsche Bahn announce their plan to develop transportation between Northern Chinese terminals and Europe? Maybe, European experts see perspectives of the line in particular, considering China’s plans to develop industrial capacities in the North of the country. Thus, it is likely we are discussing not just previous volumes flowing back but real transit.
by anna nezhinskaya
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to attract long awaited transit?
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to attract long awaited transit?
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[DETAIL_TEXT] => Interesting Project
Several years ago Alexander Slota, performing the functions of Director of Euroterminal in Slavkov, in his interview to The RZD-Partner International emphasized strategic importance of the terminal for Russia. At present this summons is taken seriously: participants of CCTT working group expressed their wishes to expand privileged tariffs to the second direction for cargo transportation along the TransSib via Slavkov terminal. How important is current development of the western border crossings to stimulate transit corridor?
In 2006 the protocol of CCTT session included clear statement that looked as follows: «session participants take container transportation via Slavkov terminal as one of the key directions for TransSiberian transportation development». In words of Marian Bak, CEO of CZH S.A. and principal terminal owner the project advantages cover several areas. First of all, due to 1520 gauge there is no need to transfer rolling stock to European standard at border crossings; secondly, Euroterminal is close to the crossroad of pan-European transport corridors (III corridor East – West and VI corridor North – South). Moreover, Slavkov is located in the business center of Poland. «Thus, new handling complex gives favourable conditions for cargo delivery both to Poland market and trans-European corridors», M.Bak states.
Russian exerts support him as well. In words of Gennady Bessonov, CCTT Secretary General, when reconstruction in Slavkov is completed the terminal can turn into one of the logistic centers for re-directing cargo to European markets. He also noted that this terminal development is a natural evolution stage of competition between Finland and Poland for transit cargo: «Slavkov terminal is Polish initiative and it has certain sense in this situation». In near future investment into the project will amount to EUR 16.6 mln. European Regional Fund of Development performs as one of the investors. In this respect three questions arise: how required are border crossings on the western borders and how they help railway transit transportation development; how competitive is railway transportation compared to what feeder lines of the Baltic region offer and the last but not the least what makes the Europeans invest into handling capacities and discuss the TransSib transportation as a strategic goal?
Sea is Major Competitor
Speaking of sea transportation, according to G.Bessonov, now about 99% of cargo following to Europe from the TransSib is delivered there by sea. There are some reasons for that i.e. developed technology of sea transportation, low tariff rates, high level of services. At the same time railway transportation envisages great number of borders to cross. However, cargo consignor dreams to pay money and forget about any problems. Despite the fact that the terms of delivery increase sea transport can make cargo consignors’ dreams come true. On the other hand, according to CZH land route will be much shorter. «Euroterminal will significantly increase competitiveness of railway transportation from Asia to Europe», M.Bak assures.
In fact, border crossings development in the West is not an urgent need, though it is a factor able to stimulate transportation development. According to Sergey Lazar, Head of Container Transportation of EurosibTerminal JSC, on the western borders of Russia terminals are unable to cope with current container volumes. Neither Brest nor Chop are overloaded. Terminal in Slavkov is one of the many hopes laid on the TransSib container transportation growth. «Actually, this project is quite interesting, but I doubt it can become panacea for the Russian transit. Indeed Slavkov is located in Europe, though it is not the whole Europe. It also requires re-load and motor truck or railway transportation up to the client. For the potential customer it is unclear why can Slavkov be better than Chop», Sergey Lazar concludes.
According to Oleg Urvan, Director of Multimodal Department of STS Logistics JSC, sea transportation is cheaper than railway services. The second advantage is opportunity to load container and carry to the port of destination. The situation with railways looks different: firstly the cargo arrives to the terminal, then it is to be reloaded to the European platform and follow further on along European routes. «Moreover, Saint Petersburg does not have any problems with container delivery to Europe», O.Urvan sums up.
Development of the Russian–European transportation in the form of terminal construction in Slavkov or Ust-Luga handling capacities enhancement is required steps. In the words of O.Urvan, jams on the western border crossings are quite typical for present moment. As soon as a lower tariff set for this or that corridor huge cargo flow is headed there causing queues on the border. As a result, cargo that could be delivered in two-three days stays in the port about 10-15 days waiting for load to railway. «Speaking of our company, we have launched office in Archangelsk and despite the fact that aggregate cost of transportation is higher than that of via Saint-Petersburg the port of Archangelsk is not overloaded and difference in price is compensated by the guarantee the cargo won’t stuck somewhere on the border», O.Urvan says.
How to Help?
In the words of the CCTT Head, nowadays transit flows on the TransSib are restricted by the following factors: complicated customs procedures, technical problems on the border crossings, problems with tariffs and infrastructure limits typical for railway.
However, in the opinion of Sergey Lazar, the major reason has nothing to do with high tariff rates. «Maybe they are high for car dispatches, though special rates set for block-trains both via Russia and Belarus allow to offer clients competitive terms from Nakhodka-Vostochny or Zabaikalsk to Brest. That is why today it would be much better to concentrate efforts on creation required infrastructure in the Far East to create suitable conditions for formation and dispatch of block-trains. First of all, I’m speaking about container terminals, Sergey Lazar says. – Here we need coordinated work of all market participants i.e. Russian railways, TransContainer, private operators and the state».
In fact, the principal, though potential advantage of the TransSib is high term of cargo delivery compared with the one shipping lines offer. Now this advantage can not be implemented due to undeveloped border crossings and complicated customs procedures. «The transit way itself does not take long. However, as it is known, problems arise due to customs or queues in Zabaikalsk», Konstantin Uvarov, CEO of Maxilog JSC states. In his words, when cargo transportation was organized via the TransSib his company had to handle clients’ complaints on broken terms several times.
Summing Up
The fact that the western borders have no particular problems with cargo handling is a natural consequence of competition development between terminals. Thus, in due time Slavkov project cancelled the analogous idea promoted by the Czech government; growing container turnover in the Baltic region and handling capacities development in Finland makes Ust-Luga construct their terminal as fast as possible and develop capacities of the port of Saint Petersburg. All these are advantages of a competition market.
The major question lies in another area. Why are European funds ready to invest heavily into border railway terminals and handle this as the TransSib development but not just import-export transportation? Why does Deutsche Bahn announce their plan to develop transportation between Northern Chinese terminals and Europe? Maybe, European experts see perspectives of the line in particular, considering China’s plans to develop industrial capacities in the North of the country. Thus, it is likely we are discussing not just previous volumes flowing back but real transit.
by anna nezhinskaya
[~DETAIL_TEXT] => Interesting Project
Several years ago Alexander Slota, performing the functions of Director of Euroterminal in Slavkov, in his interview to The RZD-Partner International emphasized strategic importance of the terminal for Russia. At present this summons is taken seriously: participants of CCTT working group expressed their wishes to expand privileged tariffs to the second direction for cargo transportation along the TransSib via Slavkov terminal. How important is current development of the western border crossings to stimulate transit corridor?
In 2006 the protocol of CCTT session included clear statement that looked as follows: «session participants take container transportation via Slavkov terminal as one of the key directions for TransSiberian transportation development». In words of Marian Bak, CEO of CZH S.A. and principal terminal owner the project advantages cover several areas. First of all, due to 1520 gauge there is no need to transfer rolling stock to European standard at border crossings; secondly, Euroterminal is close to the crossroad of pan-European transport corridors (III corridor East – West and VI corridor North – South). Moreover, Slavkov is located in the business center of Poland. «Thus, new handling complex gives favourable conditions for cargo delivery both to Poland market and trans-European corridors», M.Bak states.
Russian exerts support him as well. In words of Gennady Bessonov, CCTT Secretary General, when reconstruction in Slavkov is completed the terminal can turn into one of the logistic centers for re-directing cargo to European markets. He also noted that this terminal development is a natural evolution stage of competition between Finland and Poland for transit cargo: «Slavkov terminal is Polish initiative and it has certain sense in this situation». In near future investment into the project will amount to EUR 16.6 mln. European Regional Fund of Development performs as one of the investors. In this respect three questions arise: how required are border crossings on the western borders and how they help railway transit transportation development; how competitive is railway transportation compared to what feeder lines of the Baltic region offer and the last but not the least what makes the Europeans invest into handling capacities and discuss the TransSib transportation as a strategic goal?
Sea is Major Competitor
Speaking of sea transportation, according to G.Bessonov, now about 99% of cargo following to Europe from the TransSib is delivered there by sea. There are some reasons for that i.e. developed technology of sea transportation, low tariff rates, high level of services. At the same time railway transportation envisages great number of borders to cross. However, cargo consignor dreams to pay money and forget about any problems. Despite the fact that the terms of delivery increase sea transport can make cargo consignors’ dreams come true. On the other hand, according to CZH land route will be much shorter. «Euroterminal will significantly increase competitiveness of railway transportation from Asia to Europe», M.Bak assures.
In fact, border crossings development in the West is not an urgent need, though it is a factor able to stimulate transportation development. According to Sergey Lazar, Head of Container Transportation of EurosibTerminal JSC, on the western borders of Russia terminals are unable to cope with current container volumes. Neither Brest nor Chop are overloaded. Terminal in Slavkov is one of the many hopes laid on the TransSib container transportation growth. «Actually, this project is quite interesting, but I doubt it can become panacea for the Russian transit. Indeed Slavkov is located in Europe, though it is not the whole Europe. It also requires re-load and motor truck or railway transportation up to the client. For the potential customer it is unclear why can Slavkov be better than Chop», Sergey Lazar concludes.
According to Oleg Urvan, Director of Multimodal Department of STS Logistics JSC, sea transportation is cheaper than railway services. The second advantage is opportunity to load container and carry to the port of destination. The situation with railways looks different: firstly the cargo arrives to the terminal, then it is to be reloaded to the European platform and follow further on along European routes. «Moreover, Saint Petersburg does not have any problems with container delivery to Europe», O.Urvan sums up.
Development of the Russian–European transportation in the form of terminal construction in Slavkov or Ust-Luga handling capacities enhancement is required steps. In the words of O.Urvan, jams on the western border crossings are quite typical for present moment. As soon as a lower tariff set for this or that corridor huge cargo flow is headed there causing queues on the border. As a result, cargo that could be delivered in two-three days stays in the port about 10-15 days waiting for load to railway. «Speaking of our company, we have launched office in Archangelsk and despite the fact that aggregate cost of transportation is higher than that of via Saint-Petersburg the port of Archangelsk is not overloaded and difference in price is compensated by the guarantee the cargo won’t stuck somewhere on the border», O.Urvan says.
How to Help?
In the words of the CCTT Head, nowadays transit flows on the TransSib are restricted by the following factors: complicated customs procedures, technical problems on the border crossings, problems with tariffs and infrastructure limits typical for railway.
However, in the opinion of Sergey Lazar, the major reason has nothing to do with high tariff rates. «Maybe they are high for car dispatches, though special rates set for block-trains both via Russia and Belarus allow to offer clients competitive terms from Nakhodka-Vostochny or Zabaikalsk to Brest. That is why today it would be much better to concentrate efforts on creation required infrastructure in the Far East to create suitable conditions for formation and dispatch of block-trains. First of all, I’m speaking about container terminals, Sergey Lazar says. – Here we need coordinated work of all market participants i.e. Russian railways, TransContainer, private operators and the state».
In fact, the principal, though potential advantage of the TransSib is high term of cargo delivery compared with the one shipping lines offer. Now this advantage can not be implemented due to undeveloped border crossings and complicated customs procedures. «The transit way itself does not take long. However, as it is known, problems arise due to customs or queues in Zabaikalsk», Konstantin Uvarov, CEO of Maxilog JSC states. In his words, when cargo transportation was organized via the TransSib his company had to handle clients’ complaints on broken terms several times.
Summing Up
The fact that the western borders have no particular problems with cargo handling is a natural consequence of competition development between terminals. Thus, in due time Slavkov project cancelled the analogous idea promoted by the Czech government; growing container turnover in the Baltic region and handling capacities development in Finland makes Ust-Luga construct their terminal as fast as possible and develop capacities of the port of Saint Petersburg. All these are advantages of a competition market.
The major question lies in another area. Why are European funds ready to invest heavily into border railway terminals and handle this as the TransSib development but not just import-export transportation? Why does Deutsche Bahn announce their plan to develop transportation between Northern Chinese terminals and Europe? Maybe, European experts see perspectives of the line in particular, considering China’s plans to develop industrial capacities in the North of the country. Thus, it is likely we are discussing not just previous volumes flowing back but real transit.
by anna nezhinskaya
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to attract long awaited transit?
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In spite of the “cooling down” of political relations between Russia and the EU, obviously, the latter will hardly suffer from the lack of energy. It is confirmed by Russian oil and gas companies’ plans to increase the capacities to export hydrocarbons via the RF North-Western region – the enlargement of the Baltic Pipeline System (the BPS) capacity to 110 mln tons of oil annually.Array
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[DETAIL_TEXT] => BPS: Volumes to Grow Twofold
The first stage of Transneft company’s Baltic Pipeline System (BPS) on the line Palkino – Primorsk was launched in 2001 with carrying capacity of 14.2 mln tons of oil. Nowadays the carrying capacity of the BPS exceeds 74 mln tons of crude oil per annum.
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The January events (bargaining with the Government of the Republic of Belarus on the increase of price for oil and gas for Byelorussian consumers and the increase of transit dues in response) made the RF Government look for oil transportation capacities alternative to Druzhba oil pipeline. In its turn, Byelorussia started to launch oil and gas extraction on the territory of Iran. The Ministry of Fuel and Energy and Transneft to prepare all the necessary documentation to launch the construction of the second stage of the BPS. The new 1,000 km long oil pipeline will run along the border with Byelorussia from the Unecha station (Bryansk region) to the port of Primorsk. The capacity of the line at the first stage is to amount to 50 mln tons per annum, and later it is to increase to 75 mln tons. The cost of BPS2 construction is estimated at USD 2-2.5 bln.
However, calculating the profitability of transportation along the Druzhba pipeline and the new dues, oil delivery via Byelorussia will cost over USD 5.5 bln, which exceeds the expenses on the BPS2 construction. It should be considered that the increasing demand for energy carriers in the EU will load both – the oil Druzhba and the new BPS. “In the near future, the basic volume of Russian oil will be exported to the West via the Baltic Sea”, highlighted the Head of Transneft company in his speech.
Lukoil – OAO RZD: United by One Target
For two years Lukoil has been using the BPS instead of its oil terminal in Vysotsk. Now the capacity of the terminal is 15 mln tons annually. By the end of this year the volume will amount to 12 mln tons. The total capacity of the terminal’s tank field amounts to 460 thousand cub. m of oil products. The rates on crude oil transportation by pipeline are much more profitable, and the capacity of the BPS is enough to carry all the necessary volume. Vice President of Transneft Sergey Grigoryev believes that this scheme will be more profitable for Lukoil than dispatches by railway, taking into account that the tariffs of OAO RZD are several times higher. In his words, transportation by the Baltic Pipeline System saves about USD 2 per barrel.
At the same time, the distributing and handling complex Vysotsk continues to enlarge its capacities. Representatives of OAO Lukoil-Trans said that the company succeeded in establishing a partnership with the October railway. Due to the proper logistics and OAO RZD top-management’s attention to the company’s problems no train with the company’s freight has been left behind since the launch of the distributing and handling complex Vysotsk. In 2007, OAO RZD concluded with OAO Lukoil an additional agreement on development of railway approaches to the terminal in Vysotsk. “We highly appreciate our cooperation with OAO RZD that makes for the most efficient exploitation of the object”, highlighted President of OAO Lukoil Vagit Alekperov. OAO RZD is less optimistic about its cooperation with Lukoil. Oleg Valinsky, Deputy Head of Transportation of the October railway, believes that the soft weather conditions of the last winter made for the recent growth of transportation via the distributing and handling complex Vysotsk.
The plans of OAO Lukoil to increase oil products transportation via the Baltic Sea may be broken because of the reconstruction of Saint Petersburg – Vyborg line for speeded up railway transportation. Nowadays trains carrying oil products and passenger trains run along one and the same mainline. The planned in 2004 construction of the so-called Sosnovsky line, and the connecting line Losevo - Kamennogorsk with the length of 52 km and a further outlet to Vysotsk has not been fulfilled yet. In fact, it is just at a preconstruction stage.
It should be mentioned that by 2020, the freight flow to Finland and the ports of Vysotsk and Vyborg will increase to 50 mln tons annually or 50 train pairs daily.
Alexey Lebedev
[~DETAIL_TEXT] => BPS: Volumes to Grow Twofold
The first stage of Transneft company’s Baltic Pipeline System (BPS) on the line Palkino – Primorsk was launched in 2001 with carrying capacity of 14.2 mln tons of oil. Nowadays the carrying capacity of the BPS exceeds 74 mln tons of crude oil per annum.
The final link of the Baltic Pipeline System is the specialized commercial sea port of Primorsk, oil and products export leader in the Russian North-Western region. There are four berths in the port. The depth at the moorage wall is up to 18.2 m. The port is able to service 150 thousand tons dwt tankers. In future, according to Vice Governor of the Leningrad region Grigory Dvas, 200 thousand tons dwt tankers with small draft may be serviced there.
The January events (bargaining with the Government of the Republic of Belarus on the increase of price for oil and gas for Byelorussian consumers and the increase of transit dues in response) made the RF Government look for oil transportation capacities alternative to Druzhba oil pipeline. In its turn, Byelorussia started to launch oil and gas extraction on the territory of Iran. The Ministry of Fuel and Energy and Transneft to prepare all the necessary documentation to launch the construction of the second stage of the BPS. The new 1,000 km long oil pipeline will run along the border with Byelorussia from the Unecha station (Bryansk region) to the port of Primorsk. The capacity of the line at the first stage is to amount to 50 mln tons per annum, and later it is to increase to 75 mln tons. The cost of BPS2 construction is estimated at USD 2-2.5 bln.
However, calculating the profitability of transportation along the Druzhba pipeline and the new dues, oil delivery via Byelorussia will cost over USD 5.5 bln, which exceeds the expenses on the BPS2 construction. It should be considered that the increasing demand for energy carriers in the EU will load both – the oil Druzhba and the new BPS. “In the near future, the basic volume of Russian oil will be exported to the West via the Baltic Sea”, highlighted the Head of Transneft company in his speech.
Lukoil – OAO RZD: United by One Target
For two years Lukoil has been using the BPS instead of its oil terminal in Vysotsk. Now the capacity of the terminal is 15 mln tons annually. By the end of this year the volume will amount to 12 mln tons. The total capacity of the terminal’s tank field amounts to 460 thousand cub. m of oil products. The rates on crude oil transportation by pipeline are much more profitable, and the capacity of the BPS is enough to carry all the necessary volume. Vice President of Transneft Sergey Grigoryev believes that this scheme will be more profitable for Lukoil than dispatches by railway, taking into account that the tariffs of OAO RZD are several times higher. In his words, transportation by the Baltic Pipeline System saves about USD 2 per barrel.
At the same time, the distributing and handling complex Vysotsk continues to enlarge its capacities. Representatives of OAO Lukoil-Trans said that the company succeeded in establishing a partnership with the October railway. Due to the proper logistics and OAO RZD top-management’s attention to the company’s problems no train with the company’s freight has been left behind since the launch of the distributing and handling complex Vysotsk. In 2007, OAO RZD concluded with OAO Lukoil an additional agreement on development of railway approaches to the terminal in Vysotsk. “We highly appreciate our cooperation with OAO RZD that makes for the most efficient exploitation of the object”, highlighted President of OAO Lukoil Vagit Alekperov. OAO RZD is less optimistic about its cooperation with Lukoil. Oleg Valinsky, Deputy Head of Transportation of the October railway, believes that the soft weather conditions of the last winter made for the recent growth of transportation via the distributing and handling complex Vysotsk.
The plans of OAO Lukoil to increase oil products transportation via the Baltic Sea may be broken because of the reconstruction of Saint Petersburg – Vyborg line for speeded up railway transportation. Nowadays trains carrying oil products and passenger trains run along one and the same mainline. The planned in 2004 construction of the so-called Sosnovsky line, and the connecting line Losevo - Kamennogorsk with the length of 52 km and a further outlet to Vysotsk has not been fulfilled yet. In fact, it is just at a preconstruction stage.
It should be mentioned that by 2020, the freight flow to Finland and the ports of Vysotsk and Vyborg will increase to 50 mln tons annually or 50 train pairs daily.
Alexey Lebedev
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[DETAIL_TEXT] => BPS: Volumes to Grow Twofold
The first stage of Transneft company’s Baltic Pipeline System (BPS) on the line Palkino – Primorsk was launched in 2001 with carrying capacity of 14.2 mln tons of oil. Nowadays the carrying capacity of the BPS exceeds 74 mln tons of crude oil per annum.
The final link of the Baltic Pipeline System is the specialized commercial sea port of Primorsk, oil and products export leader in the Russian North-Western region. There are four berths in the port. The depth at the moorage wall is up to 18.2 m. The port is able to service 150 thousand tons dwt tankers. In future, according to Vice Governor of the Leningrad region Grigory Dvas, 200 thousand tons dwt tankers with small draft may be serviced there.
The January events (bargaining with the Government of the Republic of Belarus on the increase of price for oil and gas for Byelorussian consumers and the increase of transit dues in response) made the RF Government look for oil transportation capacities alternative to Druzhba oil pipeline. In its turn, Byelorussia started to launch oil and gas extraction on the territory of Iran. The Ministry of Fuel and Energy and Transneft to prepare all the necessary documentation to launch the construction of the second stage of the BPS. The new 1,000 km long oil pipeline will run along the border with Byelorussia from the Unecha station (Bryansk region) to the port of Primorsk. The capacity of the line at the first stage is to amount to 50 mln tons per annum, and later it is to increase to 75 mln tons. The cost of BPS2 construction is estimated at USD 2-2.5 bln.
However, calculating the profitability of transportation along the Druzhba pipeline and the new dues, oil delivery via Byelorussia will cost over USD 5.5 bln, which exceeds the expenses on the BPS2 construction. It should be considered that the increasing demand for energy carriers in the EU will load both – the oil Druzhba and the new BPS. “In the near future, the basic volume of Russian oil will be exported to the West via the Baltic Sea”, highlighted the Head of Transneft company in his speech.
Lukoil – OAO RZD: United by One Target
For two years Lukoil has been using the BPS instead of its oil terminal in Vysotsk. Now the capacity of the terminal is 15 mln tons annually. By the end of this year the volume will amount to 12 mln tons. The total capacity of the terminal’s tank field amounts to 460 thousand cub. m of oil products. The rates on crude oil transportation by pipeline are much more profitable, and the capacity of the BPS is enough to carry all the necessary volume. Vice President of Transneft Sergey Grigoryev believes that this scheme will be more profitable for Lukoil than dispatches by railway, taking into account that the tariffs of OAO RZD are several times higher. In his words, transportation by the Baltic Pipeline System saves about USD 2 per barrel.
At the same time, the distributing and handling complex Vysotsk continues to enlarge its capacities. Representatives of OAO Lukoil-Trans said that the company succeeded in establishing a partnership with the October railway. Due to the proper logistics and OAO RZD top-management’s attention to the company’s problems no train with the company’s freight has been left behind since the launch of the distributing and handling complex Vysotsk. In 2007, OAO RZD concluded with OAO Lukoil an additional agreement on development of railway approaches to the terminal in Vysotsk. “We highly appreciate our cooperation with OAO RZD that makes for the most efficient exploitation of the object”, highlighted President of OAO Lukoil Vagit Alekperov. OAO RZD is less optimistic about its cooperation with Lukoil. Oleg Valinsky, Deputy Head of Transportation of the October railway, believes that the soft weather conditions of the last winter made for the recent growth of transportation via the distributing and handling complex Vysotsk.
The plans of OAO Lukoil to increase oil products transportation via the Baltic Sea may be broken because of the reconstruction of Saint Petersburg – Vyborg line for speeded up railway transportation. Nowadays trains carrying oil products and passenger trains run along one and the same mainline. The planned in 2004 construction of the so-called Sosnovsky line, and the connecting line Losevo - Kamennogorsk with the length of 52 km and a further outlet to Vysotsk has not been fulfilled yet. In fact, it is just at a preconstruction stage.
It should be mentioned that by 2020, the freight flow to Finland and the ports of Vysotsk and Vyborg will increase to 50 mln tons annually or 50 train pairs daily.
Alexey Lebedev
[~DETAIL_TEXT] => BPS: Volumes to Grow Twofold
The first stage of Transneft company’s Baltic Pipeline System (BPS) on the line Palkino – Primorsk was launched in 2001 with carrying capacity of 14.2 mln tons of oil. Nowadays the carrying capacity of the BPS exceeds 74 mln tons of crude oil per annum.
The final link of the Baltic Pipeline System is the specialized commercial sea port of Primorsk, oil and products export leader in the Russian North-Western region. There are four berths in the port. The depth at the moorage wall is up to 18.2 m. The port is able to service 150 thousand tons dwt tankers. In future, according to Vice Governor of the Leningrad region Grigory Dvas, 200 thousand tons dwt tankers with small draft may be serviced there.
The January events (bargaining with the Government of the Republic of Belarus on the increase of price for oil and gas for Byelorussian consumers and the increase of transit dues in response) made the RF Government look for oil transportation capacities alternative to Druzhba oil pipeline. In its turn, Byelorussia started to launch oil and gas extraction on the territory of Iran. The Ministry of Fuel and Energy and Transneft to prepare all the necessary documentation to launch the construction of the second stage of the BPS. The new 1,000 km long oil pipeline will run along the border with Byelorussia from the Unecha station (Bryansk region) to the port of Primorsk. The capacity of the line at the first stage is to amount to 50 mln tons per annum, and later it is to increase to 75 mln tons. The cost of BPS2 construction is estimated at USD 2-2.5 bln.
However, calculating the profitability of transportation along the Druzhba pipeline and the new dues, oil delivery via Byelorussia will cost over USD 5.5 bln, which exceeds the expenses on the BPS2 construction. It should be considered that the increasing demand for energy carriers in the EU will load both – the oil Druzhba and the new BPS. “In the near future, the basic volume of Russian oil will be exported to the West via the Baltic Sea”, highlighted the Head of Transneft company in his speech.
Lukoil – OAO RZD: United by One Target
For two years Lukoil has been using the BPS instead of its oil terminal in Vysotsk. Now the capacity of the terminal is 15 mln tons annually. By the end of this year the volume will amount to 12 mln tons. The total capacity of the terminal’s tank field amounts to 460 thousand cub. m of oil products. The rates on crude oil transportation by pipeline are much more profitable, and the capacity of the BPS is enough to carry all the necessary volume. Vice President of Transneft Sergey Grigoryev believes that this scheme will be more profitable for Lukoil than dispatches by railway, taking into account that the tariffs of OAO RZD are several times higher. In his words, transportation by the Baltic Pipeline System saves about USD 2 per barrel.
At the same time, the distributing and handling complex Vysotsk continues to enlarge its capacities. Representatives of OAO Lukoil-Trans said that the company succeeded in establishing a partnership with the October railway. Due to the proper logistics and OAO RZD top-management’s attention to the company’s problems no train with the company’s freight has been left behind since the launch of the distributing and handling complex Vysotsk. In 2007, OAO RZD concluded with OAO Lukoil an additional agreement on development of railway approaches to the terminal in Vysotsk. “We highly appreciate our cooperation with OAO RZD that makes for the most efficient exploitation of the object”, highlighted President of OAO Lukoil Vagit Alekperov. OAO RZD is less optimistic about its cooperation with Lukoil. Oleg Valinsky, Deputy Head of Transportation of the October railway, believes that the soft weather conditions of the last winter made for the recent growth of transportation via the distributing and handling complex Vysotsk.
The plans of OAO Lukoil to increase oil products transportation via the Baltic Sea may be broken because of the reconstruction of Saint Petersburg – Vyborg line for speeded up railway transportation. Nowadays trains carrying oil products and passenger trains run along one and the same mainline. The planned in 2004 construction of the so-called Sosnovsky line, and the connecting line Losevo - Kamennogorsk with the length of 52 km and a further outlet to Vysotsk has not been fulfilled yet. In fact, it is just at a preconstruction stage.
It should be mentioned that by 2020, the freight flow to Finland and the ports of Vysotsk and Vyborg will increase to 50 mln tons annually or 50 train pairs daily.
Alexey Lebedev
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[~PREVIEW_TEXT] => In spite of the “cooling down” of political relations between Russia and the EU, obviously, the latter will hardly suffer from the lack of energy. It is confirmed by Russian oil and gas companies’ plans to increase the capacities to export hydrocarbons via the RF North-Western region – the enlargement of the Baltic Pipeline System (the BPS) capacity to 110 mln tons of oil annually.
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/018.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />In spite of the “cooling down” of political relations between Russia and the EU, obviously, the latter will hardly suffer from the lack of energy. It is confirmed by Russian oil and gas companies’ plans to increase the capacities to export hydrocarbons via the RF North-Western region – the enlargement of the Baltic Pipeline System (the BPS) capacity to 110 mln tons of oil annually.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/018.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />In spite of the “cooling down” of political relations between Russia and the EU, obviously, the latter will hardly suffer from the lack of energy. It is confirmed by Russian oil and gas companies’ plans to increase the capacities to export hydrocarbons via the RF North-Western region – the enlargement of the Baltic Pipeline System (the BPS) capacity to 110 mln tons of oil annually.
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[DETAIL_TEXT] => Bread Rises in Price
According to analytical report developed by the Russian Grain Union (RGU) for the Ministry of Agriculture in spring 2007 prices on basic types of grain on the domestic market jumped high significantly. Thus, if early May food wheat of the 3d class cost about RUR 4.200 per ton, then late July it cost RUR 6.200 per ton. Prices growth was reasoned by not only poor harvest forecasted for 2007 but also by the world market tendencies. For the same period the price on wheat in the world grew from USD 130-150 per ton to USD 300 per ton.
This was the consequences of poor harvest in the USA, Canada and Australia and growth of biofuel production manufactured from grain. The world resources of grain were exhausted by mid-summer. The same sad result was recorded 28 years ago. From the beginning of the year to July the EU commercial resources of grain (wheat first of all) reduced from 14.5 mln tons to 2.5 mln tons. Since 2002 Russia has performed as the biggest world grain exporter. In 2005/2006 the volume of grain export amounted to 12.2 mln tons and in 2006/2007 – 11.9 mln tons which makes about 10% of world export. It is quite natural that the world prices influence domestic rates significantly.
As an example of domestic price for grain formation RGU gives the results of tender held in Egypt on August 28, 2007. The price of purchase with supply in October 2007 in FOB terms made USD 306.5 per ton. The cost of charter in Novorossiysk will make RUR 964 per ton for the vessel of 25 thousand tons deadweight, handling in the port makes RUR 463 per ton, documents and sanitary inspection RUR 130 per ton. Railway tariff and respective services within South Federal District amounts to about RUR 600 per ton. Thus, the price of the grain of the 4th class on elevator makes about RUR 5.600 per ton. At the same time experts say, total prime cost of grain production in the South Federal District makes RUR 4.000 – 4.500 per ton and in Northern and Eastern regions even higher.
Grain Carriers are Wanted
Favourable market conditions assisted in growth of bread production railway transportation. OAO RZD plans for 2007 envisaged this sort of transportation would increase by only 1.4%. However, starting from summer all the news agencies informed about significant increase in forecasted transportation share. For 9 months of 2007 ОАО RZD boosted grain transportation by 32% year-on-year.
According to market participants, now export grain goes from mainly South Ural and Western Siberia. Igor Pavensky, expert of the Institute of Agricultural Market, believes this happened due to favourable weather conditions set in these regions in September and October as well as decreasing tariff rates (0.5 of the tariff on cargo transportation for over 1.100 kilometers from Siberian and Far Eastern federal regions. Moreover, for the first time in recent years significant flow of grain cargo transported by railways was directed to the Ukrainian ports.
The above-mentioned factors have caused great number of problems that traders try to solve.
During past five years the basic export grain volumes were transported from the South federal District. Significant grain volumes were delivered by motor trucks to the port terminals since this scheme of transportation for distance to 600 kilometers seems more profitable that railway transport services. In the regions close to the Black Sea ports of Ukraine and Kuban harvest of 2007 suffered from draught and the most serious problem to solve was how to transport grain to them by railways considering logistic difficulties and deficit in grain carriers.
Sergey Shakhovets, Head of information-analytical department of RGU, says that in the regions of Privolzhskaya and Kuibyshevskaya railways rolling stock deficit amounts to 50% of aggregate volumes of harvest. In order to transport production railwaymen even offer rolling stock developed for cement and alumina transportation. North-Caucasus railway suffers deficit of 2.500 railroad cars. Traders try to apply to private operator companies, though there are no such business-units who operate the number of cars sufficient to handle industrial volumes. Moreover, private operator companies do not show interest in grain carrying rolling stock purchase. In the opinions of private operators representatives, ОАО RZD has kept itself off from the problem, though it could be solved even partially within consultations with grain market experts. For OAO RZD this situation looks much less dramatic. Tatyana Morkovkina, Head of foodstuffs cargo transportation department of OAO RZD, does not understand why grain traders feel offended if the corporation transports by 32% more compared with the last year volumes and by 5.5% more compared to the company’s plan.
It should be underlined once again all this is about export transportation. The situation with typical deficit of specialized rolling stock has intensified due to the world prices which turned Russian grain in highly attractive goods. But not for this situation, even discount from the tariff could have helped in grain transportation from the Ural and Siberia.
I.Pavensky believes that traders could have sold at 1.5 times more grain if the transport sector had given required amount of rolling stock. Now OAO RZD operates about 14 thousand units of grain carriers. However, in experts’ opinions, half of them got foul since was used for cement transportation and other non-profile cargo. The corportation does not hurry to purchase specialized rolling stock i.e. grain carriers. In 2007 from 8000 new railroad cars purchased by the corporation there were no grain carriers. While planning purchases for 2008 Transportation Department of the company has reduced three thousand units initially planned to just one thousand. It is quite clear that even if the company buys three thousand units of specialized rolling stock the deficit problem will remain unsolved. Guiding by the motives typical for private operators purchase policy ОАО RZD is not eager to acquire this sort of rolling stock. Despite the fact that grain remains profitable cargo it is not possible to forecast market tendencies for the next years. And to invest into assets with unclear terms of payback is unacceptable thing even for such a big player as OAO RZD.
On the other hand, rolling stock deficit impacts on domestic market of grain positively. I.Pavensky believes that together with bar export duties introduction and occasional goods interventions the lack of rolling stock restrains domestic prices growth.
Port capacities: confident development for unwarranted volumes
The basic export terminal providing services on grain handling in Russia is ОАО Sea Commercial Port of Novorossiysk. The enterprise planned to launch grain handling complex ОАО Novorossiysk Grain Terminal with capacities of 4 mln tons per year in July, and then the date was set on August. Construction of the terminal started in May 2005, trial operation were held in March 2007. The complex is projected for handling grain to sea vessels from railway and motor truck transport. Deep water berth will allow to receive Panamax vessels (to 70 thousand tons). The terminal is equipped with speeded handling machinery – 800 thousand tons per hour, including that of for handling grain from river vessels in board-to-board way and able to store 125 thousand tons of grain. Technical throughput capacity is estimated at 5 mln tons per year. After handling complex launch the port of Novorossiysk will be capable to service 200 rail cars per day.
The port of Tuapse also started to construct grain terminal with capacities of 2.6 mln tons per year. The construction is implemented by the joined efforts of ОАО NTK, OAO Novolipetsky metallurgical complex affiliate, and OAO Sea Commercial port Tuapse. In words of S.Kozlov, by now railway accesses to the terminal have been constructed. The terminal is to start operations in November 2008, though its launch can be delayed. Considering specific of railway transportation, the terminal elevators are also projected to receive cargo from motor transport. To store 102 thousand tons of grain 7 units with capacity of 14.6 thousand tons each will be constructed.
At present the port of Tuapse carries on cooperation with the North-Caucasian railway in car-vessel mode of handling. According to plans of Sergey Kozlov, CEO of the port of Tuapse, the enterprise is to handle 900 thousand tons of grain. At the same time the warehousing areas of the port will be overpacked with grain by the end of the year.
Summing Up
Harvest growth by several million of tons is not crucial for the Russian transport system. Elevator capacities functioning in agricultural regions exceed even highest production volumes. As usual, problems arise in foreign trade transportation and in the area of meeting railway-port operations. In 2002 while total export euphoria every port of the RF and neighboring countries claimed their intention to construct port elevators. However, stabilization of export deliveries damped down most of stevedoring companies. As a result the above-mentioned plans were implemented only by the port of Novorossiysk and Tuapse.
The basic conflict to mention lies in uneven car giving for unload procedures. For example, early October to Tuapse port accesses about 180 railroad cars with grain were given considering port opportunity to handle about 5 rail cars per day. As a result idling rolling stock with grain and other cargo was found and the penalties ОАО Sea Commercial port of Tuapse has to pay to stevedores are quite high.
Next year will be promising and stable since launched Black sea terminal will smooth the situation and high demand on the Russian grain will be satisfied with no unbearable stress for the transport system of the state.
by Alexey Lebedev
[~DETAIL_TEXT] => Bread Rises in Price
According to analytical report developed by the Russian Grain Union (RGU) for the Ministry of Agriculture in spring 2007 prices on basic types of grain on the domestic market jumped high significantly. Thus, if early May food wheat of the 3d class cost about RUR 4.200 per ton, then late July it cost RUR 6.200 per ton. Prices growth was reasoned by not only poor harvest forecasted for 2007 but also by the world market tendencies. For the same period the price on wheat in the world grew from USD 130-150 per ton to USD 300 per ton.
This was the consequences of poor harvest in the USA, Canada and Australia and growth of biofuel production manufactured from grain. The world resources of grain were exhausted by mid-summer. The same sad result was recorded 28 years ago. From the beginning of the year to July the EU commercial resources of grain (wheat first of all) reduced from 14.5 mln tons to 2.5 mln tons. Since 2002 Russia has performed as the biggest world grain exporter. In 2005/2006 the volume of grain export amounted to 12.2 mln tons and in 2006/2007 – 11.9 mln tons which makes about 10% of world export. It is quite natural that the world prices influence domestic rates significantly.
As an example of domestic price for grain formation RGU gives the results of tender held in Egypt on August 28, 2007. The price of purchase with supply in October 2007 in FOB terms made USD 306.5 per ton. The cost of charter in Novorossiysk will make RUR 964 per ton for the vessel of 25 thousand tons deadweight, handling in the port makes RUR 463 per ton, documents and sanitary inspection RUR 130 per ton. Railway tariff and respective services within South Federal District amounts to about RUR 600 per ton. Thus, the price of the grain of the 4th class on elevator makes about RUR 5.600 per ton. At the same time experts say, total prime cost of grain production in the South Federal District makes RUR 4.000 – 4.500 per ton and in Northern and Eastern regions even higher.
Grain Carriers are Wanted
Favourable market conditions assisted in growth of bread production railway transportation. OAO RZD plans for 2007 envisaged this sort of transportation would increase by only 1.4%. However, starting from summer all the news agencies informed about significant increase in forecasted transportation share. For 9 months of 2007 ОАО RZD boosted grain transportation by 32% year-on-year.
According to market participants, now export grain goes from mainly South Ural and Western Siberia. Igor Pavensky, expert of the Institute of Agricultural Market, believes this happened due to favourable weather conditions set in these regions in September and October as well as decreasing tariff rates (0.5 of the tariff on cargo transportation for over 1.100 kilometers from Siberian and Far Eastern federal regions. Moreover, for the first time in recent years significant flow of grain cargo transported by railways was directed to the Ukrainian ports.
The above-mentioned factors have caused great number of problems that traders try to solve.
During past five years the basic export grain volumes were transported from the South federal District. Significant grain volumes were delivered by motor trucks to the port terminals since this scheme of transportation for distance to 600 kilometers seems more profitable that railway transport services. In the regions close to the Black Sea ports of Ukraine and Kuban harvest of 2007 suffered from draught and the most serious problem to solve was how to transport grain to them by railways considering logistic difficulties and deficit in grain carriers.
Sergey Shakhovets, Head of information-analytical department of RGU, says that in the regions of Privolzhskaya and Kuibyshevskaya railways rolling stock deficit amounts to 50% of aggregate volumes of harvest. In order to transport production railwaymen even offer rolling stock developed for cement and alumina transportation. North-Caucasus railway suffers deficit of 2.500 railroad cars. Traders try to apply to private operator companies, though there are no such business-units who operate the number of cars sufficient to handle industrial volumes. Moreover, private operator companies do not show interest in grain carrying rolling stock purchase. In the opinions of private operators representatives, ОАО RZD has kept itself off from the problem, though it could be solved even partially within consultations with grain market experts. For OAO RZD this situation looks much less dramatic. Tatyana Morkovkina, Head of foodstuffs cargo transportation department of OAO RZD, does not understand why grain traders feel offended if the corporation transports by 32% more compared with the last year volumes and by 5.5% more compared to the company’s plan.
It should be underlined once again all this is about export transportation. The situation with typical deficit of specialized rolling stock has intensified due to the world prices which turned Russian grain in highly attractive goods. But not for this situation, even discount from the tariff could have helped in grain transportation from the Ural and Siberia.
I.Pavensky believes that traders could have sold at 1.5 times more grain if the transport sector had given required amount of rolling stock. Now OAO RZD operates about 14 thousand units of grain carriers. However, in experts’ opinions, half of them got foul since was used for cement transportation and other non-profile cargo. The corportation does not hurry to purchase specialized rolling stock i.e. grain carriers. In 2007 from 8000 new railroad cars purchased by the corporation there were no grain carriers. While planning purchases for 2008 Transportation Department of the company has reduced three thousand units initially planned to just one thousand. It is quite clear that even if the company buys three thousand units of specialized rolling stock the deficit problem will remain unsolved. Guiding by the motives typical for private operators purchase policy ОАО RZD is not eager to acquire this sort of rolling stock. Despite the fact that grain remains profitable cargo it is not possible to forecast market tendencies for the next years. And to invest into assets with unclear terms of payback is unacceptable thing even for such a big player as OAO RZD.
On the other hand, rolling stock deficit impacts on domestic market of grain positively. I.Pavensky believes that together with bar export duties introduction and occasional goods interventions the lack of rolling stock restrains domestic prices growth.
Port capacities: confident development for unwarranted volumes
The basic export terminal providing services on grain handling in Russia is ОАО Sea Commercial Port of Novorossiysk. The enterprise planned to launch grain handling complex ОАО Novorossiysk Grain Terminal with capacities of 4 mln tons per year in July, and then the date was set on August. Construction of the terminal started in May 2005, trial operation were held in March 2007. The complex is projected for handling grain to sea vessels from railway and motor truck transport. Deep water berth will allow to receive Panamax vessels (to 70 thousand tons). The terminal is equipped with speeded handling machinery – 800 thousand tons per hour, including that of for handling grain from river vessels in board-to-board way and able to store 125 thousand tons of grain. Technical throughput capacity is estimated at 5 mln tons per year. After handling complex launch the port of Novorossiysk will be capable to service 200 rail cars per day.
The port of Tuapse also started to construct grain terminal with capacities of 2.6 mln tons per year. The construction is implemented by the joined efforts of ОАО NTK, OAO Novolipetsky metallurgical complex affiliate, and OAO Sea Commercial port Tuapse. In words of S.Kozlov, by now railway accesses to the terminal have been constructed. The terminal is to start operations in November 2008, though its launch can be delayed. Considering specific of railway transportation, the terminal elevators are also projected to receive cargo from motor transport. To store 102 thousand tons of grain 7 units with capacity of 14.6 thousand tons each will be constructed.
At present the port of Tuapse carries on cooperation with the North-Caucasian railway in car-vessel mode of handling. According to plans of Sergey Kozlov, CEO of the port of Tuapse, the enterprise is to handle 900 thousand tons of grain. At the same time the warehousing areas of the port will be overpacked with grain by the end of the year.
Summing Up
Harvest growth by several million of tons is not crucial for the Russian transport system. Elevator capacities functioning in agricultural regions exceed even highest production volumes. As usual, problems arise in foreign trade transportation and in the area of meeting railway-port operations. In 2002 while total export euphoria every port of the RF and neighboring countries claimed their intention to construct port elevators. However, stabilization of export deliveries damped down most of stevedoring companies. As a result the above-mentioned plans were implemented only by the port of Novorossiysk and Tuapse.
The basic conflict to mention lies in uneven car giving for unload procedures. For example, early October to Tuapse port accesses about 180 railroad cars with grain were given considering port opportunity to handle about 5 rail cars per day. As a result idling rolling stock with grain and other cargo was found and the penalties ОАО Sea Commercial port of Tuapse has to pay to stevedores are quite high.
Next year will be promising and stable since launched Black sea terminal will smooth the situation and high demand on the Russian grain will be satisfied with no unbearable stress for the transport system of the state.
by Alexey Lebedev
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[SECTION_META_DESCRIPTION] => Rich harvest of 2007 in Russia and high prices on grain set on the world market have examined transport system of the state again. Now according to the Russian Grain Union, practically each grain trader faces problems with specialized railroad cars since the volumes of the grain to be transported are twofold higher than the volume of available rolling stock.
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[DETAIL_TEXT] => Bread Rises in Price
According to analytical report developed by the Russian Grain Union (RGU) for the Ministry of Agriculture in spring 2007 prices on basic types of grain on the domestic market jumped high significantly. Thus, if early May food wheat of the 3d class cost about RUR 4.200 per ton, then late July it cost RUR 6.200 per ton. Prices growth was reasoned by not only poor harvest forecasted for 2007 but also by the world market tendencies. For the same period the price on wheat in the world grew from USD 130-150 per ton to USD 300 per ton.
This was the consequences of poor harvest in the USA, Canada and Australia and growth of biofuel production manufactured from grain. The world resources of grain were exhausted by mid-summer. The same sad result was recorded 28 years ago. From the beginning of the year to July the EU commercial resources of grain (wheat first of all) reduced from 14.5 mln tons to 2.5 mln tons. Since 2002 Russia has performed as the biggest world grain exporter. In 2005/2006 the volume of grain export amounted to 12.2 mln tons and in 2006/2007 – 11.9 mln tons which makes about 10% of world export. It is quite natural that the world prices influence domestic rates significantly.
As an example of domestic price for grain formation RGU gives the results of tender held in Egypt on August 28, 2007. The price of purchase with supply in October 2007 in FOB terms made USD 306.5 per ton. The cost of charter in Novorossiysk will make RUR 964 per ton for the vessel of 25 thousand tons deadweight, handling in the port makes RUR 463 per ton, documents and sanitary inspection RUR 130 per ton. Railway tariff and respective services within South Federal District amounts to about RUR 600 per ton. Thus, the price of the grain of the 4th class on elevator makes about RUR 5.600 per ton. At the same time experts say, total prime cost of grain production in the South Federal District makes RUR 4.000 – 4.500 per ton and in Northern and Eastern regions even higher.
Grain Carriers are Wanted
Favourable market conditions assisted in growth of bread production railway transportation. OAO RZD plans for 2007 envisaged this sort of transportation would increase by only 1.4%. However, starting from summer all the news agencies informed about significant increase in forecasted transportation share. For 9 months of 2007 ОАО RZD boosted grain transportation by 32% year-on-year.
According to market participants, now export grain goes from mainly South Ural and Western Siberia. Igor Pavensky, expert of the Institute of Agricultural Market, believes this happened due to favourable weather conditions set in these regions in September and October as well as decreasing tariff rates (0.5 of the tariff on cargo transportation for over 1.100 kilometers from Siberian and Far Eastern federal regions. Moreover, for the first time in recent years significant flow of grain cargo transported by railways was directed to the Ukrainian ports.
The above-mentioned factors have caused great number of problems that traders try to solve.
During past five years the basic export grain volumes were transported from the South federal District. Significant grain volumes were delivered by motor trucks to the port terminals since this scheme of transportation for distance to 600 kilometers seems more profitable that railway transport services. In the regions close to the Black Sea ports of Ukraine and Kuban harvest of 2007 suffered from draught and the most serious problem to solve was how to transport grain to them by railways considering logistic difficulties and deficit in grain carriers.
Sergey Shakhovets, Head of information-analytical department of RGU, says that in the regions of Privolzhskaya and Kuibyshevskaya railways rolling stock deficit amounts to 50% of aggregate volumes of harvest. In order to transport production railwaymen even offer rolling stock developed for cement and alumina transportation. North-Caucasus railway suffers deficit of 2.500 railroad cars. Traders try to apply to private operator companies, though there are no such business-units who operate the number of cars sufficient to handle industrial volumes. Moreover, private operator companies do not show interest in grain carrying rolling stock purchase. In the opinions of private operators representatives, ОАО RZD has kept itself off from the problem, though it could be solved even partially within consultations with grain market experts. For OAO RZD this situation looks much less dramatic. Tatyana Morkovkina, Head of foodstuffs cargo transportation department of OAO RZD, does not understand why grain traders feel offended if the corporation transports by 32% more compared with the last year volumes and by 5.5% more compared to the company’s plan.
It should be underlined once again all this is about export transportation. The situation with typical deficit of specialized rolling stock has intensified due to the world prices which turned Russian grain in highly attractive goods. But not for this situation, even discount from the tariff could have helped in grain transportation from the Ural and Siberia.
I.Pavensky believes that traders could have sold at 1.5 times more grain if the transport sector had given required amount of rolling stock. Now OAO RZD operates about 14 thousand units of grain carriers. However, in experts’ opinions, half of them got foul since was used for cement transportation and other non-profile cargo. The corportation does not hurry to purchase specialized rolling stock i.e. grain carriers. In 2007 from 8000 new railroad cars purchased by the corporation there were no grain carriers. While planning purchases for 2008 Transportation Department of the company has reduced three thousand units initially planned to just one thousand. It is quite clear that even if the company buys three thousand units of specialized rolling stock the deficit problem will remain unsolved. Guiding by the motives typical for private operators purchase policy ОАО RZD is not eager to acquire this sort of rolling stock. Despite the fact that grain remains profitable cargo it is not possible to forecast market tendencies for the next years. And to invest into assets with unclear terms of payback is unacceptable thing even for such a big player as OAO RZD.
On the other hand, rolling stock deficit impacts on domestic market of grain positively. I.Pavensky believes that together with bar export duties introduction and occasional goods interventions the lack of rolling stock restrains domestic prices growth.
Port capacities: confident development for unwarranted volumes
The basic export terminal providing services on grain handling in Russia is ОАО Sea Commercial Port of Novorossiysk. The enterprise planned to launch grain handling complex ОАО Novorossiysk Grain Terminal with capacities of 4 mln tons per year in July, and then the date was set on August. Construction of the terminal started in May 2005, trial operation were held in March 2007. The complex is projected for handling grain to sea vessels from railway and motor truck transport. Deep water berth will allow to receive Panamax vessels (to 70 thousand tons). The terminal is equipped with speeded handling machinery – 800 thousand tons per hour, including that of for handling grain from river vessels in board-to-board way and able to store 125 thousand tons of grain. Technical throughput capacity is estimated at 5 mln tons per year. After handling complex launch the port of Novorossiysk will be capable to service 200 rail cars per day.
The port of Tuapse also started to construct grain terminal with capacities of 2.6 mln tons per year. The construction is implemented by the joined efforts of ОАО NTK, OAO Novolipetsky metallurgical complex affiliate, and OAO Sea Commercial port Tuapse. In words of S.Kozlov, by now railway accesses to the terminal have been constructed. The terminal is to start operations in November 2008, though its launch can be delayed. Considering specific of railway transportation, the terminal elevators are also projected to receive cargo from motor transport. To store 102 thousand tons of grain 7 units with capacity of 14.6 thousand tons each will be constructed.
At present the port of Tuapse carries on cooperation with the North-Caucasian railway in car-vessel mode of handling. According to plans of Sergey Kozlov, CEO of the port of Tuapse, the enterprise is to handle 900 thousand tons of grain. At the same time the warehousing areas of the port will be overpacked with grain by the end of the year.
Summing Up
Harvest growth by several million of tons is not crucial for the Russian transport system. Elevator capacities functioning in agricultural regions exceed even highest production volumes. As usual, problems arise in foreign trade transportation and in the area of meeting railway-port operations. In 2002 while total export euphoria every port of the RF and neighboring countries claimed their intention to construct port elevators. However, stabilization of export deliveries damped down most of stevedoring companies. As a result the above-mentioned plans were implemented only by the port of Novorossiysk and Tuapse.
The basic conflict to mention lies in uneven car giving for unload procedures. For example, early October to Tuapse port accesses about 180 railroad cars with grain were given considering port opportunity to handle about 5 rail cars per day. As a result idling rolling stock with grain and other cargo was found and the penalties ОАО Sea Commercial port of Tuapse has to pay to stevedores are quite high.
Next year will be promising and stable since launched Black sea terminal will smooth the situation and high demand on the Russian grain will be satisfied with no unbearable stress for the transport system of the state.
by Alexey Lebedev
[~DETAIL_TEXT] => Bread Rises in Price
According to analytical report developed by the Russian Grain Union (RGU) for the Ministry of Agriculture in spring 2007 prices on basic types of grain on the domestic market jumped high significantly. Thus, if early May food wheat of the 3d class cost about RUR 4.200 per ton, then late July it cost RUR 6.200 per ton. Prices growth was reasoned by not only poor harvest forecasted for 2007 but also by the world market tendencies. For the same period the price on wheat in the world grew from USD 130-150 per ton to USD 300 per ton.
This was the consequences of poor harvest in the USA, Canada and Australia and growth of biofuel production manufactured from grain. The world resources of grain were exhausted by mid-summer. The same sad result was recorded 28 years ago. From the beginning of the year to July the EU commercial resources of grain (wheat first of all) reduced from 14.5 mln tons to 2.5 mln tons. Since 2002 Russia has performed as the biggest world grain exporter. In 2005/2006 the volume of grain export amounted to 12.2 mln tons and in 2006/2007 – 11.9 mln tons which makes about 10% of world export. It is quite natural that the world prices influence domestic rates significantly.
As an example of domestic price for grain formation RGU gives the results of tender held in Egypt on August 28, 2007. The price of purchase with supply in October 2007 in FOB terms made USD 306.5 per ton. The cost of charter in Novorossiysk will make RUR 964 per ton for the vessel of 25 thousand tons deadweight, handling in the port makes RUR 463 per ton, documents and sanitary inspection RUR 130 per ton. Railway tariff and respective services within South Federal District amounts to about RUR 600 per ton. Thus, the price of the grain of the 4th class on elevator makes about RUR 5.600 per ton. At the same time experts say, total prime cost of grain production in the South Federal District makes RUR 4.000 – 4.500 per ton and in Northern and Eastern regions even higher.
Grain Carriers are Wanted
Favourable market conditions assisted in growth of bread production railway transportation. OAO RZD plans for 2007 envisaged this sort of transportation would increase by only 1.4%. However, starting from summer all the news agencies informed about significant increase in forecasted transportation share. For 9 months of 2007 ОАО RZD boosted grain transportation by 32% year-on-year.
According to market participants, now export grain goes from mainly South Ural and Western Siberia. Igor Pavensky, expert of the Institute of Agricultural Market, believes this happened due to favourable weather conditions set in these regions in September and October as well as decreasing tariff rates (0.5 of the tariff on cargo transportation for over 1.100 kilometers from Siberian and Far Eastern federal regions. Moreover, for the first time in recent years significant flow of grain cargo transported by railways was directed to the Ukrainian ports.
The above-mentioned factors have caused great number of problems that traders try to solve.
During past five years the basic export grain volumes were transported from the South federal District. Significant grain volumes were delivered by motor trucks to the port terminals since this scheme of transportation for distance to 600 kilometers seems more profitable that railway transport services. In the regions close to the Black Sea ports of Ukraine and Kuban harvest of 2007 suffered from draught and the most serious problem to solve was how to transport grain to them by railways considering logistic difficulties and deficit in grain carriers.
Sergey Shakhovets, Head of information-analytical department of RGU, says that in the regions of Privolzhskaya and Kuibyshevskaya railways rolling stock deficit amounts to 50% of aggregate volumes of harvest. In order to transport production railwaymen even offer rolling stock developed for cement and alumina transportation. North-Caucasus railway suffers deficit of 2.500 railroad cars. Traders try to apply to private operator companies, though there are no such business-units who operate the number of cars sufficient to handle industrial volumes. Moreover, private operator companies do not show interest in grain carrying rolling stock purchase. In the opinions of private operators representatives, ОАО RZD has kept itself off from the problem, though it could be solved even partially within consultations with grain market experts. For OAO RZD this situation looks much less dramatic. Tatyana Morkovkina, Head of foodstuffs cargo transportation department of OAO RZD, does not understand why grain traders feel offended if the corporation transports by 32% more compared with the last year volumes and by 5.5% more compared to the company’s plan.
It should be underlined once again all this is about export transportation. The situation with typical deficit of specialized rolling stock has intensified due to the world prices which turned Russian grain in highly attractive goods. But not for this situation, even discount from the tariff could have helped in grain transportation from the Ural and Siberia.
I.Pavensky believes that traders could have sold at 1.5 times more grain if the transport sector had given required amount of rolling stock. Now OAO RZD operates about 14 thousand units of grain carriers. However, in experts’ opinions, half of them got foul since was used for cement transportation and other non-profile cargo. The corportation does not hurry to purchase specialized rolling stock i.e. grain carriers. In 2007 from 8000 new railroad cars purchased by the corporation there were no grain carriers. While planning purchases for 2008 Transportation Department of the company has reduced three thousand units initially planned to just one thousand. It is quite clear that even if the company buys three thousand units of specialized rolling stock the deficit problem will remain unsolved. Guiding by the motives typical for private operators purchase policy ОАО RZD is not eager to acquire this sort of rolling stock. Despite the fact that grain remains profitable cargo it is not possible to forecast market tendencies for the next years. And to invest into assets with unclear terms of payback is unacceptable thing even for such a big player as OAO RZD.
On the other hand, rolling stock deficit impacts on domestic market of grain positively. I.Pavensky believes that together with bar export duties introduction and occasional goods interventions the lack of rolling stock restrains domestic prices growth.
Port capacities: confident development for unwarranted volumes
The basic export terminal providing services on grain handling in Russia is ОАО Sea Commercial Port of Novorossiysk. The enterprise planned to launch grain handling complex ОАО Novorossiysk Grain Terminal with capacities of 4 mln tons per year in July, and then the date was set on August. Construction of the terminal started in May 2005, trial operation were held in March 2007. The complex is projected for handling grain to sea vessels from railway and motor truck transport. Deep water berth will allow to receive Panamax vessels (to 70 thousand tons). The terminal is equipped with speeded handling machinery – 800 thousand tons per hour, including that of for handling grain from river vessels in board-to-board way and able to store 125 thousand tons of grain. Technical throughput capacity is estimated at 5 mln tons per year. After handling complex launch the port of Novorossiysk will be capable to service 200 rail cars per day.
The port of Tuapse also started to construct grain terminal with capacities of 2.6 mln tons per year. The construction is implemented by the joined efforts of ОАО NTK, OAO Novolipetsky metallurgical complex affiliate, and OAO Sea Commercial port Tuapse. In words of S.Kozlov, by now railway accesses to the terminal have been constructed. The terminal is to start operations in November 2008, though its launch can be delayed. Considering specific of railway transportation, the terminal elevators are also projected to receive cargo from motor transport. To store 102 thousand tons of grain 7 units with capacity of 14.6 thousand tons each will be constructed.
At present the port of Tuapse carries on cooperation with the North-Caucasian railway in car-vessel mode of handling. According to plans of Sergey Kozlov, CEO of the port of Tuapse, the enterprise is to handle 900 thousand tons of grain. At the same time the warehousing areas of the port will be overpacked with grain by the end of the year.
Summing Up
Harvest growth by several million of tons is not crucial for the Russian transport system. Elevator capacities functioning in agricultural regions exceed even highest production volumes. As usual, problems arise in foreign trade transportation and in the area of meeting railway-port operations. In 2002 while total export euphoria every port of the RF and neighboring countries claimed their intention to construct port elevators. However, stabilization of export deliveries damped down most of stevedoring companies. As a result the above-mentioned plans were implemented only by the port of Novorossiysk and Tuapse.
The basic conflict to mention lies in uneven car giving for unload procedures. For example, early October to Tuapse port accesses about 180 railroad cars with grain were given considering port opportunity to handle about 5 rail cars per day. As a result idling rolling stock with grain and other cargo was found and the penalties ОАО Sea Commercial port of Tuapse has to pay to stevedores are quite high.
Next year will be promising and stable since launched Black sea terminal will smooth the situation and high demand on the Russian grain will be satisfied with no unbearable stress for the transport system of the state.
by Alexey Lebedev
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[DETAIL_TEXT] => Estonia – Kazakhstan: Block Train Launched
On October 30, Eesti Raudtee (the Estonian Railway) launched the first block train from Tallinn to Kazakhstan. During the previous five years, containerised cargoes were delivered to Latvia, and then transported to Middle Asia by Baltika-Transit train.
Urmas Glaze, Head of Eesti Raudtee PR Service, said that the company plans to make the line a regular one and dispatch at least one train a week.
A block train consists of 20 wagons or 44 TEU. Delivery time is one week.
The advantage of block trains in comparison with road transport is evident today: they can cross the overloaded Russian border in the shortest time possible.
The Baltic States’ Ports: Growth Is Minimal
The throughput of the Baltic States’ ports amounted to 106.876 million tons of freight in January – September 2007, 2.4% up year-on-year.
44.1% of the cargo was handled in the Latvian ports, 33.2% and 22.6% were serviced in the Estonian and Lithuanian ports respectively. During nine months of 2007, the ports of Latvia handled 47.165 million tons of cargo, 4.1% up year-on-year. The throughput of the Estonian ports grew by 4.2% year-on-year to 35.526 million tons. The Lithuanian ports services 24.185 million tons, 9.9% up in comparison with January-September 2006.
The most cargo was handled in the port of Tallinn – 28.654 million tons, 6.6% down year-on-year. The port of Ventspils serviced 23.865 million tons (+8.6%). The throughput of the Klaipeda port increased by 16.5% to 20.417 million tons.
Grain Loading Will Increase by 25% in 2007
OAO RZD (Russian Railways JSC) forecasts that the volume of grain loading at the railways may amount to 22-23 million tons in 2007, 25% up year-on-year.
According to the forecasts of specialists at OAO RZD, 12-13 million tons will be loaded for domestic transportation. About 10 million tons will be carried for export by railway transport.
The adopted plan of grain loading by Russian Railways amounts to 1.25 wagons daily, 20.6% up year-on-year.
The enlarged volume of grain for transportation was prompted by the decision of the RF Government to implement 10% and 30% customs dues on wheat and barley export respectively as well as putting tradable interventions into operation.
Georgian Railway: Freight Transportation Structure
In January – August 2007, the Georgian Railway carried 14.6 million tons of freight, 87% of which was freight for international transportation.
Oil and products made 52.7% of the transported volume, and the share of dry cargo was 47.3%. The largest part of the latter was construction materials, grain, sugar, ferrous metal (including metal scrap), bauxites and argil.
Transit made 65.2% of the total freight volume carried by the railway. The share of import cargo was about 16%, with export share at 6.4%. Most international transportation was to and from Azerbaijan (over 62% of international transportation) and Armenia (11%). The share of Russian Railways was 5.9%, and that of Ukrzaliznytsya (the Ukrainian Railway) was 5.4%, with Kazakhstan at 1.6%.
Specialists at the Georgian Railway point out that use of Poti/Batumi – port Caucasus sector for transportation along the line will increase the volume of the Georgian Railway’s international transportation.
Ukrainian Sea Ports: Throughput Rose by 10%
The 19 commercial sea ports of Ukraine handled 92.598 million tons of freight in 9 months of 2007, 10.34% up year-on-year. Transit made the larger part of the growth, while export fell by over 2 million tons.
In three quarters of 2007, export handling fell by 5.31% year-on-year to 40.616 million tons. Export throughput volume dropped in the ports of Odessa, Ilyichevsk, and Yuzhny, as well as Nikolaev, Kherson, Reni and Izmail. Meanwhile, the port of Mariupol increased export handling by 12.33%. In 9 months of 2006, its export cargo servicing grew by 8.8%.
Transit transportation via the ports continues to increase fast. In January – September 2006, the growth was 9.6%, and in 9 months of the current year it amounted to 23.93%. Such an increase (+7.64 million tons) is a record for the Ukrainian port sector. The factor making the progress more stable is the balanced growth of transit constituents – dry cargo (+23.3%) and liquid bulk (+28.3%).
A similar trend of balanced growth has appeared in the import cargo handling sector. Dry cargo handling increased by 30.4%, and liquid bulk volume rose by 67.4%. As a result, import grew by 30.4% year-on-year to 8.499 million tons. A characteristic feature was a sudden and significant increase of import volume in the ports of Kerch and Yuzhny (eightfold growth), Berdyansk (fourfold increase), Kherson (threefold growth), and Feodossiya (by 1.5 times).
The Transsib: Transit Container Transportation at a Low Level
In 8 months of the current year, over 380,000TEU was transported along the Transsiberian Railway (the Transsib), 53% up year-on-year.
The President of OAO RZD Vladimir Yakunin said at the 16th meeting of the Coordinating Council for Transsiberian Transportation that transportation volumes along the Transsib between Russian and China grew by 43%, Russia and Korea by 79%, and Russia and Japan by 41%.
In the words of Vladimir Yakunin, the lion’s share of carried containers is for export and import transportation. Transit transportation is at a very low level. In spite of the progress in some areas, the main problems are as follows: an insufficient level of service, shortage of rolling stock and an uncompetitive tariff rate.
Byelorussian Railway: Export Makes 41% of Revenues
The Byelorussian Railway carried 72.1 million tons of cargo to and from other states in January – September 2007, 3.3% up year-on-year.
In 9 months of 2007, transit amounted to 35.8 million tons; the growth was 2.8%. The share of transit in international transportation of the Byelorussian Railway was 49.6%, with the Railway’s total transportation volume hitting 35%. The share of transit transportation in the Byelorussian Railway’s revenue is 38%.In January – September, the Byelorussian Railway carried 26.2 million tons of export cargo, 5.4% up year-on-year. The share of export in the volume transported by railway via the border of the Republic was 36.1%, and the Railway’s total transportation volume was 25%. The revenue from export transportation made up 41% of the total revenues from transportation fees.
In three quarters of 2007, imports fell by 0.8% to 10.1 million tons. The share of import in the revenues of the Byelorussian Railway was 12%.
New Route for Containers
OAO TransContainer launched a new route from China to Russian via the Zabaikalsk border crossing. On October 12, a block train loaded with components for Chinese GMC lorries left the Nanchannan station (China) for Moscow-Tovarnaya-Paveletskaya (Russia). The consignee is GMC Trading Rus company. The train ran via the Manchuria-Zabaikalsk border crossing and arrived in Moscow in 19 days.
“The main reason why the Chinese consignees chose our company is our technologies, the efficiency of which we have proved to our partners from the Asian and Pacific region countries. Transportation via the Transsib from the Asian and Pacific region states to the European part of Russia is much faster and safer than transportation by sea, and our block trains guarantee freight delivery on time”, said CEO of OAO TransContainer Pyotr Baskakov. In October it was planned to organise six block trains to transport 580 TEU for GMC company.
“Some Chinese car producers have already appreciated the services provided by OAO TransContainer. Twice a week, block trains run from Ningbo (China) to Verkh-Nevinsk (the Sverdlovsk region, Russia). They deliver components for Geely cars to the Urals Automobiles and Engines plant. About 1,000 TEU was transported via the route in the past two months”, he said.
Russian Railways: Plans Become True
In three quarters of 2007, the throughput of OAO RZD grew by 2.5% year-on-year to 996 million tons.
In particular, loading of profitable cargo increased by 3.5%. Loading of cars and grain grew by 32% and 23% respectively. Besides, OAO RZD loaded more metalware (+18%) and ferrous metal (+5%).
In September 2007, the throughput of OAO RZD grew by 0.2% year-on-year to 112.1 million tons.
In 9 months of 2007, the company fulfilled 60% of its investment programme, i.e. over RUR 150 billion.
The company is carrying out a number of large-scaled projects: “Infrastructure Development of the following transport directions Kuzbass – North-Western region, Kuzbass – Far Eastern transport junction, Kuzbass – the Azov and the Black Seas transport junction”; “Oil Transportation to China”; “Railway Infrastructure Modernisation on the Sakhalin Island”; “Launch of Speeded Passenger Transportation on the Route Saint Petersburg – Buslovskaya (and further to Helsinki)”; “Launch of High-Speed Passenger Transportation on the Route Saint Petersburg - Moscow”; “Launch of High-Speed Passenger Transportation on the Route Moscow – Nizhny Novgorod” etc.
Before the end of the year, OAO RZD plans to invest RUR 110 billion more into the above-mentioned projects.
Ukrzaliznytsya: Throughput Rose by 10.3%
The freight transportation volume of the Ukrainian Railway (Ukrzaliznytsya) amounted to 379.5 million tons, 9.2% (31.9 million tons) up year-on-year. The throughput increased by 10.3% or 18.1 billion t/km to 194.2 billion t/km.
In January-September of 2006 the freight transportation volume grew by 6% year-on-year (+19.6 million tons), and throughput increased by 7.8% (+12.7 billion t/km) in that period. Two years earlier, both figures were negative.
In three quarters of 2007, cargo dispatch increased by 5.7%, or 16.6 million tons, while a year earlier the figure was +4.6% (+12.8 million tons). Dispatched freight amounted to 307.9 million tons, with their share in the total transportation volume of Ukrzaliznytsya falling to 81%. In the previous year, the figure was 83.6%. The reduction was down to the consistent increase of Ukrzaliznytsya’s transit transportation share.
Kazakhstan Temir Zholy: Transit Grew by One Third
In 8 months of 2007, the transit volume carried via the territory of Kazakhstan increased by 27% year-on-year; the throughput increased by 29%.
Railway transit freight turnover grew by 29% year-on-year to 13.5 billion t/km. Transit transportation volume rose by 29% to 8 million tons. Such significant growth coincided with the distance of transportation increasing by 1%.
22% of the transit carried by Kazakhstan Temir Zholy was timber. Oil products amounted to 18%, mineral fertilisers and machine-building production made 5% each; the share of cotton, sugar and foodstuffs was 4% each. Transportation of metal goods (mainly pipes) increased by 82%, rolled ferrous metals grew by 67%. Transit of non-ferrous metal ore increased by 83%, fertilisers – by 47%, timber – by 40%. Oil products transportation growth made 46% year-on-year.
According to the assessments of Kazakhstan Temir Zholy, due to such significant figures, transit transportation will increase to 12 million tons by the end of 2007, 20% up year-on-year.
[~DETAIL_TEXT] => Estonia – Kazakhstan: Block Train Launched
On October 30, Eesti Raudtee (the Estonian Railway) launched the first block train from Tallinn to Kazakhstan. During the previous five years, containerised cargoes were delivered to Latvia, and then transported to Middle Asia by Baltika-Transit train.
Urmas Glaze, Head of Eesti Raudtee PR Service, said that the company plans to make the line a regular one and dispatch at least one train a week.
A block train consists of 20 wagons or 44 TEU. Delivery time is one week.
The advantage of block trains in comparison with road transport is evident today: they can cross the overloaded Russian border in the shortest time possible.
The Baltic States’ Ports: Growth Is Minimal
The throughput of the Baltic States’ ports amounted to 106.876 million tons of freight in January – September 2007, 2.4% up year-on-year.
44.1% of the cargo was handled in the Latvian ports, 33.2% and 22.6% were serviced in the Estonian and Lithuanian ports respectively. During nine months of 2007, the ports of Latvia handled 47.165 million tons of cargo, 4.1% up year-on-year. The throughput of the Estonian ports grew by 4.2% year-on-year to 35.526 million tons. The Lithuanian ports services 24.185 million tons, 9.9% up in comparison with January-September 2006.
The most cargo was handled in the port of Tallinn – 28.654 million tons, 6.6% down year-on-year. The port of Ventspils serviced 23.865 million tons (+8.6%). The throughput of the Klaipeda port increased by 16.5% to 20.417 million tons.
Grain Loading Will Increase by 25% in 2007
OAO RZD (Russian Railways JSC) forecasts that the volume of grain loading at the railways may amount to 22-23 million tons in 2007, 25% up year-on-year.
According to the forecasts of specialists at OAO RZD, 12-13 million tons will be loaded for domestic transportation. About 10 million tons will be carried for export by railway transport.
The adopted plan of grain loading by Russian Railways amounts to 1.25 wagons daily, 20.6% up year-on-year.
The enlarged volume of grain for transportation was prompted by the decision of the RF Government to implement 10% and 30% customs dues on wheat and barley export respectively as well as putting tradable interventions into operation.
Georgian Railway: Freight Transportation Structure
In January – August 2007, the Georgian Railway carried 14.6 million tons of freight, 87% of which was freight for international transportation.
Oil and products made 52.7% of the transported volume, and the share of dry cargo was 47.3%. The largest part of the latter was construction materials, grain, sugar, ferrous metal (including metal scrap), bauxites and argil.
Transit made 65.2% of the total freight volume carried by the railway. The share of import cargo was about 16%, with export share at 6.4%. Most international transportation was to and from Azerbaijan (over 62% of international transportation) and Armenia (11%). The share of Russian Railways was 5.9%, and that of Ukrzaliznytsya (the Ukrainian Railway) was 5.4%, with Kazakhstan at 1.6%.
Specialists at the Georgian Railway point out that use of Poti/Batumi – port Caucasus sector for transportation along the line will increase the volume of the Georgian Railway’s international transportation.
Ukrainian Sea Ports: Throughput Rose by 10%
The 19 commercial sea ports of Ukraine handled 92.598 million tons of freight in 9 months of 2007, 10.34% up year-on-year. Transit made the larger part of the growth, while export fell by over 2 million tons.
In three quarters of 2007, export handling fell by 5.31% year-on-year to 40.616 million tons. Export throughput volume dropped in the ports of Odessa, Ilyichevsk, and Yuzhny, as well as Nikolaev, Kherson, Reni and Izmail. Meanwhile, the port of Mariupol increased export handling by 12.33%. In 9 months of 2006, its export cargo servicing grew by 8.8%.
Transit transportation via the ports continues to increase fast. In January – September 2006, the growth was 9.6%, and in 9 months of the current year it amounted to 23.93%. Such an increase (+7.64 million tons) is a record for the Ukrainian port sector. The factor making the progress more stable is the balanced growth of transit constituents – dry cargo (+23.3%) and liquid bulk (+28.3%).
A similar trend of balanced growth has appeared in the import cargo handling sector. Dry cargo handling increased by 30.4%, and liquid bulk volume rose by 67.4%. As a result, import grew by 30.4% year-on-year to 8.499 million tons. A characteristic feature was a sudden and significant increase of import volume in the ports of Kerch and Yuzhny (eightfold growth), Berdyansk (fourfold increase), Kherson (threefold growth), and Feodossiya (by 1.5 times).
The Transsib: Transit Container Transportation at a Low Level
In 8 months of the current year, over 380,000TEU was transported along the Transsiberian Railway (the Transsib), 53% up year-on-year.
The President of OAO RZD Vladimir Yakunin said at the 16th meeting of the Coordinating Council for Transsiberian Transportation that transportation volumes along the Transsib between Russian and China grew by 43%, Russia and Korea by 79%, and Russia and Japan by 41%.
In the words of Vladimir Yakunin, the lion’s share of carried containers is for export and import transportation. Transit transportation is at a very low level. In spite of the progress in some areas, the main problems are as follows: an insufficient level of service, shortage of rolling stock and an uncompetitive tariff rate.
Byelorussian Railway: Export Makes 41% of Revenues
The Byelorussian Railway carried 72.1 million tons of cargo to and from other states in January – September 2007, 3.3% up year-on-year.
In 9 months of 2007, transit amounted to 35.8 million tons; the growth was 2.8%. The share of transit in international transportation of the Byelorussian Railway was 49.6%, with the Railway’s total transportation volume hitting 35%. The share of transit transportation in the Byelorussian Railway’s revenue is 38%.In January – September, the Byelorussian Railway carried 26.2 million tons of export cargo, 5.4% up year-on-year. The share of export in the volume transported by railway via the border of the Republic was 36.1%, and the Railway’s total transportation volume was 25%. The revenue from export transportation made up 41% of the total revenues from transportation fees.
In three quarters of 2007, imports fell by 0.8% to 10.1 million tons. The share of import in the revenues of the Byelorussian Railway was 12%.
New Route for Containers
OAO TransContainer launched a new route from China to Russian via the Zabaikalsk border crossing. On October 12, a block train loaded with components for Chinese GMC lorries left the Nanchannan station (China) for Moscow-Tovarnaya-Paveletskaya (Russia). The consignee is GMC Trading Rus company. The train ran via the Manchuria-Zabaikalsk border crossing and arrived in Moscow in 19 days.
“The main reason why the Chinese consignees chose our company is our technologies, the efficiency of which we have proved to our partners from the Asian and Pacific region countries. Transportation via the Transsib from the Asian and Pacific region states to the European part of Russia is much faster and safer than transportation by sea, and our block trains guarantee freight delivery on time”, said CEO of OAO TransContainer Pyotr Baskakov. In October it was planned to organise six block trains to transport 580 TEU for GMC company.
“Some Chinese car producers have already appreciated the services provided by OAO TransContainer. Twice a week, block trains run from Ningbo (China) to Verkh-Nevinsk (the Sverdlovsk region, Russia). They deliver components for Geely cars to the Urals Automobiles and Engines plant. About 1,000 TEU was transported via the route in the past two months”, he said.
Russian Railways: Plans Become True
In three quarters of 2007, the throughput of OAO RZD grew by 2.5% year-on-year to 996 million tons.
In particular, loading of profitable cargo increased by 3.5%. Loading of cars and grain grew by 32% and 23% respectively. Besides, OAO RZD loaded more metalware (+18%) and ferrous metal (+5%).
In September 2007, the throughput of OAO RZD grew by 0.2% year-on-year to 112.1 million tons.
In 9 months of 2007, the company fulfilled 60% of its investment programme, i.e. over RUR 150 billion.
The company is carrying out a number of large-scaled projects: “Infrastructure Development of the following transport directions Kuzbass – North-Western region, Kuzbass – Far Eastern transport junction, Kuzbass – the Azov and the Black Seas transport junction”; “Oil Transportation to China”; “Railway Infrastructure Modernisation on the Sakhalin Island”; “Launch of Speeded Passenger Transportation on the Route Saint Petersburg – Buslovskaya (and further to Helsinki)”; “Launch of High-Speed Passenger Transportation on the Route Saint Petersburg - Moscow”; “Launch of High-Speed Passenger Transportation on the Route Moscow – Nizhny Novgorod” etc.
Before the end of the year, OAO RZD plans to invest RUR 110 billion more into the above-mentioned projects.
Ukrzaliznytsya: Throughput Rose by 10.3%
The freight transportation volume of the Ukrainian Railway (Ukrzaliznytsya) amounted to 379.5 million tons, 9.2% (31.9 million tons) up year-on-year. The throughput increased by 10.3% or 18.1 billion t/km to 194.2 billion t/km.
In January-September of 2006 the freight transportation volume grew by 6% year-on-year (+19.6 million tons), and throughput increased by 7.8% (+12.7 billion t/km) in that period. Two years earlier, both figures were negative.
In three quarters of 2007, cargo dispatch increased by 5.7%, or 16.6 million tons, while a year earlier the figure was +4.6% (+12.8 million tons). Dispatched freight amounted to 307.9 million tons, with their share in the total transportation volume of Ukrzaliznytsya falling to 81%. In the previous year, the figure was 83.6%. The reduction was down to the consistent increase of Ukrzaliznytsya’s transit transportation share.
Kazakhstan Temir Zholy: Transit Grew by One Third
In 8 months of 2007, the transit volume carried via the territory of Kazakhstan increased by 27% year-on-year; the throughput increased by 29%.
Railway transit freight turnover grew by 29% year-on-year to 13.5 billion t/km. Transit transportation volume rose by 29% to 8 million tons. Such significant growth coincided with the distance of transportation increasing by 1%.
22% of the transit carried by Kazakhstan Temir Zholy was timber. Oil products amounted to 18%, mineral fertilisers and machine-building production made 5% each; the share of cotton, sugar and foodstuffs was 4% each. Transportation of metal goods (mainly pipes) increased by 82%, rolled ferrous metals grew by 67%. Transit of non-ferrous metal ore increased by 83%, fertilisers – by 47%, timber – by 40%. Oil products transportation growth made 46% year-on-year.
According to the assessments of Kazakhstan Temir Zholy, due to such significant figures, transit transportation will increase to 12 million tons by the end of 2007, 20% up year-on-year.
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[DETAIL_TEXT] => Estonia – Kazakhstan: Block Train Launched
On October 30, Eesti Raudtee (the Estonian Railway) launched the first block train from Tallinn to Kazakhstan. During the previous five years, containerised cargoes were delivered to Latvia, and then transported to Middle Asia by Baltika-Transit train.
Urmas Glaze, Head of Eesti Raudtee PR Service, said that the company plans to make the line a regular one and dispatch at least one train a week.
A block train consists of 20 wagons or 44 TEU. Delivery time is one week.
The advantage of block trains in comparison with road transport is evident today: they can cross the overloaded Russian border in the shortest time possible.
The Baltic States’ Ports: Growth Is Minimal
The throughput of the Baltic States’ ports amounted to 106.876 million tons of freight in January – September 2007, 2.4% up year-on-year.
44.1% of the cargo was handled in the Latvian ports, 33.2% and 22.6% were serviced in the Estonian and Lithuanian ports respectively. During nine months of 2007, the ports of Latvia handled 47.165 million tons of cargo, 4.1% up year-on-year. The throughput of the Estonian ports grew by 4.2% year-on-year to 35.526 million tons. The Lithuanian ports services 24.185 million tons, 9.9% up in comparison with January-September 2006.
The most cargo was handled in the port of Tallinn – 28.654 million tons, 6.6% down year-on-year. The port of Ventspils serviced 23.865 million tons (+8.6%). The throughput of the Klaipeda port increased by 16.5% to 20.417 million tons.
Grain Loading Will Increase by 25% in 2007
OAO RZD (Russian Railways JSC) forecasts that the volume of grain loading at the railways may amount to 22-23 million tons in 2007, 25% up year-on-year.
According to the forecasts of specialists at OAO RZD, 12-13 million tons will be loaded for domestic transportation. About 10 million tons will be carried for export by railway transport.
The adopted plan of grain loading by Russian Railways amounts to 1.25 wagons daily, 20.6% up year-on-year.
The enlarged volume of grain for transportation was prompted by the decision of the RF Government to implement 10% and 30% customs dues on wheat and barley export respectively as well as putting tradable interventions into operation.
Georgian Railway: Freight Transportation Structure
In January – August 2007, the Georgian Railway carried 14.6 million tons of freight, 87% of which was freight for international transportation.
Oil and products made 52.7% of the transported volume, and the share of dry cargo was 47.3%. The largest part of the latter was construction materials, grain, sugar, ferrous metal (including metal scrap), bauxites and argil.
Transit made 65.2% of the total freight volume carried by the railway. The share of import cargo was about 16%, with export share at 6.4%. Most international transportation was to and from Azerbaijan (over 62% of international transportation) and Armenia (11%). The share of Russian Railways was 5.9%, and that of Ukrzaliznytsya (the Ukrainian Railway) was 5.4%, with Kazakhstan at 1.6%.
Specialists at the Georgian Railway point out that use of Poti/Batumi – port Caucasus sector for transportation along the line will increase the volume of the Georgian Railway’s international transportation.
Ukrainian Sea Ports: Throughput Rose by 10%
The 19 commercial sea ports of Ukraine handled 92.598 million tons of freight in 9 months of 2007, 10.34% up year-on-year. Transit made the larger part of the growth, while export fell by over 2 million tons.
In three quarters of 2007, export handling fell by 5.31% year-on-year to 40.616 million tons. Export throughput volume dropped in the ports of Odessa, Ilyichevsk, and Yuzhny, as well as Nikolaev, Kherson, Reni and Izmail. Meanwhile, the port of Mariupol increased export handling by 12.33%. In 9 months of 2006, its export cargo servicing grew by 8.8%.
Transit transportation via the ports continues to increase fast. In January – September 2006, the growth was 9.6%, and in 9 months of the current year it amounted to 23.93%. Such an increase (+7.64 million tons) is a record for the Ukrainian port sector. The factor making the progress more stable is the balanced growth of transit constituents – dry cargo (+23.3%) and liquid bulk (+28.3%).
A similar trend of balanced growth has appeared in the import cargo handling sector. Dry cargo handling increased by 30.4%, and liquid bulk volume rose by 67.4%. As a result, import grew by 30.4% year-on-year to 8.499 million tons. A characteristic feature was a sudden and significant increase of import volume in the ports of Kerch and Yuzhny (eightfold growth), Berdyansk (fourfold increase), Kherson (threefold growth), and Feodossiya (by 1.5 times).
The Transsib: Transit Container Transportation at a Low Level
In 8 months of the current year, over 380,000TEU was transported along the Transsiberian Railway (the Transsib), 53% up year-on-year.
The President of OAO RZD Vladimir Yakunin said at the 16th meeting of the Coordinating Council for Transsiberian Transportation that transportation volumes along the Transsib between Russian and China grew by 43%, Russia and Korea by 79%, and Russia and Japan by 41%.
In the words of Vladimir Yakunin, the lion’s share of carried containers is for export and import transportation. Transit transportation is at a very low level. In spite of the progress in some areas, the main problems are as follows: an insufficient level of service, shortage of rolling stock and an uncompetitive tariff rate.
Byelorussian Railway: Export Makes 41% of Revenues
The Byelorussian Railway carried 72.1 million tons of cargo to and from other states in January – September 2007, 3.3% up year-on-year.
In 9 months of 2007, transit amounted to 35.8 million tons; the growth was 2.8%. The share of transit in international transportation of the Byelorussian Railway was 49.6%, with the Railway’s total transportation volume hitting 35%. The share of transit transportation in the Byelorussian Railway’s revenue is 38%.In January – September, the Byelorussian Railway carried 26.2 million tons of export cargo, 5.4% up year-on-year. The share of export in the volume transported by railway via the border of the Republic was 36.1%, and the Railway’s total transportation volume was 25%. The revenue from export transportation made up 41% of the total revenues from transportation fees.
In three quarters of 2007, imports fell by 0.8% to 10.1 million tons. The share of import in the revenues of the Byelorussian Railway was 12%.
New Route for Containers
OAO TransContainer launched a new route from China to Russian via the Zabaikalsk border crossing. On October 12, a block train loaded with components for Chinese GMC lorries left the Nanchannan station (China) for Moscow-Tovarnaya-Paveletskaya (Russia). The consignee is GMC Trading Rus company. The train ran via the Manchuria-Zabaikalsk border crossing and arrived in Moscow in 19 days.
“The main reason why the Chinese consignees chose our company is our technologies, the efficiency of which we have proved to our partners from the Asian and Pacific region countries. Transportation via the Transsib from the Asian and Pacific region states to the European part of Russia is much faster and safer than transportation by sea, and our block trains guarantee freight delivery on time”, said CEO of OAO TransContainer Pyotr Baskakov. In October it was planned to organise six block trains to transport 580 TEU for GMC company.
“Some Chinese car producers have already appreciated the services provided by OAO TransContainer. Twice a week, block trains run from Ningbo (China) to Verkh-Nevinsk (the Sverdlovsk region, Russia). They deliver components for Geely cars to the Urals Automobiles and Engines plant. About 1,000 TEU was transported via the route in the past two months”, he said.
Russian Railways: Plans Become True
In three quarters of 2007, the throughput of OAO RZD grew by 2.5% year-on-year to 996 million tons.
In particular, loading of profitable cargo increased by 3.5%. Loading of cars and grain grew by 32% and 23% respectively. Besides, OAO RZD loaded more metalware (+18%) and ferrous metal (+5%).
In September 2007, the throughput of OAO RZD grew by 0.2% year-on-year to 112.1 million tons.
In 9 months of 2007, the company fulfilled 60% of its investment programme, i.e. over RUR 150 billion.
The company is carrying out a number of large-scaled projects: “Infrastructure Development of the following transport directions Kuzbass – North-Western region, Kuzbass – Far Eastern transport junction, Kuzbass – the Azov and the Black Seas transport junction”; “Oil Transportation to China”; “Railway Infrastructure Modernisation on the Sakhalin Island”; “Launch of Speeded Passenger Transportation on the Route Saint Petersburg – Buslovskaya (and further to Helsinki)”; “Launch of High-Speed Passenger Transportation on the Route Saint Petersburg - Moscow”; “Launch of High-Speed Passenger Transportation on the Route Moscow – Nizhny Novgorod” etc.
Before the end of the year, OAO RZD plans to invest RUR 110 billion more into the above-mentioned projects.
Ukrzaliznytsya: Throughput Rose by 10.3%
The freight transportation volume of the Ukrainian Railway (Ukrzaliznytsya) amounted to 379.5 million tons, 9.2% (31.9 million tons) up year-on-year. The throughput increased by 10.3% or 18.1 billion t/km to 194.2 billion t/km.
In January-September of 2006 the freight transportation volume grew by 6% year-on-year (+19.6 million tons), and throughput increased by 7.8% (+12.7 billion t/km) in that period. Two years earlier, both figures were negative.
In three quarters of 2007, cargo dispatch increased by 5.7%, or 16.6 million tons, while a year earlier the figure was +4.6% (+12.8 million tons). Dispatched freight amounted to 307.9 million tons, with their share in the total transportation volume of Ukrzaliznytsya falling to 81%. In the previous year, the figure was 83.6%. The reduction was down to the consistent increase of Ukrzaliznytsya’s transit transportation share.
Kazakhstan Temir Zholy: Transit Grew by One Third
In 8 months of 2007, the transit volume carried via the territory of Kazakhstan increased by 27% year-on-year; the throughput increased by 29%.
Railway transit freight turnover grew by 29% year-on-year to 13.5 billion t/km. Transit transportation volume rose by 29% to 8 million tons. Such significant growth coincided with the distance of transportation increasing by 1%.
22% of the transit carried by Kazakhstan Temir Zholy was timber. Oil products amounted to 18%, mineral fertilisers and machine-building production made 5% each; the share of cotton, sugar and foodstuffs was 4% each. Transportation of metal goods (mainly pipes) increased by 82%, rolled ferrous metals grew by 67%. Transit of non-ferrous metal ore increased by 83%, fertilisers – by 47%, timber – by 40%. Oil products transportation growth made 46% year-on-year.
According to the assessments of Kazakhstan Temir Zholy, due to such significant figures, transit transportation will increase to 12 million tons by the end of 2007, 20% up year-on-year.
[~DETAIL_TEXT] => Estonia – Kazakhstan: Block Train Launched
On October 30, Eesti Raudtee (the Estonian Railway) launched the first block train from Tallinn to Kazakhstan. During the previous five years, containerised cargoes were delivered to Latvia, and then transported to Middle Asia by Baltika-Transit train.
Urmas Glaze, Head of Eesti Raudtee PR Service, said that the company plans to make the line a regular one and dispatch at least one train a week.
A block train consists of 20 wagons or 44 TEU. Delivery time is one week.
The advantage of block trains in comparison with road transport is evident today: they can cross the overloaded Russian border in the shortest time possible.
The Baltic States’ Ports: Growth Is Minimal
The throughput of the Baltic States’ ports amounted to 106.876 million tons of freight in January – September 2007, 2.4% up year-on-year.
44.1% of the cargo was handled in the Latvian ports, 33.2% and 22.6% were serviced in the Estonian and Lithuanian ports respectively. During nine months of 2007, the ports of Latvia handled 47.165 million tons of cargo, 4.1% up year-on-year. The throughput of the Estonian ports grew by 4.2% year-on-year to 35.526 million tons. The Lithuanian ports services 24.185 million tons, 9.9% up in comparison with January-September 2006.
The most cargo was handled in the port of Tallinn – 28.654 million tons, 6.6% down year-on-year. The port of Ventspils serviced 23.865 million tons (+8.6%). The throughput of the Klaipeda port increased by 16.5% to 20.417 million tons.
Grain Loading Will Increase by 25% in 2007
OAO RZD (Russian Railways JSC) forecasts that the volume of grain loading at the railways may amount to 22-23 million tons in 2007, 25% up year-on-year.
According to the forecasts of specialists at OAO RZD, 12-13 million tons will be loaded for domestic transportation. About 10 million tons will be carried for export by railway transport.
The adopted plan of grain loading by Russian Railways amounts to 1.25 wagons daily, 20.6% up year-on-year.
The enlarged volume of grain for transportation was prompted by the decision of the RF Government to implement 10% and 30% customs dues on wheat and barley export respectively as well as putting tradable interventions into operation.
Georgian Railway: Freight Transportation Structure
In January – August 2007, the Georgian Railway carried 14.6 million tons of freight, 87% of which was freight for international transportation.
Oil and products made 52.7% of the transported volume, and the share of dry cargo was 47.3%. The largest part of the latter was construction materials, grain, sugar, ferrous metal (including metal scrap), bauxites and argil.
Transit made 65.2% of the total freight volume carried by the railway. The share of import cargo was about 16%, with export share at 6.4%. Most international transportation was to and from Azerbaijan (over 62% of international transportation) and Armenia (11%). The share of Russian Railways was 5.9%, and that of Ukrzaliznytsya (the Ukrainian Railway) was 5.4%, with Kazakhstan at 1.6%.
Specialists at the Georgian Railway point out that use of Poti/Batumi – port Caucasus sector for transportation along the line will increase the volume of the Georgian Railway’s international transportation.
Ukrainian Sea Ports: Throughput Rose by 10%
The 19 commercial sea ports of Ukraine handled 92.598 million tons of freight in 9 months of 2007, 10.34% up year-on-year. Transit made the larger part of the growth, while export fell by over 2 million tons.
In three quarters of 2007, export handling fell by 5.31% year-on-year to 40.616 million tons. Export throughput volume dropped in the ports of Odessa, Ilyichevsk, and Yuzhny, as well as Nikolaev, Kherson, Reni and Izmail. Meanwhile, the port of Mariupol increased export handling by 12.33%. In 9 months of 2006, its export cargo servicing grew by 8.8%.
Transit transportation via the ports continues to increase fast. In January – September 2006, the growth was 9.6%, and in 9 months of the current year it amounted to 23.93%. Such an increase (+7.64 million tons) is a record for the Ukrainian port sector. The factor making the progress more stable is the balanced growth of transit constituents – dry cargo (+23.3%) and liquid bulk (+28.3%).
A similar trend of balanced growth has appeared in the import cargo handling sector. Dry cargo handling increased by 30.4%, and liquid bulk volume rose by 67.4%. As a result, import grew by 30.4% year-on-year to 8.499 million tons. A characteristic feature was a sudden and significant increase of import volume in the ports of Kerch and Yuzhny (eightfold growth), Berdyansk (fourfold increase), Kherson (threefold growth), and Feodossiya (by 1.5 times).
The Transsib: Transit Container Transportation at a Low Level
In 8 months of the current year, over 380,000TEU was transported along the Transsiberian Railway (the Transsib), 53% up year-on-year.
The President of OAO RZD Vladimir Yakunin said at the 16th meeting of the Coordinating Council for Transsiberian Transportation that transportation volumes along the Transsib between Russian and China grew by 43%, Russia and Korea by 79%, and Russia and Japan by 41%.
In the words of Vladimir Yakunin, the lion’s share of carried containers is for export and import transportation. Transit transportation is at a very low level. In spite of the progress in some areas, the main problems are as follows: an insufficient level of service, shortage of rolling stock and an uncompetitive tariff rate.
Byelorussian Railway: Export Makes 41% of Revenues
The Byelorussian Railway carried 72.1 million tons of cargo to and from other states in January – September 2007, 3.3% up year-on-year.
In 9 months of 2007, transit amounted to 35.8 million tons; the growth was 2.8%. The share of transit in international transportation of the Byelorussian Railway was 49.6%, with the Railway’s total transportation volume hitting 35%. The share of transit transportation in the Byelorussian Railway’s revenue is 38%.In January – September, the Byelorussian Railway carried 26.2 million tons of export cargo, 5.4% up year-on-year. The share of export in the volume transported by railway via the border of the Republic was 36.1%, and the Railway’s total transportation volume was 25%. The revenue from export transportation made up 41% of the total revenues from transportation fees.
In three quarters of 2007, imports fell by 0.8% to 10.1 million tons. The share of import in the revenues of the Byelorussian Railway was 12%.
New Route for Containers
OAO TransContainer launched a new route from China to Russian via the Zabaikalsk border crossing. On October 12, a block train loaded with components for Chinese GMC lorries left the Nanchannan station (China) for Moscow-Tovarnaya-Paveletskaya (Russia). The consignee is GMC Trading Rus company. The train ran via the Manchuria-Zabaikalsk border crossing and arrived in Moscow in 19 days.
“The main reason why the Chinese consignees chose our company is our technologies, the efficiency of which we have proved to our partners from the Asian and Pacific region countries. Transportation via the Transsib from the Asian and Pacific region states to the European part of Russia is much faster and safer than transportation by sea, and our block trains guarantee freight delivery on time”, said CEO of OAO TransContainer Pyotr Baskakov. In October it was planned to organise six block trains to transport 580 TEU for GMC company.
“Some Chinese car producers have already appreciated the services provided by OAO TransContainer. Twice a week, block trains run from Ningbo (China) to Verkh-Nevinsk (the Sverdlovsk region, Russia). They deliver components for Geely cars to the Urals Automobiles and Engines plant. About 1,000 TEU was transported via the route in the past two months”, he said.
Russian Railways: Plans Become True
In three quarters of 2007, the throughput of OAO RZD grew by 2.5% year-on-year to 996 million tons.
In particular, loading of profitable cargo increased by 3.5%. Loading of cars and grain grew by 32% and 23% respectively. Besides, OAO RZD loaded more metalware (+18%) and ferrous metal (+5%).
In September 2007, the throughput of OAO RZD grew by 0.2% year-on-year to 112.1 million tons.
In 9 months of 2007, the company fulfilled 60% of its investment programme, i.e. over RUR 150 billion.
The company is carrying out a number of large-scaled projects: “Infrastructure Development of the following transport directions Kuzbass – North-Western region, Kuzbass – Far Eastern transport junction, Kuzbass – the Azov and the Black Seas transport junction”; “Oil Transportation to China”; “Railway Infrastructure Modernisation on the Sakhalin Island”; “Launch of Speeded Passenger Transportation on the Route Saint Petersburg – Buslovskaya (and further to Helsinki)”; “Launch of High-Speed Passenger Transportation on the Route Saint Petersburg - Moscow”; “Launch of High-Speed Passenger Transportation on the Route Moscow – Nizhny Novgorod” etc.
Before the end of the year, OAO RZD plans to invest RUR 110 billion more into the above-mentioned projects.
Ukrzaliznytsya: Throughput Rose by 10.3%
The freight transportation volume of the Ukrainian Railway (Ukrzaliznytsya) amounted to 379.5 million tons, 9.2% (31.9 million tons) up year-on-year. The throughput increased by 10.3% or 18.1 billion t/km to 194.2 billion t/km.
In January-September of 2006 the freight transportation volume grew by 6% year-on-year (+19.6 million tons), and throughput increased by 7.8% (+12.7 billion t/km) in that period. Two years earlier, both figures were negative.
In three quarters of 2007, cargo dispatch increased by 5.7%, or 16.6 million tons, while a year earlier the figure was +4.6% (+12.8 million tons). Dispatched freight amounted to 307.9 million tons, with their share in the total transportation volume of Ukrzaliznytsya falling to 81%. In the previous year, the figure was 83.6%. The reduction was down to the consistent increase of Ukrzaliznytsya’s transit transportation share.
Kazakhstan Temir Zholy: Transit Grew by One Third
In 8 months of 2007, the transit volume carried via the territory of Kazakhstan increased by 27% year-on-year; the throughput increased by 29%.
Railway transit freight turnover grew by 29% year-on-year to 13.5 billion t/km. Transit transportation volume rose by 29% to 8 million tons. Such significant growth coincided with the distance of transportation increasing by 1%.
22% of the transit carried by Kazakhstan Temir Zholy was timber. Oil products amounted to 18%, mineral fertilisers and machine-building production made 5% each; the share of cotton, sugar and foodstuffs was 4% each. Transportation of metal goods (mainly pipes) increased by 82%, rolled ferrous metals grew by 67%. Transit of non-ferrous metal ore increased by 83%, fertilisers – by 47%, timber – by 40%. Oil products transportation growth made 46% year-on-year.
According to the assessments of Kazakhstan Temir Zholy, due to such significant figures, transit transportation will increase to 12 million tons by the end of 2007, 20% up year-on-year.
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[DETAIL_TEXT] => Education System Falls Behind Business
The RZD-Partner International magazine and A DAN DZO company polled four-dozen heads of logistics and HR services and CEOs of different companies. According to the results of the poll, graduates from higher educational institutions specialising in logistics do not satisfy their employers. In the words of LTL group of companies Director Alexey Dotsenko, the main reason for the dissatisfaction is the fact that studying logistics in higher educational institutions “as the main specialisation is far from the requirements of specialists operating in the practical market”. “They know the theory, but when they face some definite real problem, they are at a loss, because the logistics technologies are not taught properly”, believes Salavat Mukhitdinov, Deputy Director of Economy of OOO TOREKS (Intersport retail network). The Logistic Department Head of Bayer company, Maria Kanaeva, shares this opinion, “four-year students come and start to speak about the definition of the company’s logistic mission. Meanwhile, they do not know how to order transport. It is terrible. A logistician is expected to optimise the cost and deliveries. Unfortunately, they do not study it in Russian higher education institutions”.
Alexey Ovchinnikov, Head of the Logistics Department of Serdicks pharmaceutical company (Servier group) highlights another aspect of the problem. In his words, “graduates do not understand logistics as a single system to manage material flows; everything is separated in their minds – transport, warehouses, production and planning”. Since the specialists coming to a company right after their graduation from a higher education institution have no idea of the processes carried out in real companies, of the consequences of improper fulfilment of the set tasks, it is complicated for them to understand how important their activities are”, comments the Head of Logistic Service of Bureaucrat network, Pavel Balyasnikov, on the problems faced by cargo owners and traders.
“Our company works on the international market, so our employees are to know the English language. Russian higher education institution graduates, who did not study in language schools, can rarely speak English well”, Irina Malinkovskaya, HR Director of Major Cargo Service emphasises the huge problems in higher education as well as further education.
There is another objective reason for which higher education institutions cannot train the necessary amount of qualified specialists. Few teachers know about the latest IT technologies. Young specialists are not eager to become teachers because of the small salary. Partly, the problem is being solved by means of master classes held by sectoral specialists, but there are few such people, they are usually very busy and have little time for it. President of Transsphere group of companies Sergey Shidlovsky says that he is ready to teach, but business in Russia requires constant attention. “Due to my experience, I know where there may be a failure, and I am ready to prevent it. Meanwhile, in such a situation, it is impossible to find time to share my knowledge accumulated during 10 years of work in the logistics sector”.
According to the results of the poll, representatives of higher school and further education understand the position of the business and have a clear vision of the direction in which the education system should develop. They appeal to business as the basic carrier of unique knowledge, technologies and skills.
“I believe that the first education (bachelor) can give hardly any definite practical skills in logistics. In four years a young man can hardly learn how to manage logistic business processes. There should be a practical constituent in the education process (formation of skills). That way, businesses can help to form specialist-logisticians in four-year education”, considers manager of The Open University of Business and Technologies Maxim Ivanov. The next offer may be the implementation of certification. Logisticians may be given a certificate, and this process could be controlled by a self-regulated organisation in the logistics sector. To get a certificate a logistician must pass a special test and fulfill practical tasks.
The viewpoint of Natalya Kireeva, a candidate of Economics and an associate professor of Logistics at the Plekhanov Russian Economic Academy, is very interesting. She notes that the experiment of logistics specialist training started in 2000, and the standards of specialists training and the educational programmes were developed in accordance with the latest logistics and education technologies. So to say that the educational system falls behind the sectoral demands is not correct. Moreover, at the cutting edge of logistics development, the base of knowledge the graduates have is not in demand in Russia yet. “As for the dissatisfaction of companies’ representatives with the level of graduates, there is the same situation in other sectors. Every company has its own peculiarities, and consequently, its own requirements to graduates. And higher education institutions can hardly fulfill all of the requirements. In some countries, specialists are trained by companies themselves”, stresses N. Kireeva.
Teach What and How? Many Questions, Few Answers
Logisticians do not act as a dissatisfied and quarrelsome consumer of educational services. They have ideas on how to improve the education process. In fact, they are interested in it. Frank Mueller, CEO of AsstrA Group of Companies, says he would be glad to give a short-term course to future logisticians, who would receive basic knowledge about transport, client-orientation, ability to provide qualified services and ethics. Partner of BestLog consulting company Sergey Bubnov wants “studying youngsters to wish and the higher schools’ top-management to provide training at real enterprises (foreign, Russian and mixed ones). Such trainings should be paid for by the state or the enterprise in order to improve the quality of education, and to get skilled employees”.
A specialist of Supplies Department of MasterLand company Georgy Legeza also speaks about the necessity of training in foreign and Russian companies. In his opinion, teachers with practical experience of work in an enterprise should be attracted to the further education sector and give their audience more practical knowledge. Yrysbek Tashbaev from STS Logistics offers the following measures: to start training at the second year in university, and the ratio of theory and practice in the educational plans must be 50/50. “Advanced students should be given individual scholarships by the companies. Much attention should be paid to the professional training of logistic teachers, and use such methods as analysis of practical situations more often”, believes the expert.
Corporate Universities
If some knowledge is not given in a university or in an institute, they have to be taught at an enterprise. “One can hardly expect young specialists coming to a company to be able to meet the market requirements. At personnel selection, we evaluate the knowledge of the candidates as well as their personal qualities, i.e. energies, commutability, eagerness to self-improve and flexible brainwork. The employees meeting the requirements may be taught successfully in the company. And we stake everything on that”, says E. Marchenko from AsstrA. The methods include thematic seminars, educational intracorporate programmes, adaptation programmes, and attraction of external experts. Besides, twice a year every employee of AsstrA must undergo external training concerning practical aspects of their activities.
To train is much cheaper than to employ highly-paid specialists fired from competing companies, says President of Russian Logistic Service company Kirill Vlasov. His company provides additional training by means of its own specialists as well as customers’ ones.
In words of Andrey Stoyko, Logistic Director of OOO Yurinat, his company uses modern equipment and software. In particular, it uses WMS (warehouse management system). Meanwhile, universities and institutes teach students how to use rather old programmes “1C-Warehouse”, BEST, “Sail”. So there is no alternative but to teach specialists in the company. Commercial Director of Terminal K company, which also uses WMS, Roman Konyakhin has a similar problem. “No new employee has skills in how to work with the data collection terminals”, he says.
There are many corporate education methods. Most companies, which took part in the poll, choose professional seminars and conferences. The programme of BestLog envisages study of application-oriented literature, participation in specialised forums, exhibitions and conferences. OAO Mobile Telesystems pays for its specialists’ short-term study in the Higher School of Economics. Alexey Ovchinnikov from Servier uses his own programmes to teach new employees. Company Major has not only seminars but also a single multi-level system for English language studying. Its employees are tested monthly.
Andrey Nedvetsky, CEO of Showtime company, says that for him it is enough if a new employee has basic knowledge, a clear vision of what he will do in the company, and speak a foreign language. The rest of the necessary knowledge and skills he will be taught in the company.
The forms of additional education are also different. To conclude, most companies, both logistic and transport operators and cargo owners, have their own education system with preliminary planning and final product standards, and whether an employee meets them shows in the “exams”.
In LTL, the head of departments are responsible for professional training. In a month after an employee started his work, a certification is held to find out if he may occupy the position, and his responsibilities grow. In Terminal K, a plan of the personnel’s qualification improvement is developed at the end of every year. And Major has developed a complicated training system. The first stage envisages an introduction, during which a newcomer learns the structure, mission and strategy of the company, targets, aims, key priorities and the principles of work. At the second stage, the new employee works at his workplace guided by a more experienced colleague. In the company there is an inner auditorium, where the employees learn about transportation by all the transport modes, warehousing, customs clearance, etc. And in the educational centre, there are regular training sessions held by external professionals and the company’s ones. If necessary, the personnel go in for special courses and seminars devoted to logistics.
Let’s Call Foreign Specialists?
Answering a question about how and where they look for the employees, representatives of several companies said they cooperate with higher schools and communicate with senior students. And in the process of communication, the students learn the peculiar features of the business. Another type of cooperation, that would enable business and teachers to organise a dialogue and understand each other’s needs, is regular joint events, i.e. scientific and practical conferences devoted to training specialists in logistics.
And there is one more way out – to hire a foreign specialist. There are many different opinions on it (some of them you can read in the article): some specialists consider that a foreigner does not know the specific features of Russia, and regardless of experience, his work will not be efficient; others think that Russian companies may get use from learning from the experience of logistics organisation in developed countries. It is a paradox, but it is possible to make only one conclusion of all the opinions: professionals from other states have a promising future in Russia. One of the reasons for it is the growing demand for highly-qualified specialists, and the insufficient supply.
By Ivan Stupachenko
viewpoint
Maria Kanaeva,
Logistic Department Head, Bayer company:
– I believe, employing foreigners is not efficient because logistics in Russia have many specific features due to many reasons: area, level of logistic services, peculiarities of legislation and mentality. But organisation of seminars by foreign colleagues to share their experience so that it could be adopted to Russian realities is very useful.
Sergey Bubnov,
Managing Partner, BestLog consulting company:
– I think it is worth hiring foreigners for the company’s development on the whole. Nevertheless, the peculiarities of Russian managers’ mentality will hardly make it possible to put into operation the models of logistic management as they are in other countries. It may occur only either in foreign enterprises, operating in Russia in accordance with their own culture and standards, or in joint ventures.
Andrey Nedvetsky,
CEO, Showtime company:
– I consider usage of foreign experience is rather popular nowadays. But a foreign specialist must always be accompanied by a Russian colleague, adapting the experience to the realities of life in Russia.
Mikhail Miller,
Director of Logistic Services Sales, Alidi group of companies:
- Personally I don’t know any examples of successful work of foreign logistic specialists in Russia. I am not sure it can be a success. Russian mentality, breeding, education – all the factors will inevitably put “unrecoverable” corrections into any foreign technology. As a rule, all such technologies should be adapted in accordance with the specific feature of our personnel.
Dmitry Ushakov,
Head of Intermodal Transportation Department, OOO Reftransportation Agency:
- Naturally, consultation of foreign logistics specialists is very interesting and important for Russian companies. As for organisation of regular operative and strategic management by foreign managers in a Russian company, I think a foreigner cannot fulfill it properly without knowing all the specifics of Russian transport activities and realities.
Elena Gorislavets,
Logistics Director, Centroobuv company:
- Employing a foreign specialist is reasonable to organise strategic management and make suggestions and recommendations for changes in the operative management and HR training. But the operative management must be provided by specialists familiar with the specifics and national peculiarities of the sector.
[~DETAIL_TEXT] => Education System Falls Behind Business
The RZD-Partner International magazine and A DAN DZO company polled four-dozen heads of logistics and HR services and CEOs of different companies. According to the results of the poll, graduates from higher educational institutions specialising in logistics do not satisfy their employers. In the words of LTL group of companies Director Alexey Dotsenko, the main reason for the dissatisfaction is the fact that studying logistics in higher educational institutions “as the main specialisation is far from the requirements of specialists operating in the practical market”. “They know the theory, but when they face some definite real problem, they are at a loss, because the logistics technologies are not taught properly”, believes Salavat Mukhitdinov, Deputy Director of Economy of OOO TOREKS (Intersport retail network). The Logistic Department Head of Bayer company, Maria Kanaeva, shares this opinion, “four-year students come and start to speak about the definition of the company’s logistic mission. Meanwhile, they do not know how to order transport. It is terrible. A logistician is expected to optimise the cost and deliveries. Unfortunately, they do not study it in Russian higher education institutions”.
Alexey Ovchinnikov, Head of the Logistics Department of Serdicks pharmaceutical company (Servier group) highlights another aspect of the problem. In his words, “graduates do not understand logistics as a single system to manage material flows; everything is separated in their minds – transport, warehouses, production and planning”. Since the specialists coming to a company right after their graduation from a higher education institution have no idea of the processes carried out in real companies, of the consequences of improper fulfilment of the set tasks, it is complicated for them to understand how important their activities are”, comments the Head of Logistic Service of Bureaucrat network, Pavel Balyasnikov, on the problems faced by cargo owners and traders.
“Our company works on the international market, so our employees are to know the English language. Russian higher education institution graduates, who did not study in language schools, can rarely speak English well”, Irina Malinkovskaya, HR Director of Major Cargo Service emphasises the huge problems in higher education as well as further education.
There is another objective reason for which higher education institutions cannot train the necessary amount of qualified specialists. Few teachers know about the latest IT technologies. Young specialists are not eager to become teachers because of the small salary. Partly, the problem is being solved by means of master classes held by sectoral specialists, but there are few such people, they are usually very busy and have little time for it. President of Transsphere group of companies Sergey Shidlovsky says that he is ready to teach, but business in Russia requires constant attention. “Due to my experience, I know where there may be a failure, and I am ready to prevent it. Meanwhile, in such a situation, it is impossible to find time to share my knowledge accumulated during 10 years of work in the logistics sector”.
According to the results of the poll, representatives of higher school and further education understand the position of the business and have a clear vision of the direction in which the education system should develop. They appeal to business as the basic carrier of unique knowledge, technologies and skills.
“I believe that the first education (bachelor) can give hardly any definite practical skills in logistics. In four years a young man can hardly learn how to manage logistic business processes. There should be a practical constituent in the education process (formation of skills). That way, businesses can help to form specialist-logisticians in four-year education”, considers manager of The Open University of Business and Technologies Maxim Ivanov. The next offer may be the implementation of certification. Logisticians may be given a certificate, and this process could be controlled by a self-regulated organisation in the logistics sector. To get a certificate a logistician must pass a special test and fulfill practical tasks.
The viewpoint of Natalya Kireeva, a candidate of Economics and an associate professor of Logistics at the Plekhanov Russian Economic Academy, is very interesting. She notes that the experiment of logistics specialist training started in 2000, and the standards of specialists training and the educational programmes were developed in accordance with the latest logistics and education technologies. So to say that the educational system falls behind the sectoral demands is not correct. Moreover, at the cutting edge of logistics development, the base of knowledge the graduates have is not in demand in Russia yet. “As for the dissatisfaction of companies’ representatives with the level of graduates, there is the same situation in other sectors. Every company has its own peculiarities, and consequently, its own requirements to graduates. And higher education institutions can hardly fulfill all of the requirements. In some countries, specialists are trained by companies themselves”, stresses N. Kireeva.
Teach What and How? Many Questions, Few Answers
Logisticians do not act as a dissatisfied and quarrelsome consumer of educational services. They have ideas on how to improve the education process. In fact, they are interested in it. Frank Mueller, CEO of AsstrA Group of Companies, says he would be glad to give a short-term course to future logisticians, who would receive basic knowledge about transport, client-orientation, ability to provide qualified services and ethics. Partner of BestLog consulting company Sergey Bubnov wants “studying youngsters to wish and the higher schools’ top-management to provide training at real enterprises (foreign, Russian and mixed ones). Such trainings should be paid for by the state or the enterprise in order to improve the quality of education, and to get skilled employees”.
A specialist of Supplies Department of MasterLand company Georgy Legeza also speaks about the necessity of training in foreign and Russian companies. In his opinion, teachers with practical experience of work in an enterprise should be attracted to the further education sector and give their audience more practical knowledge. Yrysbek Tashbaev from STS Logistics offers the following measures: to start training at the second year in university, and the ratio of theory and practice in the educational plans must be 50/50. “Advanced students should be given individual scholarships by the companies. Much attention should be paid to the professional training of logistic teachers, and use such methods as analysis of practical situations more often”, believes the expert.
Corporate Universities
If some knowledge is not given in a university or in an institute, they have to be taught at an enterprise. “One can hardly expect young specialists coming to a company to be able to meet the market requirements. At personnel selection, we evaluate the knowledge of the candidates as well as their personal qualities, i.e. energies, commutability, eagerness to self-improve and flexible brainwork. The employees meeting the requirements may be taught successfully in the company. And we stake everything on that”, says E. Marchenko from AsstrA. The methods include thematic seminars, educational intracorporate programmes, adaptation programmes, and attraction of external experts. Besides, twice a year every employee of AsstrA must undergo external training concerning practical aspects of their activities.
To train is much cheaper than to employ highly-paid specialists fired from competing companies, says President of Russian Logistic Service company Kirill Vlasov. His company provides additional training by means of its own specialists as well as customers’ ones.
In words of Andrey Stoyko, Logistic Director of OOO Yurinat, his company uses modern equipment and software. In particular, it uses WMS (warehouse management system). Meanwhile, universities and institutes teach students how to use rather old programmes “1C-Warehouse”, BEST, “Sail”. So there is no alternative but to teach specialists in the company. Commercial Director of Terminal K company, which also uses WMS, Roman Konyakhin has a similar problem. “No new employee has skills in how to work with the data collection terminals”, he says.
There are many corporate education methods. Most companies, which took part in the poll, choose professional seminars and conferences. The programme of BestLog envisages study of application-oriented literature, participation in specialised forums, exhibitions and conferences. OAO Mobile Telesystems pays for its specialists’ short-term study in the Higher School of Economics. Alexey Ovchinnikov from Servier uses his own programmes to teach new employees. Company Major has not only seminars but also a single multi-level system for English language studying. Its employees are tested monthly.
Andrey Nedvetsky, CEO of Showtime company, says that for him it is enough if a new employee has basic knowledge, a clear vision of what he will do in the company, and speak a foreign language. The rest of the necessary knowledge and skills he will be taught in the company.
The forms of additional education are also different. To conclude, most companies, both logistic and transport operators and cargo owners, have their own education system with preliminary planning and final product standards, and whether an employee meets them shows in the “exams”.
In LTL, the head of departments are responsible for professional training. In a month after an employee started his work, a certification is held to find out if he may occupy the position, and his responsibilities grow. In Terminal K, a plan of the personnel’s qualification improvement is developed at the end of every year. And Major has developed a complicated training system. The first stage envisages an introduction, during which a newcomer learns the structure, mission and strategy of the company, targets, aims, key priorities and the principles of work. At the second stage, the new employee works at his workplace guided by a more experienced colleague. In the company there is an inner auditorium, where the employees learn about transportation by all the transport modes, warehousing, customs clearance, etc. And in the educational centre, there are regular training sessions held by external professionals and the company’s ones. If necessary, the personnel go in for special courses and seminars devoted to logistics.
Let’s Call Foreign Specialists?
Answering a question about how and where they look for the employees, representatives of several companies said they cooperate with higher schools and communicate with senior students. And in the process of communication, the students learn the peculiar features of the business. Another type of cooperation, that would enable business and teachers to organise a dialogue and understand each other’s needs, is regular joint events, i.e. scientific and practical conferences devoted to training specialists in logistics.
And there is one more way out – to hire a foreign specialist. There are many different opinions on it (some of them you can read in the article): some specialists consider that a foreigner does not know the specific features of Russia, and regardless of experience, his work will not be efficient; others think that Russian companies may get use from learning from the experience of logistics organisation in developed countries. It is a paradox, but it is possible to make only one conclusion of all the opinions: professionals from other states have a promising future in Russia. One of the reasons for it is the growing demand for highly-qualified specialists, and the insufficient supply.
By Ivan Stupachenko
viewpoint
Maria Kanaeva,
Logistic Department Head, Bayer company:
– I believe, employing foreigners is not efficient because logistics in Russia have many specific features due to many reasons: area, level of logistic services, peculiarities of legislation and mentality. But organisation of seminars by foreign colleagues to share their experience so that it could be adopted to Russian realities is very useful.
Sergey Bubnov,
Managing Partner, BestLog consulting company:
– I think it is worth hiring foreigners for the company’s development on the whole. Nevertheless, the peculiarities of Russian managers’ mentality will hardly make it possible to put into operation the models of logistic management as they are in other countries. It may occur only either in foreign enterprises, operating in Russia in accordance with their own culture and standards, or in joint ventures.
Andrey Nedvetsky,
CEO, Showtime company:
– I consider usage of foreign experience is rather popular nowadays. But a foreign specialist must always be accompanied by a Russian colleague, adapting the experience to the realities of life in Russia.
Mikhail Miller,
Director of Logistic Services Sales, Alidi group of companies:
- Personally I don’t know any examples of successful work of foreign logistic specialists in Russia. I am not sure it can be a success. Russian mentality, breeding, education – all the factors will inevitably put “unrecoverable” corrections into any foreign technology. As a rule, all such technologies should be adapted in accordance with the specific feature of our personnel.
Dmitry Ushakov,
Head of Intermodal Transportation Department, OOO Reftransportation Agency:
- Naturally, consultation of foreign logistics specialists is very interesting and important for Russian companies. As for organisation of regular operative and strategic management by foreign managers in a Russian company, I think a foreigner cannot fulfill it properly without knowing all the specifics of Russian transport activities and realities.
Elena Gorislavets,
Logistics Director, Centroobuv company:
- Employing a foreign specialist is reasonable to organise strategic management and make suggestions and recommendations for changes in the operative management and HR training. But the operative management must be provided by specialists familiar with the specifics and national peculiarities of the sector.
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The RZD-Partner International magazine and A DAN DZO company polled four-dozen heads of logistics and HR services and CEOs of different companies. According to the results of the poll, graduates from higher educational institutions specialising in logistics do not satisfy their employers. In the words of LTL group of companies Director Alexey Dotsenko, the main reason for the dissatisfaction is the fact that studying logistics in higher educational institutions “as the main specialisation is far from the requirements of specialists operating in the practical market”. “They know the theory, but when they face some definite real problem, they are at a loss, because the logistics technologies are not taught properly”, believes Salavat Mukhitdinov, Deputy Director of Economy of OOO TOREKS (Intersport retail network). The Logistic Department Head of Bayer company, Maria Kanaeva, shares this opinion, “four-year students come and start to speak about the definition of the company’s logistic mission. Meanwhile, they do not know how to order transport. It is terrible. A logistician is expected to optimise the cost and deliveries. Unfortunately, they do not study it in Russian higher education institutions”.
Alexey Ovchinnikov, Head of the Logistics Department of Serdicks pharmaceutical company (Servier group) highlights another aspect of the problem. In his words, “graduates do not understand logistics as a single system to manage material flows; everything is separated in their minds – transport, warehouses, production and planning”. Since the specialists coming to a company right after their graduation from a higher education institution have no idea of the processes carried out in real companies, of the consequences of improper fulfilment of the set tasks, it is complicated for them to understand how important their activities are”, comments the Head of Logistic Service of Bureaucrat network, Pavel Balyasnikov, on the problems faced by cargo owners and traders.
“Our company works on the international market, so our employees are to know the English language. Russian higher education institution graduates, who did not study in language schools, can rarely speak English well”, Irina Malinkovskaya, HR Director of Major Cargo Service emphasises the huge problems in higher education as well as further education.
There is another objective reason for which higher education institutions cannot train the necessary amount of qualified specialists. Few teachers know about the latest IT technologies. Young specialists are not eager to become teachers because of the small salary. Partly, the problem is being solved by means of master classes held by sectoral specialists, but there are few such people, they are usually very busy and have little time for it. President of Transsphere group of companies Sergey Shidlovsky says that he is ready to teach, but business in Russia requires constant attention. “Due to my experience, I know where there may be a failure, and I am ready to prevent it. Meanwhile, in such a situation, it is impossible to find time to share my knowledge accumulated during 10 years of work in the logistics sector”.
According to the results of the poll, representatives of higher school and further education understand the position of the business and have a clear vision of the direction in which the education system should develop. They appeal to business as the basic carrier of unique knowledge, technologies and skills.
“I believe that the first education (bachelor) can give hardly any definite practical skills in logistics. In four years a young man can hardly learn how to manage logistic business processes. There should be a practical constituent in the education process (formation of skills). That way, businesses can help to form specialist-logisticians in four-year education”, considers manager of The Open University of Business and Technologies Maxim Ivanov. The next offer may be the implementation of certification. Logisticians may be given a certificate, and this process could be controlled by a self-regulated organisation in the logistics sector. To get a certificate a logistician must pass a special test and fulfill practical tasks.
The viewpoint of Natalya Kireeva, a candidate of Economics and an associate professor of Logistics at the Plekhanov Russian Economic Academy, is very interesting. She notes that the experiment of logistics specialist training started in 2000, and the standards of specialists training and the educational programmes were developed in accordance with the latest logistics and education technologies. So to say that the educational system falls behind the sectoral demands is not correct. Moreover, at the cutting edge of logistics development, the base of knowledge the graduates have is not in demand in Russia yet. “As for the dissatisfaction of companies’ representatives with the level of graduates, there is the same situation in other sectors. Every company has its own peculiarities, and consequently, its own requirements to graduates. And higher education institutions can hardly fulfill all of the requirements. In some countries, specialists are trained by companies themselves”, stresses N. Kireeva.
Teach What and How? Many Questions, Few Answers
Logisticians do not act as a dissatisfied and quarrelsome consumer of educational services. They have ideas on how to improve the education process. In fact, they are interested in it. Frank Mueller, CEO of AsstrA Group of Companies, says he would be glad to give a short-term course to future logisticians, who would receive basic knowledge about transport, client-orientation, ability to provide qualified services and ethics. Partner of BestLog consulting company Sergey Bubnov wants “studying youngsters to wish and the higher schools’ top-management to provide training at real enterprises (foreign, Russian and mixed ones). Such trainings should be paid for by the state or the enterprise in order to improve the quality of education, and to get skilled employees”.
A specialist of Supplies Department of MasterLand company Georgy Legeza also speaks about the necessity of training in foreign and Russian companies. In his opinion, teachers with practical experience of work in an enterprise should be attracted to the further education sector and give their audience more practical knowledge. Yrysbek Tashbaev from STS Logistics offers the following measures: to start training at the second year in university, and the ratio of theory and practice in the educational plans must be 50/50. “Advanced students should be given individual scholarships by the companies. Much attention should be paid to the professional training of logistic teachers, and use such methods as analysis of practical situations more often”, believes the expert.
Corporate Universities
If some knowledge is not given in a university or in an institute, they have to be taught at an enterprise. “One can hardly expect young specialists coming to a company to be able to meet the market requirements. At personnel selection, we evaluate the knowledge of the candidates as well as their personal qualities, i.e. energies, commutability, eagerness to self-improve and flexible brainwork. The employees meeting the requirements may be taught successfully in the company. And we stake everything on that”, says E. Marchenko from AsstrA. The methods include thematic seminars, educational intracorporate programmes, adaptation programmes, and attraction of external experts. Besides, twice a year every employee of AsstrA must undergo external training concerning practical aspects of their activities.
To train is much cheaper than to employ highly-paid specialists fired from competing companies, says President of Russian Logistic Service company Kirill Vlasov. His company provides additional training by means of its own specialists as well as customers’ ones.
In words of Andrey Stoyko, Logistic Director of OOO Yurinat, his company uses modern equipment and software. In particular, it uses WMS (warehouse management system). Meanwhile, universities and institutes teach students how to use rather old programmes “1C-Warehouse”, BEST, “Sail”. So there is no alternative but to teach specialists in the company. Commercial Director of Terminal K company, which also uses WMS, Roman Konyakhin has a similar problem. “No new employee has skills in how to work with the data collection terminals”, he says.
There are many corporate education methods. Most companies, which took part in the poll, choose professional seminars and conferences. The programme of BestLog envisages study of application-oriented literature, participation in specialised forums, exhibitions and conferences. OAO Mobile Telesystems pays for its specialists’ short-term study in the Higher School of Economics. Alexey Ovchinnikov from Servier uses his own programmes to teach new employees. Company Major has not only seminars but also a single multi-level system for English language studying. Its employees are tested monthly.
Andrey Nedvetsky, CEO of Showtime company, says that for him it is enough if a new employee has basic knowledge, a clear vision of what he will do in the company, and speak a foreign language. The rest of the necessary knowledge and skills he will be taught in the company.
The forms of additional education are also different. To conclude, most companies, both logistic and transport operators and cargo owners, have their own education system with preliminary planning and final product standards, and whether an employee meets them shows in the “exams”.
In LTL, the head of departments are responsible for professional training. In a month after an employee started his work, a certification is held to find out if he may occupy the position, and his responsibilities grow. In Terminal K, a plan of the personnel’s qualification improvement is developed at the end of every year. And Major has developed a complicated training system. The first stage envisages an introduction, during which a newcomer learns the structure, mission and strategy of the company, targets, aims, key priorities and the principles of work. At the second stage, the new employee works at his workplace guided by a more experienced colleague. In the company there is an inner auditorium, where the employees learn about transportation by all the transport modes, warehousing, customs clearance, etc. And in the educational centre, there are regular training sessions held by external professionals and the company’s ones. If necessary, the personnel go in for special courses and seminars devoted to logistics.
Let’s Call Foreign Specialists?
Answering a question about how and where they look for the employees, representatives of several companies said they cooperate with higher schools and communicate with senior students. And in the process of communication, the students learn the peculiar features of the business. Another type of cooperation, that would enable business and teachers to organise a dialogue and understand each other’s needs, is regular joint events, i.e. scientific and practical conferences devoted to training specialists in logistics.
And there is one more way out – to hire a foreign specialist. There are many different opinions on it (some of them you can read in the article): some specialists consider that a foreigner does not know the specific features of Russia, and regardless of experience, his work will not be efficient; others think that Russian companies may get use from learning from the experience of logistics organisation in developed countries. It is a paradox, but it is possible to make only one conclusion of all the opinions: professionals from other states have a promising future in Russia. One of the reasons for it is the growing demand for highly-qualified specialists, and the insufficient supply.
By Ivan Stupachenko
viewpoint
Maria Kanaeva,
Logistic Department Head, Bayer company:
– I believe, employing foreigners is not efficient because logistics in Russia have many specific features due to many reasons: area, level of logistic services, peculiarities of legislation and mentality. But organisation of seminars by foreign colleagues to share their experience so that it could be adopted to Russian realities is very useful.
Sergey Bubnov,
Managing Partner, BestLog consulting company:
– I think it is worth hiring foreigners for the company’s development on the whole. Nevertheless, the peculiarities of Russian managers’ mentality will hardly make it possible to put into operation the models of logistic management as they are in other countries. It may occur only either in foreign enterprises, operating in Russia in accordance with their own culture and standards, or in joint ventures.
Andrey Nedvetsky,
CEO, Showtime company:
– I consider usage of foreign experience is rather popular nowadays. But a foreign specialist must always be accompanied by a Russian colleague, adapting the experience to the realities of life in Russia.
Mikhail Miller,
Director of Logistic Services Sales, Alidi group of companies:
- Personally I don’t know any examples of successful work of foreign logistic specialists in Russia. I am not sure it can be a success. Russian mentality, breeding, education – all the factors will inevitably put “unrecoverable” corrections into any foreign technology. As a rule, all such technologies should be adapted in accordance with the specific feature of our personnel.
Dmitry Ushakov,
Head of Intermodal Transportation Department, OOO Reftransportation Agency:
- Naturally, consultation of foreign logistics specialists is very interesting and important for Russian companies. As for organisation of regular operative and strategic management by foreign managers in a Russian company, I think a foreigner cannot fulfill it properly without knowing all the specifics of Russian transport activities and realities.
Elena Gorislavets,
Logistics Director, Centroobuv company:
- Employing a foreign specialist is reasonable to organise strategic management and make suggestions and recommendations for changes in the operative management and HR training. But the operative management must be provided by specialists familiar with the specifics and national peculiarities of the sector.
[~DETAIL_TEXT] => Education System Falls Behind Business
The RZD-Partner International magazine and A DAN DZO company polled four-dozen heads of logistics and HR services and CEOs of different companies. According to the results of the poll, graduates from higher educational institutions specialising in logistics do not satisfy their employers. In the words of LTL group of companies Director Alexey Dotsenko, the main reason for the dissatisfaction is the fact that studying logistics in higher educational institutions “as the main specialisation is far from the requirements of specialists operating in the practical market”. “They know the theory, but when they face some definite real problem, they are at a loss, because the logistics technologies are not taught properly”, believes Salavat Mukhitdinov, Deputy Director of Economy of OOO TOREKS (Intersport retail network). The Logistic Department Head of Bayer company, Maria Kanaeva, shares this opinion, “four-year students come and start to speak about the definition of the company’s logistic mission. Meanwhile, they do not know how to order transport. It is terrible. A logistician is expected to optimise the cost and deliveries. Unfortunately, they do not study it in Russian higher education institutions”.
Alexey Ovchinnikov, Head of the Logistics Department of Serdicks pharmaceutical company (Servier group) highlights another aspect of the problem. In his words, “graduates do not understand logistics as a single system to manage material flows; everything is separated in their minds – transport, warehouses, production and planning”. Since the specialists coming to a company right after their graduation from a higher education institution have no idea of the processes carried out in real companies, of the consequences of improper fulfilment of the set tasks, it is complicated for them to understand how important their activities are”, comments the Head of Logistic Service of Bureaucrat network, Pavel Balyasnikov, on the problems faced by cargo owners and traders.
“Our company works on the international market, so our employees are to know the English language. Russian higher education institution graduates, who did not study in language schools, can rarely speak English well”, Irina Malinkovskaya, HR Director of Major Cargo Service emphasises the huge problems in higher education as well as further education.
There is another objective reason for which higher education institutions cannot train the necessary amount of qualified specialists. Few teachers know about the latest IT technologies. Young specialists are not eager to become teachers because of the small salary. Partly, the problem is being solved by means of master classes held by sectoral specialists, but there are few such people, they are usually very busy and have little time for it. President of Transsphere group of companies Sergey Shidlovsky says that he is ready to teach, but business in Russia requires constant attention. “Due to my experience, I know where there may be a failure, and I am ready to prevent it. Meanwhile, in such a situation, it is impossible to find time to share my knowledge accumulated during 10 years of work in the logistics sector”.
According to the results of the poll, representatives of higher school and further education understand the position of the business and have a clear vision of the direction in which the education system should develop. They appeal to business as the basic carrier of unique knowledge, technologies and skills.
“I believe that the first education (bachelor) can give hardly any definite practical skills in logistics. In four years a young man can hardly learn how to manage logistic business processes. There should be a practical constituent in the education process (formation of skills). That way, businesses can help to form specialist-logisticians in four-year education”, considers manager of The Open University of Business and Technologies Maxim Ivanov. The next offer may be the implementation of certification. Logisticians may be given a certificate, and this process could be controlled by a self-regulated organisation in the logistics sector. To get a certificate a logistician must pass a special test and fulfill practical tasks.
The viewpoint of Natalya Kireeva, a candidate of Economics and an associate professor of Logistics at the Plekhanov Russian Economic Academy, is very interesting. She notes that the experiment of logistics specialist training started in 2000, and the standards of specialists training and the educational programmes were developed in accordance with the latest logistics and education technologies. So to say that the educational system falls behind the sectoral demands is not correct. Moreover, at the cutting edge of logistics development, the base of knowledge the graduates have is not in demand in Russia yet. “As for the dissatisfaction of companies’ representatives with the level of graduates, there is the same situation in other sectors. Every company has its own peculiarities, and consequently, its own requirements to graduates. And higher education institutions can hardly fulfill all of the requirements. In some countries, specialists are trained by companies themselves”, stresses N. Kireeva.
Teach What and How? Many Questions, Few Answers
Logisticians do not act as a dissatisfied and quarrelsome consumer of educational services. They have ideas on how to improve the education process. In fact, they are interested in it. Frank Mueller, CEO of AsstrA Group of Companies, says he would be glad to give a short-term course to future logisticians, who would receive basic knowledge about transport, client-orientation, ability to provide qualified services and ethics. Partner of BestLog consulting company Sergey Bubnov wants “studying youngsters to wish and the higher schools’ top-management to provide training at real enterprises (foreign, Russian and mixed ones). Such trainings should be paid for by the state or the enterprise in order to improve the quality of education, and to get skilled employees”.
A specialist of Supplies Department of MasterLand company Georgy Legeza also speaks about the necessity of training in foreign and Russian companies. In his opinion, teachers with practical experience of work in an enterprise should be attracted to the further education sector and give their audience more practical knowledge. Yrysbek Tashbaev from STS Logistics offers the following measures: to start training at the second year in university, and the ratio of theory and practice in the educational plans must be 50/50. “Advanced students should be given individual scholarships by the companies. Much attention should be paid to the professional training of logistic teachers, and use such methods as analysis of practical situations more often”, believes the expert.
Corporate Universities
If some knowledge is not given in a university or in an institute, they have to be taught at an enterprise. “One can hardly expect young specialists coming to a company to be able to meet the market requirements. At personnel selection, we evaluate the knowledge of the candidates as well as their personal qualities, i.e. energies, commutability, eagerness to self-improve and flexible brainwork. The employees meeting the requirements may be taught successfully in the company. And we stake everything on that”, says E. Marchenko from AsstrA. The methods include thematic seminars, educational intracorporate programmes, adaptation programmes, and attraction of external experts. Besides, twice a year every employee of AsstrA must undergo external training concerning practical aspects of their activities.
To train is much cheaper than to employ highly-paid specialists fired from competing companies, says President of Russian Logistic Service company Kirill Vlasov. His company provides additional training by means of its own specialists as well as customers’ ones.
In words of Andrey Stoyko, Logistic Director of OOO Yurinat, his company uses modern equipment and software. In particular, it uses WMS (warehouse management system). Meanwhile, universities and institutes teach students how to use rather old programmes “1C-Warehouse”, BEST, “Sail”. So there is no alternative but to teach specialists in the company. Commercial Director of Terminal K company, which also uses WMS, Roman Konyakhin has a similar problem. “No new employee has skills in how to work with the data collection terminals”, he says.
There are many corporate education methods. Most companies, which took part in the poll, choose professional seminars and conferences. The programme of BestLog envisages study of application-oriented literature, participation in specialised forums, exhibitions and conferences. OAO Mobile Telesystems pays for its specialists’ short-term study in the Higher School of Economics. Alexey Ovchinnikov from Servier uses his own programmes to teach new employees. Company Major has not only seminars but also a single multi-level system for English language studying. Its employees are tested monthly.
Andrey Nedvetsky, CEO of Showtime company, says that for him it is enough if a new employee has basic knowledge, a clear vision of what he will do in the company, and speak a foreign language. The rest of the necessary knowledge and skills he will be taught in the company.
The forms of additional education are also different. To conclude, most companies, both logistic and transport operators and cargo owners, have their own education system with preliminary planning and final product standards, and whether an employee meets them shows in the “exams”.
In LTL, the head of departments are responsible for professional training. In a month after an employee started his work, a certification is held to find out if he may occupy the position, and his responsibilities grow. In Terminal K, a plan of the personnel’s qualification improvement is developed at the end of every year. And Major has developed a complicated training system. The first stage envisages an introduction, during which a newcomer learns the structure, mission and strategy of the company, targets, aims, key priorities and the principles of work. At the second stage, the new employee works at his workplace guided by a more experienced colleague. In the company there is an inner auditorium, where the employees learn about transportation by all the transport modes, warehousing, customs clearance, etc. And in the educational centre, there are regular training sessions held by external professionals and the company’s ones. If necessary, the personnel go in for special courses and seminars devoted to logistics.
Let’s Call Foreign Specialists?
Answering a question about how and where they look for the employees, representatives of several companies said they cooperate with higher schools and communicate with senior students. And in the process of communication, the students learn the peculiar features of the business. Another type of cooperation, that would enable business and teachers to organise a dialogue and understand each other’s needs, is regular joint events, i.e. scientific and practical conferences devoted to training specialists in logistics.
And there is one more way out – to hire a foreign specialist. There are many different opinions on it (some of them you can read in the article): some specialists consider that a foreigner does not know the specific features of Russia, and regardless of experience, his work will not be efficient; others think that Russian companies may get use from learning from the experience of logistics organisation in developed countries. It is a paradox, but it is possible to make only one conclusion of all the opinions: professionals from other states have a promising future in Russia. One of the reasons for it is the growing demand for highly-qualified specialists, and the insufficient supply.
By Ivan Stupachenko
viewpoint
Maria Kanaeva,
Logistic Department Head, Bayer company:
– I believe, employing foreigners is not efficient because logistics in Russia have many specific features due to many reasons: area, level of logistic services, peculiarities of legislation and mentality. But organisation of seminars by foreign colleagues to share their experience so that it could be adopted to Russian realities is very useful.
Sergey Bubnov,
Managing Partner, BestLog consulting company:
– I think it is worth hiring foreigners for the company’s development on the whole. Nevertheless, the peculiarities of Russian managers’ mentality will hardly make it possible to put into operation the models of logistic management as they are in other countries. It may occur only either in foreign enterprises, operating in Russia in accordance with their own culture and standards, or in joint ventures.
Andrey Nedvetsky,
CEO, Showtime company:
– I consider usage of foreign experience is rather popular nowadays. But a foreign specialist must always be accompanied by a Russian colleague, adapting the experience to the realities of life in Russia.
Mikhail Miller,
Director of Logistic Services Sales, Alidi group of companies:
- Personally I don’t know any examples of successful work of foreign logistic specialists in Russia. I am not sure it can be a success. Russian mentality, breeding, education – all the factors will inevitably put “unrecoverable” corrections into any foreign technology. As a rule, all such technologies should be adapted in accordance with the specific feature of our personnel.
Dmitry Ushakov,
Head of Intermodal Transportation Department, OOO Reftransportation Agency:
- Naturally, consultation of foreign logistics specialists is very interesting and important for Russian companies. As for organisation of regular operative and strategic management by foreign managers in a Russian company, I think a foreigner cannot fulfill it properly without knowing all the specifics of Russian transport activities and realities.
Elena Gorislavets,
Logistics Director, Centroobuv company:
- Employing a foreign specialist is reasonable to organise strategic management and make suggestions and recommendations for changes in the operative management and HR training. But the operative management must be provided by specialists familiar with the specifics and national peculiarities of the sector.
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«Russia is extremely important to the Finnish investors. Russian Federation offers a vast base of not only raw materials such as gas, oil, timber and minerals, but an increasingly competitive base for Finnish companies to locate their business in Russia», says Tarja Tiirikainen, Director of Finnish-Russian Chamber of Commerce in St. Petersburg. We asked Mrs. Tiirikainen to express her view on the opportunities and threats of the business operations in Russia.Array
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[DETAIL_TEXT] => – Mrs. Tiirikainen, what are the most important joint projects of Russia and Finland?
– The joint effort by Russian Railways (RZD) and Finnish State Railways (VR) is by far the most effective and far reaching effort in the transport sector: it affects both the passenger and cargo traffic. These two organizations have joined forces to create a fast-speed passenger train connection between Helsinki and St. Petersburg, later on also between Moscow and Helsinki. Their company is called Karelian Trains, which has already signed a purchase order for 4 high-speed Pendolino trains from Alstom. These trains will be manufactured by Alstom’s daughter company Fiat Ferroviaria in Savigliano, Italy. The high-speed trains will start operating between St. Petersburg and Helsinki latest in 2010, and the travel time will be cut down from 5 hours to 3 hrs. There will be four trains to each direction every day of the week. All customs and boarder check-up procedures will be done on-board the moving train. In both countries the new rail tracks and improvements to existing railroad network to facilitate the new high speed connection are being built. In 2006, the amount of passengers between St. Petersburg and Helsinki reached 200 000. Finnish State Railways is expecting this to increase threefold within the next 5 years.
Together these two companies also aim at taking 30% of the overall Finnish-Russian transit traffic of new cars. According to Mr Matti Andersson, Marketing Manager, International Trade and Service Providers VR, in 2006 only 3% of the car transit was transferred by railroad. The amount of transit cars in 2006 totalled 530 000 cars. RZD and VR plan to carry 100 000 cars by end of 2008, and by 2010 already 300 000 cars. Transferring cargo from trucks to railroad effectively diminishes wear and tear of the road network, helps to solve the problems with the long queues at the border points, and helps to reduce the load caused by truck fumes to the ecology. TransSiberian railroad will be put to effective use by the partners, ensuring smooth container shipments via railroad from Finnish ports through Russia to China. There is also a container train connection called “Severnoye Siyanye” between Moscow and Kouvola in Finland – it takes only 1 day on its way.
– Do you consider Russia’s investment climate attractive? What is to be done to improve it?
– Investments throughout Russian Federation are growing fast, and this is also true for the North-West of Russia. According to Rosstat, investments in Russia grew 27,2% in June 2007 compared with the previous year. Capital investments during January – August 2007 grew by almost 25%.
St. Petersburg and the Leningrad region have enacted an investor-friendly legislation; which includes various tax concessions for the investors. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade, and also the Committee for Investments and Strategic Projects are very supportive towards investors, ready to meet with them, and facilitate other meetings between the would-be investors, government officials, organizations and business executives. The same goes for the Leningrad region Committee for Economic Development. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade publishes each year an excellent guide for all investors (in Russian and English): “How to invest in Saint-Petersburg”. These Committees also actively promote their regions abroad, when participating on official tours often headed by the Governor of St. Petersburg Mrs Matvienko.
The employees representing the administration in the city, regional and local levels openly discuss also the challenges of their own area with the potential investors: what is the planning process like, has the general plan for the area been approved, what is the infrastructure of the area, and are there enough skilled work force available for the would-be investor.
Other regions should join St. Petersburg, and issue their own guidelines for investors in English – this would make it a lot easier for foreign companies to understand what is required of them.
What could be done more efficiently – the first thing that comes into mind is the slow process in getting a planning permission for building anything in St. Petersburg. The process used to take up to a year, now it takes at least 18 months. The various Committees controlling and supervising building works could speed up their own internal processes, and cooperate with each other in order to facilitate the customer. It takes in average 29 permissions from various instances of St. Petersburg to obtain a planning permission for building works. In order to get the 29 permissions, a great amount of paperwork is needed for each separate permission, and several meetings with the officials have to be conducted. In Finland, the planning permission is given by one instance, the Institute for Supervising Civil Engineering (Rakennustarkastusvirasto): they have an office network throughout the country, a ready-made form for applying the permission, and inspectors who advise on all matters related to the permission.
Finnish investors are expectant of Russia’s joining into the WTO – membership in the World Trade Organization will firmly integrate Russia’s economy into the global economy, and will lead into standardization of trade practices between Russia and its business partners, including Finnish companies.
– What makes Russia attractive for Finnish investors? How many of them come to the Russian Federation market every year on average?
– Russia is extremely important to the Finnish investors. Russian Federation offers a vast base of not only raw materials such as gas, oil, timber and minerals, but an increasingly competitive base for Finnish companies to locate their business in Russia. Finns have brought industrial plants and service organizations into Russia, and export the goods made locally in Russia to global markets. Confidence in Russia as a desired investment location is growing among Finns: Ruukki Group has signed an investment agreement with Kostroma government, where Ruukki Group has undertaken to build a cellulose manufacturing plant – the first ever Finnish-owned cellulose plant in Russia! StoraEnso has decided to investigate a possibility to build such a plant in Russia, too. Russia offers huge markets for Finnish goods and services, plenty of skilled workforce at competitive cost, and is located next door to Finland with good railroad, shipping, road and flight connections.
There are currently over 450 Finnish companies located in St. Petersburg with their own daughter company, JV or a representative office. In average, the annual growth of Finnish companies in Russia is around 15-20%.
– What problems do Finnish companies face in Russia?
– The traditional problems caused by bureaucracy, corruption, interpretation of legislation and ever-changing laws remain a problem. Customs procedures and other issues related to border crossing are also a problem. Difficulties are caused by a lack of consistent and reliable logistical network, which would take care of the goods imported into Russia from Finland all the way from the border (or from Finland) through customs inspection, storage and delivery to end customer anywhere in Russia. Lack of skilled work force is also becoming a show-stopper for Finnish and other companies.
– Is the cooperation between the Russian and Finnish customs bodies efficient? What should be done to improve it?
– The so called Green Corridor has proved to speed up the customs procedures significantly. Companies participating in this experiment are only few, they use electronic documentation, whereby all the paperwork is forwarded from Finland to Russia and vice versa in electronic form. This guarantees that the information on the documentation is exactly identical on both sides of the border, and there cannot be any misrepresentation of the goods brought into Russia/Finland. Thus, the Russian customs officials know exactly in advance what the cargo includes and when it reaches the border point. This allows for speedier check-up of the cargo, which saves overall time spent on the roads. This electronic procedure should be introduced to all companies, which regularly cross the border between Russia and Finland. It can also be used for sea and rail shipments, not only trucks.
The officials have conducted regular meetings, which allows for open and honest discussion of the problems and facilitates mutual willingness to solve these obstacles at the crossing points. Together, they have given their recommendations to their respective ministries. Without these regular meetings and work done in these groups, the problems would be far bigger than they currently are.
– The Russian and the Finnish are making joint efforts to improve the situation on the border. What will be done to reduce the queues in the near future?
– The transit traffic and other traffic from Finland into Russia has grown from 300 000 tons in 2002 to 900 000 tons in autumn 2007. This obviously causes queues at all border crossings, although the amount of crossings is increasing: there are currently 8 official border land crossings: the Saimaa Canal has the boarder crossing officially either in Vyborg or in Lappeenranta. Vainikkala/Buslovskaya and Vartius/Kivijarvi are railroad crossings only. For car and truck traffic border crossings are located at Vaalimaa/Torfyanovka, Nuijamaa/Brusnichnoye; Imatra/Svetogorsk (also railroad crossing point), Vartius/Kivijarvi (also railroad crossing point), Salla/Kelloselka and Kuusamo/Suopera. In addition, there are several unofficial (19) border crossing points, which are used mainly by the trucks bringing timber from Russia into Finland.
The officials in both countries are working on opening a new border crossing at Parikkala. More customs and border guards have been put in place in Vaalimaa and Torfyanovka. Torfyanovka aims at processing 1000 trucks per day by end of 2007. Current rate is at 650 – 700. The same effectiveness can be introduced at other border crossings, too. In addition to this, Russia has enacted a new law, which reduces the amount of organizations working immediately at the border. In Finland, there are only two organizations: the customs and the border guards. In Russia, there are 8 organizations working at the border crossing point, which causes traffic jams on the Russian side. The new law needs to be implemented as soon as possible to speed up the road traffic between the two countries. Finnish government will invest 24 million euros in a truck parking lot at Vaalimaa, which will be ready by end of 2008. The parking lot can house 1000 trucks, which means 30 km less trucks queuing on the Finnish side. Currently the queues can reach as far as 80 km from the Finnish border point of Vaalimaa, and the narrow road leaves too little space for other road traffic.
Trucks are also guided to other crossing points to alleviate the problems at Vaalimaa. The drivers are given the exact border crossing point already at the Finnish port, where they pick their cargo. This has, unfortunately, resulted in queues in Imatra and Nuijamaa, where the traffic used to be almost free-flowing. Further parking lots can be introduced, if the first one is a success.
Transferring the cargo from trucks onto railroad will alleviate many of the problems with border crossings. The other part of the solution lies in Russian ports: when the ports are equipped to handle the cargo (including cars) and an effective logistics network covering the storage and further delivery of the cargo is in place, the truck traffic will significantly diminish on both sides of the border.
– Russian and Finninsh transport companies not only cooperate, but also compete. What are the hottest areas in this competition?
– The majority of the truck traffic between our countries is firmly in the hands of Russian companies: 95% of the trucks belong to Russian entrepreneurs. Finnish companies are not competitive enough to win more market share. On the air traffic, Pulkovo Airlines and Finnair are jointly managing the flights between St. Petersburg and Helsinki, so the market is shared between them. On the railroad traffic, there is very little competition due to government restrictions in both countries. Sea traffic has more competition with global shipping companies wanting to have their share of the cargo traffic arriving in and parting from Russia.
As for the logistics network, here the competition is hotting up. Many Finnish and other companies are building their logistics warehouses and searching for reliable local business partners, who will be in charge of delivery network. Finnish Itella delivers small parcels and packages in Moscow and St. Petersburg, and will actively grow in other Russian locations, too. Onninen recently opened their warehouse in St. Petersburg which is mainly focusing on construction materials. DHL, UPS, FedEx and other global players are active in Russia. Thus, there are vast opportunities in the logistics services related to the transport sector, which are noticed by Finnish companies.
Interviewed by Anna Nezhinskaya
our reference
In January 2007 aggregate volume of large-capacity containers transported by railway and sea transport of the Western basin of the RF within Russia- Europe – Russia communication made 1.033.512 TEU
In January –September 2007 the volume of large-capacity containers transported by railways via land border crossings within Europe – Russia – Europe communication amounted to 29.804 TEU including:
• via Krasnoye – Brest border crossing – 13.540 containers (+134% year-on-year), transportation on the direction West-East is implemented mainly by “Eastern Wind” and “Rotterdam – Brest” block- trains on the route Berlin/Rotterdam – Moscow and further on to the industrial centers of Russia and Kazakhstan;
• via Zilupe – Sebezh border crossing – 16.264 containers (+300% year-on-year), transportation is implemented by “Balticatransit” block-train on the route Baltic ports - Kazakhstan /Uzbekistan in transit mode along the Russian railways
The volume of large-capacity containers transported by sea between Russia and Europe in January – June 2007:
In general in H1 2007 the ports of North-West basin handled 878.580 TEU (+124.8%) from this amount export takes 390.521 TEU (+119.1%) and import share makes 459.820 TEU (+129.7%).
In H1 2007 the Sea Commercial Port of Saint Petersburg handled 772.755 containers (against 144.999 handled in 2006)
In H1 2007 the Sea Commercial Port of Kaliningrad handled 75.501 containers (against 106.729 handled in 2006).
In H1 2007 the Sea Commercial Port of Novorossiysk handled 155.452 containers (against 224.899 in 2006).
Euroterminal (Slavkov, Poland)
Euroterminal belongs to Centrala Zaopatzenia Hutnictwa (CZH S.A.) JSC, acting member of CCTT.
The terminal’s major advantage is accesses for both gauge standards (1435 and 1520 mm).
Handling capacity of the complex amounts to 35 000 containers and about one million tons of cargo per year. Now the programme of terminal development is implemented (2007–2008). After reconstruction is completed the terminal will be capable to handle 70 000 containers annually. In future terminal capacity will reach 210 thousand containers per year.
European Regional Fund of Development and the Polish Government perform as investors of the terminal’s reconstruction. Aggregate investment volume amounts to EUR 16.6 mln.
The project includes:
1. Construction of the multifunctional warehouse with the area of 2.700 m2 and covered warehousing area (3.600 m2).
2. Construction of container platform – 12.950 m2 (400 m X 51.9 m).
3. Development of handling capacities, accesses and parking construction.
[~DETAIL_TEXT] => – Mrs. Tiirikainen, what are the most important joint projects of Russia and Finland?
– The joint effort by Russian Railways (RZD) and Finnish State Railways (VR) is by far the most effective and far reaching effort in the transport sector: it affects both the passenger and cargo traffic. These two organizations have joined forces to create a fast-speed passenger train connection between Helsinki and St. Petersburg, later on also between Moscow and Helsinki. Their company is called Karelian Trains, which has already signed a purchase order for 4 high-speed Pendolino trains from Alstom. These trains will be manufactured by Alstom’s daughter company Fiat Ferroviaria in Savigliano, Italy. The high-speed trains will start operating between St. Petersburg and Helsinki latest in 2010, and the travel time will be cut down from 5 hours to 3 hrs. There will be four trains to each direction every day of the week. All customs and boarder check-up procedures will be done on-board the moving train. In both countries the new rail tracks and improvements to existing railroad network to facilitate the new high speed connection are being built. In 2006, the amount of passengers between St. Petersburg and Helsinki reached 200 000. Finnish State Railways is expecting this to increase threefold within the next 5 years.
Together these two companies also aim at taking 30% of the overall Finnish-Russian transit traffic of new cars. According to Mr Matti Andersson, Marketing Manager, International Trade and Service Providers VR, in 2006 only 3% of the car transit was transferred by railroad. The amount of transit cars in 2006 totalled 530 000 cars. RZD and VR plan to carry 100 000 cars by end of 2008, and by 2010 already 300 000 cars. Transferring cargo from trucks to railroad effectively diminishes wear and tear of the road network, helps to solve the problems with the long queues at the border points, and helps to reduce the load caused by truck fumes to the ecology. TransSiberian railroad will be put to effective use by the partners, ensuring smooth container shipments via railroad from Finnish ports through Russia to China. There is also a container train connection called “Severnoye Siyanye” between Moscow and Kouvola in Finland – it takes only 1 day on its way.
– Do you consider Russia’s investment climate attractive? What is to be done to improve it?
– Investments throughout Russian Federation are growing fast, and this is also true for the North-West of Russia. According to Rosstat, investments in Russia grew 27,2% in June 2007 compared with the previous year. Capital investments during January – August 2007 grew by almost 25%.
St. Petersburg and the Leningrad region have enacted an investor-friendly legislation; which includes various tax concessions for the investors. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade, and also the Committee for Investments and Strategic Projects are very supportive towards investors, ready to meet with them, and facilitate other meetings between the would-be investors, government officials, organizations and business executives. The same goes for the Leningrad region Committee for Economic Development. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade publishes each year an excellent guide for all investors (in Russian and English): “How to invest in Saint-Petersburg”. These Committees also actively promote their regions abroad, when participating on official tours often headed by the Governor of St. Petersburg Mrs Matvienko.
The employees representing the administration in the city, regional and local levels openly discuss also the challenges of their own area with the potential investors: what is the planning process like, has the general plan for the area been approved, what is the infrastructure of the area, and are there enough skilled work force available for the would-be investor.
Other regions should join St. Petersburg, and issue their own guidelines for investors in English – this would make it a lot easier for foreign companies to understand what is required of them.
What could be done more efficiently – the first thing that comes into mind is the slow process in getting a planning permission for building anything in St. Petersburg. The process used to take up to a year, now it takes at least 18 months. The various Committees controlling and supervising building works could speed up their own internal processes, and cooperate with each other in order to facilitate the customer. It takes in average 29 permissions from various instances of St. Petersburg to obtain a planning permission for building works. In order to get the 29 permissions, a great amount of paperwork is needed for each separate permission, and several meetings with the officials have to be conducted. In Finland, the planning permission is given by one instance, the Institute for Supervising Civil Engineering (Rakennustarkastusvirasto): they have an office network throughout the country, a ready-made form for applying the permission, and inspectors who advise on all matters related to the permission.
Finnish investors are expectant of Russia’s joining into the WTO – membership in the World Trade Organization will firmly integrate Russia’s economy into the global economy, and will lead into standardization of trade practices between Russia and its business partners, including Finnish companies.
– What makes Russia attractive for Finnish investors? How many of them come to the Russian Federation market every year on average?
– Russia is extremely important to the Finnish investors. Russian Federation offers a vast base of not only raw materials such as gas, oil, timber and minerals, but an increasingly competitive base for Finnish companies to locate their business in Russia. Finns have brought industrial plants and service organizations into Russia, and export the goods made locally in Russia to global markets. Confidence in Russia as a desired investment location is growing among Finns: Ruukki Group has signed an investment agreement with Kostroma government, where Ruukki Group has undertaken to build a cellulose manufacturing plant – the first ever Finnish-owned cellulose plant in Russia! StoraEnso has decided to investigate a possibility to build such a plant in Russia, too. Russia offers huge markets for Finnish goods and services, plenty of skilled workforce at competitive cost, and is located next door to Finland with good railroad, shipping, road and flight connections.
There are currently over 450 Finnish companies located in St. Petersburg with their own daughter company, JV or a representative office. In average, the annual growth of Finnish companies in Russia is around 15-20%.
– What problems do Finnish companies face in Russia?
– The traditional problems caused by bureaucracy, corruption, interpretation of legislation and ever-changing laws remain a problem. Customs procedures and other issues related to border crossing are also a problem. Difficulties are caused by a lack of consistent and reliable logistical network, which would take care of the goods imported into Russia from Finland all the way from the border (or from Finland) through customs inspection, storage and delivery to end customer anywhere in Russia. Lack of skilled work force is also becoming a show-stopper for Finnish and other companies.
– Is the cooperation between the Russian and Finnish customs bodies efficient? What should be done to improve it?
– The so called Green Corridor has proved to speed up the customs procedures significantly. Companies participating in this experiment are only few, they use electronic documentation, whereby all the paperwork is forwarded from Finland to Russia and vice versa in electronic form. This guarantees that the information on the documentation is exactly identical on both sides of the border, and there cannot be any misrepresentation of the goods brought into Russia/Finland. Thus, the Russian customs officials know exactly in advance what the cargo includes and when it reaches the border point. This allows for speedier check-up of the cargo, which saves overall time spent on the roads. This electronic procedure should be introduced to all companies, which regularly cross the border between Russia and Finland. It can also be used for sea and rail shipments, not only trucks.
The officials have conducted regular meetings, which allows for open and honest discussion of the problems and facilitates mutual willingness to solve these obstacles at the crossing points. Together, they have given their recommendations to their respective ministries. Without these regular meetings and work done in these groups, the problems would be far bigger than they currently are.
– The Russian and the Finnish are making joint efforts to improve the situation on the border. What will be done to reduce the queues in the near future?
– The transit traffic and other traffic from Finland into Russia has grown from 300 000 tons in 2002 to 900 000 tons in autumn 2007. This obviously causes queues at all border crossings, although the amount of crossings is increasing: there are currently 8 official border land crossings: the Saimaa Canal has the boarder crossing officially either in Vyborg or in Lappeenranta. Vainikkala/Buslovskaya and Vartius/Kivijarvi are railroad crossings only. For car and truck traffic border crossings are located at Vaalimaa/Torfyanovka, Nuijamaa/Brusnichnoye; Imatra/Svetogorsk (also railroad crossing point), Vartius/Kivijarvi (also railroad crossing point), Salla/Kelloselka and Kuusamo/Suopera. In addition, there are several unofficial (19) border crossing points, which are used mainly by the trucks bringing timber from Russia into Finland.
The officials in both countries are working on opening a new border crossing at Parikkala. More customs and border guards have been put in place in Vaalimaa and Torfyanovka. Torfyanovka aims at processing 1000 trucks per day by end of 2007. Current rate is at 650 – 700. The same effectiveness can be introduced at other border crossings, too. In addition to this, Russia has enacted a new law, which reduces the amount of organizations working immediately at the border. In Finland, there are only two organizations: the customs and the border guards. In Russia, there are 8 organizations working at the border crossing point, which causes traffic jams on the Russian side. The new law needs to be implemented as soon as possible to speed up the road traffic between the two countries. Finnish government will invest 24 million euros in a truck parking lot at Vaalimaa, which will be ready by end of 2008. The parking lot can house 1000 trucks, which means 30 km less trucks queuing on the Finnish side. Currently the queues can reach as far as 80 km from the Finnish border point of Vaalimaa, and the narrow road leaves too little space for other road traffic.
Trucks are also guided to other crossing points to alleviate the problems at Vaalimaa. The drivers are given the exact border crossing point already at the Finnish port, where they pick their cargo. This has, unfortunately, resulted in queues in Imatra and Nuijamaa, where the traffic used to be almost free-flowing. Further parking lots can be introduced, if the first one is a success.
Transferring the cargo from trucks onto railroad will alleviate many of the problems with border crossings. The other part of the solution lies in Russian ports: when the ports are equipped to handle the cargo (including cars) and an effective logistics network covering the storage and further delivery of the cargo is in place, the truck traffic will significantly diminish on both sides of the border.
– Russian and Finninsh transport companies not only cooperate, but also compete. What are the hottest areas in this competition?
– The majority of the truck traffic between our countries is firmly in the hands of Russian companies: 95% of the trucks belong to Russian entrepreneurs. Finnish companies are not competitive enough to win more market share. On the air traffic, Pulkovo Airlines and Finnair are jointly managing the flights between St. Petersburg and Helsinki, so the market is shared between them. On the railroad traffic, there is very little competition due to government restrictions in both countries. Sea traffic has more competition with global shipping companies wanting to have their share of the cargo traffic arriving in and parting from Russia.
As for the logistics network, here the competition is hotting up. Many Finnish and other companies are building their logistics warehouses and searching for reliable local business partners, who will be in charge of delivery network. Finnish Itella delivers small parcels and packages in Moscow and St. Petersburg, and will actively grow in other Russian locations, too. Onninen recently opened their warehouse in St. Petersburg which is mainly focusing on construction materials. DHL, UPS, FedEx and other global players are active in Russia. Thus, there are vast opportunities in the logistics services related to the transport sector, which are noticed by Finnish companies.
Interviewed by Anna Nezhinskaya
our reference
In January 2007 aggregate volume of large-capacity containers transported by railway and sea transport of the Western basin of the RF within Russia- Europe – Russia communication made 1.033.512 TEU
In January –September 2007 the volume of large-capacity containers transported by railways via land border crossings within Europe – Russia – Europe communication amounted to 29.804 TEU including:
• via Krasnoye – Brest border crossing – 13.540 containers (+134% year-on-year), transportation on the direction West-East is implemented mainly by “Eastern Wind” and “Rotterdam – Brest” block- trains on the route Berlin/Rotterdam – Moscow and further on to the industrial centers of Russia and Kazakhstan;
• via Zilupe – Sebezh border crossing – 16.264 containers (+300% year-on-year), transportation is implemented by “Balticatransit” block-train on the route Baltic ports - Kazakhstan /Uzbekistan in transit mode along the Russian railways
The volume of large-capacity containers transported by sea between Russia and Europe in January – June 2007:
In general in H1 2007 the ports of North-West basin handled 878.580 TEU (+124.8%) from this amount export takes 390.521 TEU (+119.1%) and import share makes 459.820 TEU (+129.7%).
In H1 2007 the Sea Commercial Port of Saint Petersburg handled 772.755 containers (against 144.999 handled in 2006)
In H1 2007 the Sea Commercial Port of Kaliningrad handled 75.501 containers (against 106.729 handled in 2006).
In H1 2007 the Sea Commercial Port of Novorossiysk handled 155.452 containers (against 224.899 in 2006).
Euroterminal (Slavkov, Poland)
Euroterminal belongs to Centrala Zaopatzenia Hutnictwa (CZH S.A.) JSC, acting member of CCTT.
The terminal’s major advantage is accesses for both gauge standards (1435 and 1520 mm).
Handling capacity of the complex amounts to 35 000 containers and about one million tons of cargo per year. Now the programme of terminal development is implemented (2007–2008). After reconstruction is completed the terminal will be capable to handle 70 000 containers annually. In future terminal capacity will reach 210 thousand containers per year.
European Regional Fund of Development and the Polish Government perform as investors of the terminal’s reconstruction. Aggregate investment volume amounts to EUR 16.6 mln.
The project includes:
1. Construction of the multifunctional warehouse with the area of 2.700 m2 and covered warehousing area (3.600 m2).
2. Construction of container platform – 12.950 m2 (400 m X 51.9 m).
3. Development of handling capacities, accesses and parking construction.
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[DETAIL_TEXT] => – Mrs. Tiirikainen, what are the most important joint projects of Russia and Finland?
– The joint effort by Russian Railways (RZD) and Finnish State Railways (VR) is by far the most effective and far reaching effort in the transport sector: it affects both the passenger and cargo traffic. These two organizations have joined forces to create a fast-speed passenger train connection between Helsinki and St. Petersburg, later on also between Moscow and Helsinki. Their company is called Karelian Trains, which has already signed a purchase order for 4 high-speed Pendolino trains from Alstom. These trains will be manufactured by Alstom’s daughter company Fiat Ferroviaria in Savigliano, Italy. The high-speed trains will start operating between St. Petersburg and Helsinki latest in 2010, and the travel time will be cut down from 5 hours to 3 hrs. There will be four trains to each direction every day of the week. All customs and boarder check-up procedures will be done on-board the moving train. In both countries the new rail tracks and improvements to existing railroad network to facilitate the new high speed connection are being built. In 2006, the amount of passengers between St. Petersburg and Helsinki reached 200 000. Finnish State Railways is expecting this to increase threefold within the next 5 years.
Together these two companies also aim at taking 30% of the overall Finnish-Russian transit traffic of new cars. According to Mr Matti Andersson, Marketing Manager, International Trade and Service Providers VR, in 2006 only 3% of the car transit was transferred by railroad. The amount of transit cars in 2006 totalled 530 000 cars. RZD and VR plan to carry 100 000 cars by end of 2008, and by 2010 already 300 000 cars. Transferring cargo from trucks to railroad effectively diminishes wear and tear of the road network, helps to solve the problems with the long queues at the border points, and helps to reduce the load caused by truck fumes to the ecology. TransSiberian railroad will be put to effective use by the partners, ensuring smooth container shipments via railroad from Finnish ports through Russia to China. There is also a container train connection called “Severnoye Siyanye” between Moscow and Kouvola in Finland – it takes only 1 day on its way.
– Do you consider Russia’s investment climate attractive? What is to be done to improve it?
– Investments throughout Russian Federation are growing fast, and this is also true for the North-West of Russia. According to Rosstat, investments in Russia grew 27,2% in June 2007 compared with the previous year. Capital investments during January – August 2007 grew by almost 25%.
St. Petersburg and the Leningrad region have enacted an investor-friendly legislation; which includes various tax concessions for the investors. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade, and also the Committee for Investments and Strategic Projects are very supportive towards investors, ready to meet with them, and facilitate other meetings between the would-be investors, government officials, organizations and business executives. The same goes for the Leningrad region Committee for Economic Development. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade publishes each year an excellent guide for all investors (in Russian and English): “How to invest in Saint-Petersburg”. These Committees also actively promote their regions abroad, when participating on official tours often headed by the Governor of St. Petersburg Mrs Matvienko.
The employees representing the administration in the city, regional and local levels openly discuss also the challenges of their own area with the potential investors: what is the planning process like, has the general plan for the area been approved, what is the infrastructure of the area, and are there enough skilled work force available for the would-be investor.
Other regions should join St. Petersburg, and issue their own guidelines for investors in English – this would make it a lot easier for foreign companies to understand what is required of them.
What could be done more efficiently – the first thing that comes into mind is the slow process in getting a planning permission for building anything in St. Petersburg. The process used to take up to a year, now it takes at least 18 months. The various Committees controlling and supervising building works could speed up their own internal processes, and cooperate with each other in order to facilitate the customer. It takes in average 29 permissions from various instances of St. Petersburg to obtain a planning permission for building works. In order to get the 29 permissions, a great amount of paperwork is needed for each separate permission, and several meetings with the officials have to be conducted. In Finland, the planning permission is given by one instance, the Institute for Supervising Civil Engineering (Rakennustarkastusvirasto): they have an office network throughout the country, a ready-made form for applying the permission, and inspectors who advise on all matters related to the permission.
Finnish investors are expectant of Russia’s joining into the WTO – membership in the World Trade Organization will firmly integrate Russia’s economy into the global economy, and will lead into standardization of trade practices between Russia and its business partners, including Finnish companies.
– What makes Russia attractive for Finnish investors? How many of them come to the Russian Federation market every year on average?
– Russia is extremely important to the Finnish investors. Russian Federation offers a vast base of not only raw materials such as gas, oil, timber and minerals, but an increasingly competitive base for Finnish companies to locate their business in Russia. Finns have brought industrial plants and service organizations into Russia, and export the goods made locally in Russia to global markets. Confidence in Russia as a desired investment location is growing among Finns: Ruukki Group has signed an investment agreement with Kostroma government, where Ruukki Group has undertaken to build a cellulose manufacturing plant – the first ever Finnish-owned cellulose plant in Russia! StoraEnso has decided to investigate a possibility to build such a plant in Russia, too. Russia offers huge markets for Finnish goods and services, plenty of skilled workforce at competitive cost, and is located next door to Finland with good railroad, shipping, road and flight connections.
There are currently over 450 Finnish companies located in St. Petersburg with their own daughter company, JV or a representative office. In average, the annual growth of Finnish companies in Russia is around 15-20%.
– What problems do Finnish companies face in Russia?
– The traditional problems caused by bureaucracy, corruption, interpretation of legislation and ever-changing laws remain a problem. Customs procedures and other issues related to border crossing are also a problem. Difficulties are caused by a lack of consistent and reliable logistical network, which would take care of the goods imported into Russia from Finland all the way from the border (or from Finland) through customs inspection, storage and delivery to end customer anywhere in Russia. Lack of skilled work force is also becoming a show-stopper for Finnish and other companies.
– Is the cooperation between the Russian and Finnish customs bodies efficient? What should be done to improve it?
– The so called Green Corridor has proved to speed up the customs procedures significantly. Companies participating in this experiment are only few, they use electronic documentation, whereby all the paperwork is forwarded from Finland to Russia and vice versa in electronic form. This guarantees that the information on the documentation is exactly identical on both sides of the border, and there cannot be any misrepresentation of the goods brought into Russia/Finland. Thus, the Russian customs officials know exactly in advance what the cargo includes and when it reaches the border point. This allows for speedier check-up of the cargo, which saves overall time spent on the roads. This electronic procedure should be introduced to all companies, which regularly cross the border between Russia and Finland. It can also be used for sea and rail shipments, not only trucks.
The officials have conducted regular meetings, which allows for open and honest discussion of the problems and facilitates mutual willingness to solve these obstacles at the crossing points. Together, they have given their recommendations to their respective ministries. Without these regular meetings and work done in these groups, the problems would be far bigger than they currently are.
– The Russian and the Finnish are making joint efforts to improve the situation on the border. What will be done to reduce the queues in the near future?
– The transit traffic and other traffic from Finland into Russia has grown from 300 000 tons in 2002 to 900 000 tons in autumn 2007. This obviously causes queues at all border crossings, although the amount of crossings is increasing: there are currently 8 official border land crossings: the Saimaa Canal has the boarder crossing officially either in Vyborg or in Lappeenranta. Vainikkala/Buslovskaya and Vartius/Kivijarvi are railroad crossings only. For car and truck traffic border crossings are located at Vaalimaa/Torfyanovka, Nuijamaa/Brusnichnoye; Imatra/Svetogorsk (also railroad crossing point), Vartius/Kivijarvi (also railroad crossing point), Salla/Kelloselka and Kuusamo/Suopera. In addition, there are several unofficial (19) border crossing points, which are used mainly by the trucks bringing timber from Russia into Finland.
The officials in both countries are working on opening a new border crossing at Parikkala. More customs and border guards have been put in place in Vaalimaa and Torfyanovka. Torfyanovka aims at processing 1000 trucks per day by end of 2007. Current rate is at 650 – 700. The same effectiveness can be introduced at other border crossings, too. In addition to this, Russia has enacted a new law, which reduces the amount of organizations working immediately at the border. In Finland, there are only two organizations: the customs and the border guards. In Russia, there are 8 organizations working at the border crossing point, which causes traffic jams on the Russian side. The new law needs to be implemented as soon as possible to speed up the road traffic between the two countries. Finnish government will invest 24 million euros in a truck parking lot at Vaalimaa, which will be ready by end of 2008. The parking lot can house 1000 trucks, which means 30 km less trucks queuing on the Finnish side. Currently the queues can reach as far as 80 km from the Finnish border point of Vaalimaa, and the narrow road leaves too little space for other road traffic.
Trucks are also guided to other crossing points to alleviate the problems at Vaalimaa. The drivers are given the exact border crossing point already at the Finnish port, where they pick their cargo. This has, unfortunately, resulted in queues in Imatra and Nuijamaa, where the traffic used to be almost free-flowing. Further parking lots can be introduced, if the first one is a success.
Transferring the cargo from trucks onto railroad will alleviate many of the problems with border crossings. The other part of the solution lies in Russian ports: when the ports are equipped to handle the cargo (including cars) and an effective logistics network covering the storage and further delivery of the cargo is in place, the truck traffic will significantly diminish on both sides of the border.
– Russian and Finninsh transport companies not only cooperate, but also compete. What are the hottest areas in this competition?
– The majority of the truck traffic between our countries is firmly in the hands of Russian companies: 95% of the trucks belong to Russian entrepreneurs. Finnish companies are not competitive enough to win more market share. On the air traffic, Pulkovo Airlines and Finnair are jointly managing the flights between St. Petersburg and Helsinki, so the market is shared between them. On the railroad traffic, there is very little competition due to government restrictions in both countries. Sea traffic has more competition with global shipping companies wanting to have their share of the cargo traffic arriving in and parting from Russia.
As for the logistics network, here the competition is hotting up. Many Finnish and other companies are building their logistics warehouses and searching for reliable local business partners, who will be in charge of delivery network. Finnish Itella delivers small parcels and packages in Moscow and St. Petersburg, and will actively grow in other Russian locations, too. Onninen recently opened their warehouse in St. Petersburg which is mainly focusing on construction materials. DHL, UPS, FedEx and other global players are active in Russia. Thus, there are vast opportunities in the logistics services related to the transport sector, which are noticed by Finnish companies.
Interviewed by Anna Nezhinskaya
our reference
In January 2007 aggregate volume of large-capacity containers transported by railway and sea transport of the Western basin of the RF within Russia- Europe – Russia communication made 1.033.512 TEU
In January –September 2007 the volume of large-capacity containers transported by railways via land border crossings within Europe – Russia – Europe communication amounted to 29.804 TEU including:
• via Krasnoye – Brest border crossing – 13.540 containers (+134% year-on-year), transportation on the direction West-East is implemented mainly by “Eastern Wind” and “Rotterdam – Brest” block- trains on the route Berlin/Rotterdam – Moscow and further on to the industrial centers of Russia and Kazakhstan;
• via Zilupe – Sebezh border crossing – 16.264 containers (+300% year-on-year), transportation is implemented by “Balticatransit” block-train on the route Baltic ports - Kazakhstan /Uzbekistan in transit mode along the Russian railways
The volume of large-capacity containers transported by sea between Russia and Europe in January – June 2007:
In general in H1 2007 the ports of North-West basin handled 878.580 TEU (+124.8%) from this amount export takes 390.521 TEU (+119.1%) and import share makes 459.820 TEU (+129.7%).
In H1 2007 the Sea Commercial Port of Saint Petersburg handled 772.755 containers (against 144.999 handled in 2006)
In H1 2007 the Sea Commercial Port of Kaliningrad handled 75.501 containers (against 106.729 handled in 2006).
In H1 2007 the Sea Commercial Port of Novorossiysk handled 155.452 containers (against 224.899 in 2006).
Euroterminal (Slavkov, Poland)
Euroterminal belongs to Centrala Zaopatzenia Hutnictwa (CZH S.A.) JSC, acting member of CCTT.
The terminal’s major advantage is accesses for both gauge standards (1435 and 1520 mm).
Handling capacity of the complex amounts to 35 000 containers and about one million tons of cargo per year. Now the programme of terminal development is implemented (2007–2008). After reconstruction is completed the terminal will be capable to handle 70 000 containers annually. In future terminal capacity will reach 210 thousand containers per year.
European Regional Fund of Development and the Polish Government perform as investors of the terminal’s reconstruction. Aggregate investment volume amounts to EUR 16.6 mln.
The project includes:
1. Construction of the multifunctional warehouse with the area of 2.700 m2 and covered warehousing area (3.600 m2).
2. Construction of container platform – 12.950 m2 (400 m X 51.9 m).
3. Development of handling capacities, accesses and parking construction.
[~DETAIL_TEXT] => – Mrs. Tiirikainen, what are the most important joint projects of Russia and Finland?
– The joint effort by Russian Railways (RZD) and Finnish State Railways (VR) is by far the most effective and far reaching effort in the transport sector: it affects both the passenger and cargo traffic. These two organizations have joined forces to create a fast-speed passenger train connection between Helsinki and St. Petersburg, later on also between Moscow and Helsinki. Their company is called Karelian Trains, which has already signed a purchase order for 4 high-speed Pendolino trains from Alstom. These trains will be manufactured by Alstom’s daughter company Fiat Ferroviaria in Savigliano, Italy. The high-speed trains will start operating between St. Petersburg and Helsinki latest in 2010, and the travel time will be cut down from 5 hours to 3 hrs. There will be four trains to each direction every day of the week. All customs and boarder check-up procedures will be done on-board the moving train. In both countries the new rail tracks and improvements to existing railroad network to facilitate the new high speed connection are being built. In 2006, the amount of passengers between St. Petersburg and Helsinki reached 200 000. Finnish State Railways is expecting this to increase threefold within the next 5 years.
Together these two companies also aim at taking 30% of the overall Finnish-Russian transit traffic of new cars. According to Mr Matti Andersson, Marketing Manager, International Trade and Service Providers VR, in 2006 only 3% of the car transit was transferred by railroad. The amount of transit cars in 2006 totalled 530 000 cars. RZD and VR plan to carry 100 000 cars by end of 2008, and by 2010 already 300 000 cars. Transferring cargo from trucks to railroad effectively diminishes wear and tear of the road network, helps to solve the problems with the long queues at the border points, and helps to reduce the load caused by truck fumes to the ecology. TransSiberian railroad will be put to effective use by the partners, ensuring smooth container shipments via railroad from Finnish ports through Russia to China. There is also a container train connection called “Severnoye Siyanye” between Moscow and Kouvola in Finland – it takes only 1 day on its way.
– Do you consider Russia’s investment climate attractive? What is to be done to improve it?
– Investments throughout Russian Federation are growing fast, and this is also true for the North-West of Russia. According to Rosstat, investments in Russia grew 27,2% in June 2007 compared with the previous year. Capital investments during January – August 2007 grew by almost 25%.
St. Petersburg and the Leningrad region have enacted an investor-friendly legislation; which includes various tax concessions for the investors. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade, and also the Committee for Investments and Strategic Projects are very supportive towards investors, ready to meet with them, and facilitate other meetings between the would-be investors, government officials, organizations and business executives. The same goes for the Leningrad region Committee for Economic Development. The St. Petersburg Committee for Economic Development, Industrial Policy and Trade publishes each year an excellent guide for all investors (in Russian and English): “How to invest in Saint-Petersburg”. These Committees also actively promote their regions abroad, when participating on official tours often headed by the Governor of St. Petersburg Mrs Matvienko.
The employees representing the administration in the city, regional and local levels openly discuss also the challenges of their own area with the potential investors: what is the planning process like, has the general plan for the area been approved, what is the infrastructure of the area, and are there enough skilled work force available for the would-be investor.
Other regions should join St. Petersburg, and issue their own guidelines for investors in English – this would make it a lot easier for foreign companies to understand what is required of them.
What could be done more efficiently – the first thing that comes into mind is the slow process in getting a planning permission for building anything in St. Petersburg. The process used to take up to a year, now it takes at least 18 months. The various Committees controlling and supervising building works could speed up their own internal processes, and cooperate with each other in order to facilitate the customer. It takes in average 29 permissions from various instances of St. Petersburg to obtain a planning permission for building works. In order to get the 29 permissions, a great amount of paperwork is needed for each separate permission, and several meetings with the officials have to be conducted. In Finland, the planning permission is given by one instance, the Institute for Supervising Civil Engineering (Rakennustarkastusvirasto): they have an office network throughout the country, a ready-made form for applying the permission, and inspectors who advise on all matters related to the permission.
Finnish investors are expectant of Russia’s joining into the WTO – membership in the World Trade Organization will firmly integrate Russia’s economy into the global economy, and will lead into standardization of trade practices between Russia and its business partners, including Finnish companies.
– What makes Russia attractive for Finnish investors? How many of them come to the Russian Federation market every year on average?
– Russia is extremely important to the Finnish investors. Russian Federation offers a vast base of not only raw materials such as gas, oil, timber and minerals, but an increasingly competitive base for Finnish companies to locate their business in Russia. Finns have brought industrial plants and service organizations into Russia, and export the goods made locally in Russia to global markets. Confidence in Russia as a desired investment location is growing among Finns: Ruukki Group has signed an investment agreement with Kostroma government, where Ruukki Group has undertaken to build a cellulose manufacturing plant – the first ever Finnish-owned cellulose plant in Russia! StoraEnso has decided to investigate a possibility to build such a plant in Russia, too. Russia offers huge markets for Finnish goods and services, plenty of skilled workforce at competitive cost, and is located next door to Finland with good railroad, shipping, road and flight connections.
There are currently over 450 Finnish companies located in St. Petersburg with their own daughter company, JV or a representative office. In average, the annual growth of Finnish companies in Russia is around 15-20%.
– What problems do Finnish companies face in Russia?
– The traditional problems caused by bureaucracy, corruption, interpretation of legislation and ever-changing laws remain a problem. Customs procedures and other issues related to border crossing are also a problem. Difficulties are caused by a lack of consistent and reliable logistical network, which would take care of the goods imported into Russia from Finland all the way from the border (or from Finland) through customs inspection, storage and delivery to end customer anywhere in Russia. Lack of skilled work force is also becoming a show-stopper for Finnish and other companies.
– Is the cooperation between the Russian and Finnish customs bodies efficient? What should be done to improve it?
– The so called Green Corridor has proved to speed up the customs procedures significantly. Companies participating in this experiment are only few, they use electronic documentation, whereby all the paperwork is forwarded from Finland to Russia and vice versa in electronic form. This guarantees that the information on the documentation is exactly identical on both sides of the border, and there cannot be any misrepresentation of the goods brought into Russia/Finland. Thus, the Russian customs officials know exactly in advance what the cargo includes and when it reaches the border point. This allows for speedier check-up of the cargo, which saves overall time spent on the roads. This electronic procedure should be introduced to all companies, which regularly cross the border between Russia and Finland. It can also be used for sea and rail shipments, not only trucks.
The officials have conducted regular meetings, which allows for open and honest discussion of the problems and facilitates mutual willingness to solve these obstacles at the crossing points. Together, they have given their recommendations to their respective ministries. Without these regular meetings and work done in these groups, the problems would be far bigger than they currently are.
– The Russian and the Finnish are making joint efforts to improve the situation on the border. What will be done to reduce the queues in the near future?
– The transit traffic and other traffic from Finland into Russia has grown from 300 000 tons in 2002 to 900 000 tons in autumn 2007. This obviously causes queues at all border crossings, although the amount of crossings is increasing: there are currently 8 official border land crossings: the Saimaa Canal has the boarder crossing officially either in Vyborg or in Lappeenranta. Vainikkala/Buslovskaya and Vartius/Kivijarvi are railroad crossings only. For car and truck traffic border crossings are located at Vaalimaa/Torfyanovka, Nuijamaa/Brusnichnoye; Imatra/Svetogorsk (also railroad crossing point), Vartius/Kivijarvi (also railroad crossing point), Salla/Kelloselka and Kuusamo/Suopera. In addition, there are several unofficial (19) border crossing points, which are used mainly by the trucks bringing timber from Russia into Finland.
The officials in both countries are working on opening a new border crossing at Parikkala. More customs and border guards have been put in place in Vaalimaa and Torfyanovka. Torfyanovka aims at processing 1000 trucks per day by end of 2007. Current rate is at 650 – 700. The same effectiveness can be introduced at other border crossings, too. In addition to this, Russia has enacted a new law, which reduces the amount of organizations working immediately at the border. In Finland, there are only two organizations: the customs and the border guards. In Russia, there are 8 organizations working at the border crossing point, which causes traffic jams on the Russian side. The new law needs to be implemented as soon as possible to speed up the road traffic between the two countries. Finnish government will invest 24 million euros in a truck parking lot at Vaalimaa, which will be ready by end of 2008. The parking lot can house 1000 trucks, which means 30 km less trucks queuing on the Finnish side. Currently the queues can reach as far as 80 km from the Finnish border point of Vaalimaa, and the narrow road leaves too little space for other road traffic.
Trucks are also guided to other crossing points to alleviate the problems at Vaalimaa. The drivers are given the exact border crossing point already at the Finnish port, where they pick their cargo. This has, unfortunately, resulted in queues in Imatra and Nuijamaa, where the traffic used to be almost free-flowing. Further parking lots can be introduced, if the first one is a success.
Transferring the cargo from trucks onto railroad will alleviate many of the problems with border crossings. The other part of the solution lies in Russian ports: when the ports are equipped to handle the cargo (including cars) and an effective logistics network covering the storage and further delivery of the cargo is in place, the truck traffic will significantly diminish on both sides of the border.
– Russian and Finninsh transport companies not only cooperate, but also compete. What are the hottest areas in this competition?
– The majority of the truck traffic between our countries is firmly in the hands of Russian companies: 95% of the trucks belong to Russian entrepreneurs. Finnish companies are not competitive enough to win more market share. On the air traffic, Pulkovo Airlines and Finnair are jointly managing the flights between St. Petersburg and Helsinki, so the market is shared between them. On the railroad traffic, there is very little competition due to government restrictions in both countries. Sea traffic has more competition with global shipping companies wanting to have their share of the cargo traffic arriving in and parting from Russia.
As for the logistics network, here the competition is hotting up. Many Finnish and other companies are building their logistics warehouses and searching for reliable local business partners, who will be in charge of delivery network. Finnish Itella delivers small parcels and packages in Moscow and St. Petersburg, and will actively grow in other Russian locations, too. Onninen recently opened their warehouse in St. Petersburg which is mainly focusing on construction materials. DHL, UPS, FedEx and other global players are active in Russia. Thus, there are vast opportunities in the logistics services related to the transport sector, which are noticed by Finnish companies.
Interviewed by Anna Nezhinskaya
our reference
In January 2007 aggregate volume of large-capacity containers transported by railway and sea transport of the Western basin of the RF within Russia- Europe – Russia communication made 1.033.512 TEU
In January –September 2007 the volume of large-capacity containers transported by railways via land border crossings within Europe – Russia – Europe communication amounted to 29.804 TEU including:
• via Krasnoye – Brest border crossing – 13.540 containers (+134% year-on-year), transportation on the direction West-East is implemented mainly by “Eastern Wind” and “Rotterdam – Brest” block- trains on the route Berlin/Rotterdam – Moscow and further on to the industrial centers of Russia and Kazakhstan;
• via Zilupe – Sebezh border crossing – 16.264 containers (+300% year-on-year), transportation is implemented by “Balticatransit” block-train on the route Baltic ports - Kazakhstan /Uzbekistan in transit mode along the Russian railways
The volume of large-capacity containers transported by sea between Russia and Europe in January – June 2007:
In general in H1 2007 the ports of North-West basin handled 878.580 TEU (+124.8%) from this amount export takes 390.521 TEU (+119.1%) and import share makes 459.820 TEU (+129.7%).
In H1 2007 the Sea Commercial Port of Saint Petersburg handled 772.755 containers (against 144.999 handled in 2006)
In H1 2007 the Sea Commercial Port of Kaliningrad handled 75.501 containers (against 106.729 handled in 2006).
In H1 2007 the Sea Commercial Port of Novorossiysk handled 155.452 containers (against 224.899 in 2006).
Euroterminal (Slavkov, Poland)
Euroterminal belongs to Centrala Zaopatzenia Hutnictwa (CZH S.A.) JSC, acting member of CCTT.
The terminal’s major advantage is accesses for both gauge standards (1435 and 1520 mm).
Handling capacity of the complex amounts to 35 000 containers and about one million tons of cargo per year. Now the programme of terminal development is implemented (2007–2008). After reconstruction is completed the terminal will be capable to handle 70 000 containers annually. In future terminal capacity will reach 210 thousand containers per year.
European Regional Fund of Development and the Polish Government perform as investors of the terminal’s reconstruction. Aggregate investment volume amounts to EUR 16.6 mln.
The project includes:
1. Construction of the multifunctional warehouse with the area of 2.700 m2 and covered warehousing area (3.600 m2).
2. Construction of container platform – 12.950 m2 (400 m X 51.9 m).
3. Development of handling capacities, accesses and parking construction.
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Recognising the positive trends in the economies of Russia and Belarus, First Deputy Head of the Byelorussian Railway Vladimir Laptinsky hopes the current transit volume will not drop and the domestic transportation profitability will grow.Array
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[DETAIL_TEXT] => Transit Growth Is Stable
– Mr. Laptinsky, what routes do you consider most important for freight transportation from the standpoint of the Byelorussian railway development?
– The most important one has always been and will be Russia to the Baltic States. There are the ports of Ventspils, Klaipeda, Kaliningrad, and most cargo is carried to them. It seems to me that transit transportation on the route will grow steadily, because Russia will always strive to support its western region – the Kaliningrad oblast. As for Klaipeda and Ventspils, oil products and solid bulk are carried via these ports. These cargoes will hardly be re-routed anywhere in the near future. Moreover, their volume continues to grow simultaneously with the development of the CIS’s and the Baltic states’ economies. Unfortunately, the wagons returning from the ports to Russia are usually empty. Although, a small amount of cargo is still carried on the route.
– What are the trends for this type of transportation?
– Nowadays we observe a steady growth of transit transportation, which is obvious if you look at the results of the seven months of 2007. During that period, the throughput of the Byelorussian Railway increased by 10.5% year-on-year. Transit made 70% of the transported volume. Transit transportation is profitable. Moreover, it enables us to partly compensate for the unprofitable suburban transportation, domestic passenger as well as domestic freight transportation. The latter is not profitable, and only 82% of money spent on them is recouped by the revenue.
– Is it planned to construct an additional line Zaolsha – Bigosovo to carry Russian transit to Latvia?
– At the moment we will not develop this line, because some oil products we transport have been re-routed to Latvia via Lithuania via the Benyakoni border crossing. On the line Zaolsha – Bigosovo the situation is normal now, and no additional measures are required to improve transportation there.
– From time to time, it was suggested that a Byelorussian port be constructed on the Baltic Sea, in particular in Kaliningrad or in the Leningrad region (Russia). What is the attitude of Byelorussian railwaymen to such suggestions?
– Becoming owners of a part of any Baltic ports seems unreasonable to us. Nowadays we can make use of the competition between the ports, getting discounts and choosing the most profitable terms. If there is a terminal owned by Byelorussia in any Baltic port, we will have to direct as much cargo as we can in order to load it. Thus, we will not be able to create competitive conditions for a consignor. It is not profitable for us.
– What are your relations with colleagues from other states like?
– We have no disagreements with them. We participate in a number of joint projects. Recently, we launched a logistical enterprise in cooperation with German, Russian and Polish colleagues. Its aim is to attract additional cargoes to the railway of the 2nd and part of the 9th international transport corridors. We work actively in the frames of the Eurasian Economic Community (EurAsEC) to attract additional freight to Byelorussian railway. An office for our railway was opened in Kazakhstan recently. It works actively to attract cargo from China, Mongolia and Kazakhstan to transport it as transit via the Byelorussian territory to the Baltic ports. Negotiating with Polish railwaymen recently, we discussed the issues of coal reloading at the border. The problem is that they do not always give their gondola cars to us so that we could reload coal on Byelorussian territory. Their effort to fulfill more operations is quite clear, meanwhile the wagons are idle. 400-500 wagons used to accumulate on our territory. Besides, passenger trains from Poland are often behind schedule, especially the № 22s and № 12s. We asked the Polish colleagues to solve the problem, because it is very difficult to make them run on schedule and give them to the Moscow Railway, which in turn also has problems in receiving these trains on overloaded Moscow railway stations. Besides, the Polish Railway is being reorganized, and sometimes it is impossible to find the person in charge for this or that activity. So, we asked our Polish colleagues to tell us who were the people in charge so we could solve arising problems fast.
– What do you think about the plans for a railway terminal on Polish territory (in Sławkуw) that has already been named “a dry port in the centre of Europe”? What does it mean for the Byelorussian Railway?
- Now these are just plans. When the work begins, we will see what will come of it.
Automatic Change of Bogies: a Small Revolution
– Is implementation of the automatic gauge-width change system SUW2000 a realistic prospect?
– Putting this system into operation will require new rolling stock, and this means that the whole technology of wagon production must be changed. Now we are discussing the possible implementation of the system in the Brest junction. Perhaps, the system will be put into operation, but no decision has been made yet.
– OAO RZD is a strategic partner for the Byelorussian Railway. What are the prospects for further cooperation with Russian colleagues in your opinion?
– First of all, all the documentation we use in our work is developed in Russian scientific institutions. These are documents on train traffic safety, labour protection as well as technical content of the main equipment and facilities. The passenger and freight wagons, locomotives and new types of hauling facilities we need are produced in Russia. For example, now a new Russian electric locomotive is tested on the Byelorussian Railway. It pulls trains № 7/8 and № 9/10 on the Moscow – Brest line. On some sections of the Byelorussian electrified railway direct current is used, at others the alternative current. The specific feature of the new Russian locomotive, 2EP10 by name, is that it can operate using both current and alternative current, thus its use is more efficient. In future we also count on Russian wagon and locomotive suppliers, especially taking into account the difficulties we are already facing in hauling services for train traffic and the amount of wagons. But we do not sit twiddling our thumbs. In recent years, we have launched the production of freight gondola cars, tank wagons and wagons for mineral fertilizer transportation at Mogilevwagon enterprise in Mogilev. Besides, at the wagon repair plants in Minsk and Gomel we are trying to organize passenger wagon manufacture. In May, the Minsk wagon repair plant presented the first two passenger wagons it produced. Russia helped to construct the wagons: they have Russian bodies, and specialists at the Tverskoy plant participated in their assembly at the initial stage. We also plan to produce components in Byelorussia. Taking into account that the Byelorussian rolling stock park is worn, and the deterioration of wagons and locomotives amounts to 79%, we will purchase new locomotives and wagons. As for the latter, we will also produce them.
– What are the principles used by the Byelorussian Railway when it interacts with forwarding companies? Are there any preferences for some of them?
– Nowadays, we cooperate with more than a hundred forwarding companies, and only half of them are Byelorussian residents. I believe that any limiting of cooperation does not hold good prospects. The services market must be free, so we have equal conditions for all the forwarding companies. For example, the Byelorussian Railway used to allow resident companies to make only 50% prepayment, while non-resident ones were to pay the whole sum. Since Q1 of 2006 we have a single approach: all forwarders operate on the terms of 100% prepayment and with a permanent code.
– Is the work of the Byelorussian Railway profitable nowadays?
– This year the profitability of the railway is high enough, and we plan that in 2007 the economic efficiency will exceed 18%. As I have already said, domestic transportation – both passenger and freight– is still detrimental. Now we are asking the Ministry of Economy to make tariffs on cargo transportation profitable by the beginning of 2008. Until now, the Economy Ministry has increased domestic tariffs pro rata of inflation – by about 0.7% a month. If the tariffs are increased by at least 3.5%, then by the end of the year domestic freight transportation, 82% of which is paid back, will be loss-free.
– Have ways of optimising suburban transportation as, for example, rail buses been discussed?
– We believe it unreasonable to use them. The Minsk-Passazhirsky railway station sometimes, especially in summer, can hardly service even usual trains and electric suburban trains. If there are rail buses, traffic could be paralyzed. The same thing goes for the suggestion to construct double-deck wagons. It is possible to build them, but where will they be used? To use such wagons we will have to rebuild the contact system, bridges and overpasses. We think out task is to create more convenient conditions for passengers by purchasing new modern electric and diesel trains. Now we work actively to improve passenger servicing in suburban trains. To do it, a litter bin is established in every wagon of suburban trains. The Byelorussian Railway also equips suburban trains with dry closets, so that passengers may use them in winter. At the moment, toilets just freeze in winter months. We have no means to realise fantastic projects. We have to be realists. We strive to do what will really improve conditions for consumers of all types of transportation.
– What will change when the Centre of Transportation Management (CTM) is put into operation?
– The launched CTM will enable us to manage train traffic and the locomotive park more efficiently. The management will be more technological. The CTM will provide an opportunity to improve the control of wagon flows. As a result, there will be definite economic benefits for the railways, because the turnover per freight wagon will increase, the output per locomotive will grow, the average daily haulage of a locomotive and the train weight will also increase. Now all this is very important for us. The CTM is not an innovation in the railway sector. CTMs have been operating for a long time on Russian railways, and their efficiency has been proved.
“No” to Privatization
– What are the prospects of reforming the Byelorussian Railway as has been done in Kazakhstan and Russia? Has the issue of railway privatisation ever been discussed?
– The issue of privatization has never been discussed. The Byelorussian Railway will remain a state enterprise. As for reforms, to enter the legislative field of the Republic of Belarus, the structure of the Byelorussian Railway is being reformed now to reduce the amount of juridical persons in it. Considering the experience of Russia, we are going to turn the six divisions of the railway into affiliates of the Byelorussian Railway organization. Thus, we will be able to control fund movement and the basic assets, to make the tax payment system more transparent. These plans are now being developed.
– Could you comment on the state of the Byelorussian Railway’s equipment, in particular from the standpoint of the existing plans to open high-speed travel?
– On the line Brest – Minsk – Orsha we are actively improving the railway equipment. This year the speed of passenger trains is to increase to 160 km/h. We have no other problems. The planned railway track repairs are being made. New rails and crossties are purchased and replace the old ones. Wood crossties are widely used. However, on the main lines, where we must provide high speed and good capacity, only reinforced concrete crossties are used.
– Is container and contrailer transportation applied at the Byelorussian Railway? As far as I know, special research into contrailer transportation was held.
– Yes, it was. But its results showed that contrailer transportation is not profitable for the railway. Meanwhile, container transportation had good prospects, and we develop them actively. On the basis of Berliintertrans company (which used to specialise in cargo forwarding only), incorporated into the Byelorussian Railway, it is planned to launch a company that will also transport containerised goods. All the containers and fitting platforms available at the Byelorussian Railway are given to the company’s basic assets. Besides, a joint venture was launched in cooperation with a Russian company Roscontainer in Brest. It also specializes in container transportation. There are regular block trains, such as “Eastern Wind”, “Mercury” and “Viking”. The future is with container transportation. That is why we started to produce containers in the Osipovichskoye wagon depot. Now it produces 20-ton containers, and is to start production of 40 TEU containers. In future we will manufacture refcontainers, the demand for which is very high.
– What is your forecast for the Byelorussian Railway’s future?
– We are a cargo carrier. That means that we depend on consignors and on the economy development. Nowadays the economy of the main freight-producing regions, in particular Russia, is developing rather fast. The Byelorussian economy is also developing rapidly. These processes positively influence the work of the railway. Today, exports exceed imports. In 7 months of 2007, export grew by 4% year-on-year, and import fell by 3%. These trends make me optimistic about the prospects of the Byelorussian Railway.
By Viktor Stepanov
[~DETAIL_TEXT] => Transit Growth Is Stable
– Mr. Laptinsky, what routes do you consider most important for freight transportation from the standpoint of the Byelorussian railway development?
– The most important one has always been and will be Russia to the Baltic States. There are the ports of Ventspils, Klaipeda, Kaliningrad, and most cargo is carried to them. It seems to me that transit transportation on the route will grow steadily, because Russia will always strive to support its western region – the Kaliningrad oblast. As for Klaipeda and Ventspils, oil products and solid bulk are carried via these ports. These cargoes will hardly be re-routed anywhere in the near future. Moreover, their volume continues to grow simultaneously with the development of the CIS’s and the Baltic states’ economies. Unfortunately, the wagons returning from the ports to Russia are usually empty. Although, a small amount of cargo is still carried on the route.
– What are the trends for this type of transportation?
– Nowadays we observe a steady growth of transit transportation, which is obvious if you look at the results of the seven months of 2007. During that period, the throughput of the Byelorussian Railway increased by 10.5% year-on-year. Transit made 70% of the transported volume. Transit transportation is profitable. Moreover, it enables us to partly compensate for the unprofitable suburban transportation, domestic passenger as well as domestic freight transportation. The latter is not profitable, and only 82% of money spent on them is recouped by the revenue.
– Is it planned to construct an additional line Zaolsha – Bigosovo to carry Russian transit to Latvia?
– At the moment we will not develop this line, because some oil products we transport have been re-routed to Latvia via Lithuania via the Benyakoni border crossing. On the line Zaolsha – Bigosovo the situation is normal now, and no additional measures are required to improve transportation there.
– From time to time, it was suggested that a Byelorussian port be constructed on the Baltic Sea, in particular in Kaliningrad or in the Leningrad region (Russia). What is the attitude of Byelorussian railwaymen to such suggestions?
– Becoming owners of a part of any Baltic ports seems unreasonable to us. Nowadays we can make use of the competition between the ports, getting discounts and choosing the most profitable terms. If there is a terminal owned by Byelorussia in any Baltic port, we will have to direct as much cargo as we can in order to load it. Thus, we will not be able to create competitive conditions for a consignor. It is not profitable for us.
– What are your relations with colleagues from other states like?
– We have no disagreements with them. We participate in a number of joint projects. Recently, we launched a logistical enterprise in cooperation with German, Russian and Polish colleagues. Its aim is to attract additional cargoes to the railway of the 2nd and part of the 9th international transport corridors. We work actively in the frames of the Eurasian Economic Community (EurAsEC) to attract additional freight to Byelorussian railway. An office for our railway was opened in Kazakhstan recently. It works actively to attract cargo from China, Mongolia and Kazakhstan to transport it as transit via the Byelorussian territory to the Baltic ports. Negotiating with Polish railwaymen recently, we discussed the issues of coal reloading at the border. The problem is that they do not always give their gondola cars to us so that we could reload coal on Byelorussian territory. Their effort to fulfill more operations is quite clear, meanwhile the wagons are idle. 400-500 wagons used to accumulate on our territory. Besides, passenger trains from Poland are often behind schedule, especially the № 22s and № 12s. We asked the Polish colleagues to solve the problem, because it is very difficult to make them run on schedule and give them to the Moscow Railway, which in turn also has problems in receiving these trains on overloaded Moscow railway stations. Besides, the Polish Railway is being reorganized, and sometimes it is impossible to find the person in charge for this or that activity. So, we asked our Polish colleagues to tell us who were the people in charge so we could solve arising problems fast.
– What do you think about the plans for a railway terminal on Polish territory (in Sławkуw) that has already been named “a dry port in the centre of Europe”? What does it mean for the Byelorussian Railway?
- Now these are just plans. When the work begins, we will see what will come of it.
Automatic Change of Bogies: a Small Revolution
– Is implementation of the automatic gauge-width change system SUW2000 a realistic prospect?
– Putting this system into operation will require new rolling stock, and this means that the whole technology of wagon production must be changed. Now we are discussing the possible implementation of the system in the Brest junction. Perhaps, the system will be put into operation, but no decision has been made yet.
– OAO RZD is a strategic partner for the Byelorussian Railway. What are the prospects for further cooperation with Russian colleagues in your opinion?
– First of all, all the documentation we use in our work is developed in Russian scientific institutions. These are documents on train traffic safety, labour protection as well as technical content of the main equipment and facilities. The passenger and freight wagons, locomotives and new types of hauling facilities we need are produced in Russia. For example, now a new Russian electric locomotive is tested on the Byelorussian Railway. It pulls trains № 7/8 and № 9/10 on the Moscow – Brest line. On some sections of the Byelorussian electrified railway direct current is used, at others the alternative current. The specific feature of the new Russian locomotive, 2EP10 by name, is that it can operate using both current and alternative current, thus its use is more efficient. In future we also count on Russian wagon and locomotive suppliers, especially taking into account the difficulties we are already facing in hauling services for train traffic and the amount of wagons. But we do not sit twiddling our thumbs. In recent years, we have launched the production of freight gondola cars, tank wagons and wagons for mineral fertilizer transportation at Mogilevwagon enterprise in Mogilev. Besides, at the wagon repair plants in Minsk and Gomel we are trying to organize passenger wagon manufacture. In May, the Minsk wagon repair plant presented the first two passenger wagons it produced. Russia helped to construct the wagons: they have Russian bodies, and specialists at the Tverskoy plant participated in their assembly at the initial stage. We also plan to produce components in Byelorussia. Taking into account that the Byelorussian rolling stock park is worn, and the deterioration of wagons and locomotives amounts to 79%, we will purchase new locomotives and wagons. As for the latter, we will also produce them.
– What are the principles used by the Byelorussian Railway when it interacts with forwarding companies? Are there any preferences for some of them?
– Nowadays, we cooperate with more than a hundred forwarding companies, and only half of them are Byelorussian residents. I believe that any limiting of cooperation does not hold good prospects. The services market must be free, so we have equal conditions for all the forwarding companies. For example, the Byelorussian Railway used to allow resident companies to make only 50% prepayment, while non-resident ones were to pay the whole sum. Since Q1 of 2006 we have a single approach: all forwarders operate on the terms of 100% prepayment and with a permanent code.
– Is the work of the Byelorussian Railway profitable nowadays?
– This year the profitability of the railway is high enough, and we plan that in 2007 the economic efficiency will exceed 18%. As I have already said, domestic transportation – both passenger and freight– is still detrimental. Now we are asking the Ministry of Economy to make tariffs on cargo transportation profitable by the beginning of 2008. Until now, the Economy Ministry has increased domestic tariffs pro rata of inflation – by about 0.7% a month. If the tariffs are increased by at least 3.5%, then by the end of the year domestic freight transportation, 82% of which is paid back, will be loss-free.
– Have ways of optimising suburban transportation as, for example, rail buses been discussed?
– We believe it unreasonable to use them. The Minsk-Passazhirsky railway station sometimes, especially in summer, can hardly service even usual trains and electric suburban trains. If there are rail buses, traffic could be paralyzed. The same thing goes for the suggestion to construct double-deck wagons. It is possible to build them, but where will they be used? To use such wagons we will have to rebuild the contact system, bridges and overpasses. We think out task is to create more convenient conditions for passengers by purchasing new modern electric and diesel trains. Now we work actively to improve passenger servicing in suburban trains. To do it, a litter bin is established in every wagon of suburban trains. The Byelorussian Railway also equips suburban trains with dry closets, so that passengers may use them in winter. At the moment, toilets just freeze in winter months. We have no means to realise fantastic projects. We have to be realists. We strive to do what will really improve conditions for consumers of all types of transportation.
– What will change when the Centre of Transportation Management (CTM) is put into operation?
– The launched CTM will enable us to manage train traffic and the locomotive park more efficiently. The management will be more technological. The CTM will provide an opportunity to improve the control of wagon flows. As a result, there will be definite economic benefits for the railways, because the turnover per freight wagon will increase, the output per locomotive will grow, the average daily haulage of a locomotive and the train weight will also increase. Now all this is very important for us. The CTM is not an innovation in the railway sector. CTMs have been operating for a long time on Russian railways, and their efficiency has been proved.
“No” to Privatization
– What are the prospects of reforming the Byelorussian Railway as has been done in Kazakhstan and Russia? Has the issue of railway privatisation ever been discussed?
– The issue of privatization has never been discussed. The Byelorussian Railway will remain a state enterprise. As for reforms, to enter the legislative field of the Republic of Belarus, the structure of the Byelorussian Railway is being reformed now to reduce the amount of juridical persons in it. Considering the experience of Russia, we are going to turn the six divisions of the railway into affiliates of the Byelorussian Railway organization. Thus, we will be able to control fund movement and the basic assets, to make the tax payment system more transparent. These plans are now being developed.
– Could you comment on the state of the Byelorussian Railway’s equipment, in particular from the standpoint of the existing plans to open high-speed travel?
– On the line Brest – Minsk – Orsha we are actively improving the railway equipment. This year the speed of passenger trains is to increase to 160 km/h. We have no other problems. The planned railway track repairs are being made. New rails and crossties are purchased and replace the old ones. Wood crossties are widely used. However, on the main lines, where we must provide high speed and good capacity, only reinforced concrete crossties are used.
– Is container and contrailer transportation applied at the Byelorussian Railway? As far as I know, special research into contrailer transportation was held.
– Yes, it was. But its results showed that contrailer transportation is not profitable for the railway. Meanwhile, container transportation had good prospects, and we develop them actively. On the basis of Berliintertrans company (which used to specialise in cargo forwarding only), incorporated into the Byelorussian Railway, it is planned to launch a company that will also transport containerised goods. All the containers and fitting platforms available at the Byelorussian Railway are given to the company’s basic assets. Besides, a joint venture was launched in cooperation with a Russian company Roscontainer in Brest. It also specializes in container transportation. There are regular block trains, such as “Eastern Wind”, “Mercury” and “Viking”. The future is with container transportation. That is why we started to produce containers in the Osipovichskoye wagon depot. Now it produces 20-ton containers, and is to start production of 40 TEU containers. In future we will manufacture refcontainers, the demand for which is very high.
– What is your forecast for the Byelorussian Railway’s future?
– We are a cargo carrier. That means that we depend on consignors and on the economy development. Nowadays the economy of the main freight-producing regions, in particular Russia, is developing rather fast. The Byelorussian economy is also developing rapidly. These processes positively influence the work of the railway. Today, exports exceed imports. In 7 months of 2007, export grew by 4% year-on-year, and import fell by 3%. These trends make me optimistic about the prospects of the Byelorussian Railway.
By Viktor Stepanov
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[PREVIEW_TEXT] => Recognising the positive trends in the economies of Russia and Belarus, First Deputy Head of the Byelorussian Railway Vladimir Laptinsky hopes the current transit volume will not drop and the domestic transportation profitability will grow.
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[ELEMENT_META_TITLE] => Byelorussian Railway: Optimistic, But Careful
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[DETAIL_TEXT] => Transit Growth Is Stable
– Mr. Laptinsky, what routes do you consider most important for freight transportation from the standpoint of the Byelorussian railway development?
– The most important one has always been and will be Russia to the Baltic States. There are the ports of Ventspils, Klaipeda, Kaliningrad, and most cargo is carried to them. It seems to me that transit transportation on the route will grow steadily, because Russia will always strive to support its western region – the Kaliningrad oblast. As for Klaipeda and Ventspils, oil products and solid bulk are carried via these ports. These cargoes will hardly be re-routed anywhere in the near future. Moreover, their volume continues to grow simultaneously with the development of the CIS’s and the Baltic states’ economies. Unfortunately, the wagons returning from the ports to Russia are usually empty. Although, a small amount of cargo is still carried on the route.
– What are the trends for this type of transportation?
– Nowadays we observe a steady growth of transit transportation, which is obvious if you look at the results of the seven months of 2007. During that period, the throughput of the Byelorussian Railway increased by 10.5% year-on-year. Transit made 70% of the transported volume. Transit transportation is profitable. Moreover, it enables us to partly compensate for the unprofitable suburban transportation, domestic passenger as well as domestic freight transportation. The latter is not profitable, and only 82% of money spent on them is recouped by the revenue.
– Is it planned to construct an additional line Zaolsha – Bigosovo to carry Russian transit to Latvia?
– At the moment we will not develop this line, because some oil products we transport have been re-routed to Latvia via Lithuania via the Benyakoni border crossing. On the line Zaolsha – Bigosovo the situation is normal now, and no additional measures are required to improve transportation there.
– From time to time, it was suggested that a Byelorussian port be constructed on the Baltic Sea, in particular in Kaliningrad or in the Leningrad region (Russia). What is the attitude of Byelorussian railwaymen to such suggestions?
– Becoming owners of a part of any Baltic ports seems unreasonable to us. Nowadays we can make use of the competition between the ports, getting discounts and choosing the most profitable terms. If there is a terminal owned by Byelorussia in any Baltic port, we will have to direct as much cargo as we can in order to load it. Thus, we will not be able to create competitive conditions for a consignor. It is not profitable for us.
– What are your relations with colleagues from other states like?
– We have no disagreements with them. We participate in a number of joint projects. Recently, we launched a logistical enterprise in cooperation with German, Russian and Polish colleagues. Its aim is to attract additional cargoes to the railway of the 2nd and part of the 9th international transport corridors. We work actively in the frames of the Eurasian Economic Community (EurAsEC) to attract additional freight to Byelorussian railway. An office for our railway was opened in Kazakhstan recently. It works actively to attract cargo from China, Mongolia and Kazakhstan to transport it as transit via the Byelorussian territory to the Baltic ports. Negotiating with Polish railwaymen recently, we discussed the issues of coal reloading at the border. The problem is that they do not always give their gondola cars to us so that we could reload coal on Byelorussian territory. Their effort to fulfill more operations is quite clear, meanwhile the wagons are idle. 400-500 wagons used to accumulate on our territory. Besides, passenger trains from Poland are often behind schedule, especially the № 22s and № 12s. We asked the Polish colleagues to solve the problem, because it is very difficult to make them run on schedule and give them to the Moscow Railway, which in turn also has problems in receiving these trains on overloaded Moscow railway stations. Besides, the Polish Railway is being reorganized, and sometimes it is impossible to find the person in charge for this or that activity. So, we asked our Polish colleagues to tell us who were the people in charge so we could solve arising problems fast.
– What do you think about the plans for a railway terminal on Polish territory (in Sławkуw) that has already been named “a dry port in the centre of Europe”? What does it mean for the Byelorussian Railway?
- Now these are just plans. When the work begins, we will see what will come of it.
Automatic Change of Bogies: a Small Revolution
– Is implementation of the automatic gauge-width change system SUW2000 a realistic prospect?
– Putting this system into operation will require new rolling stock, and this means that the whole technology of wagon production must be changed. Now we are discussing the possible implementation of the system in the Brest junction. Perhaps, the system will be put into operation, but no decision has been made yet.
– OAO RZD is a strategic partner for the Byelorussian Railway. What are the prospects for further cooperation with Russian colleagues in your opinion?
– First of all, all the documentation we use in our work is developed in Russian scientific institutions. These are documents on train traffic safety, labour protection as well as technical content of the main equipment and facilities. The passenger and freight wagons, locomotives and new types of hauling facilities we need are produced in Russia. For example, now a new Russian electric locomotive is tested on the Byelorussian Railway. It pulls trains № 7/8 and № 9/10 on the Moscow – Brest line. On some sections of the Byelorussian electrified railway direct current is used, at others the alternative current. The specific feature of the new Russian locomotive, 2EP10 by name, is that it can operate using both current and alternative current, thus its use is more efficient. In future we also count on Russian wagon and locomotive suppliers, especially taking into account the difficulties we are already facing in hauling services for train traffic and the amount of wagons. But we do not sit twiddling our thumbs. In recent years, we have launched the production of freight gondola cars, tank wagons and wagons for mineral fertilizer transportation at Mogilevwagon enterprise in Mogilev. Besides, at the wagon repair plants in Minsk and Gomel we are trying to organize passenger wagon manufacture. In May, the Minsk wagon repair plant presented the first two passenger wagons it produced. Russia helped to construct the wagons: they have Russian bodies, and specialists at the Tverskoy plant participated in their assembly at the initial stage. We also plan to produce components in Byelorussia. Taking into account that the Byelorussian rolling stock park is worn, and the deterioration of wagons and locomotives amounts to 79%, we will purchase new locomotives and wagons. As for the latter, we will also produce them.
– What are the principles used by the Byelorussian Railway when it interacts with forwarding companies? Are there any preferences for some of them?
– Nowadays, we cooperate with more than a hundred forwarding companies, and only half of them are Byelorussian residents. I believe that any limiting of cooperation does not hold good prospects. The services market must be free, so we have equal conditions for all the forwarding companies. For example, the Byelorussian Railway used to allow resident companies to make only 50% prepayment, while non-resident ones were to pay the whole sum. Since Q1 of 2006 we have a single approach: all forwarders operate on the terms of 100% prepayment and with a permanent code.
– Is the work of the Byelorussian Railway profitable nowadays?
– This year the profitability of the railway is high enough, and we plan that in 2007 the economic efficiency will exceed 18%. As I have already said, domestic transportation – both passenger and freight– is still detrimental. Now we are asking the Ministry of Economy to make tariffs on cargo transportation profitable by the beginning of 2008. Until now, the Economy Ministry has increased domestic tariffs pro rata of inflation – by about 0.7% a month. If the tariffs are increased by at least 3.5%, then by the end of the year domestic freight transportation, 82% of which is paid back, will be loss-free.
– Have ways of optimising suburban transportation as, for example, rail buses been discussed?
– We believe it unreasonable to use them. The Minsk-Passazhirsky railway station sometimes, especially in summer, can hardly service even usual trains and electric suburban trains. If there are rail buses, traffic could be paralyzed. The same thing goes for the suggestion to construct double-deck wagons. It is possible to build them, but where will they be used? To use such wagons we will have to rebuild the contact system, bridges and overpasses. We think out task is to create more convenient conditions for passengers by purchasing new modern electric and diesel trains. Now we work actively to improve passenger servicing in suburban trains. To do it, a litter bin is established in every wagon of suburban trains. The Byelorussian Railway also equips suburban trains with dry closets, so that passengers may use them in winter. At the moment, toilets just freeze in winter months. We have no means to realise fantastic projects. We have to be realists. We strive to do what will really improve conditions for consumers of all types of transportation.
– What will change when the Centre of Transportation Management (CTM) is put into operation?
– The launched CTM will enable us to manage train traffic and the locomotive park more efficiently. The management will be more technological. The CTM will provide an opportunity to improve the control of wagon flows. As a result, there will be definite economic benefits for the railways, because the turnover per freight wagon will increase, the output per locomotive will grow, the average daily haulage of a locomotive and the train weight will also increase. Now all this is very important for us. The CTM is not an innovation in the railway sector. CTMs have been operating for a long time on Russian railways, and their efficiency has been proved.
“No” to Privatization
– What are the prospects of reforming the Byelorussian Railway as has been done in Kazakhstan and Russia? Has the issue of railway privatisation ever been discussed?
– The issue of privatization has never been discussed. The Byelorussian Railway will remain a state enterprise. As for reforms, to enter the legislative field of the Republic of Belarus, the structure of the Byelorussian Railway is being reformed now to reduce the amount of juridical persons in it. Considering the experience of Russia, we are going to turn the six divisions of the railway into affiliates of the Byelorussian Railway organization. Thus, we will be able to control fund movement and the basic assets, to make the tax payment system more transparent. These plans are now being developed.
– Could you comment on the state of the Byelorussian Railway’s equipment, in particular from the standpoint of the existing plans to open high-speed travel?
– On the line Brest – Minsk – Orsha we are actively improving the railway equipment. This year the speed of passenger trains is to increase to 160 km/h. We have no other problems. The planned railway track repairs are being made. New rails and crossties are purchased and replace the old ones. Wood crossties are widely used. However, on the main lines, where we must provide high speed and good capacity, only reinforced concrete crossties are used.
– Is container and contrailer transportation applied at the Byelorussian Railway? As far as I know, special research into contrailer transportation was held.
– Yes, it was. But its results showed that contrailer transportation is not profitable for the railway. Meanwhile, container transportation had good prospects, and we develop them actively. On the basis of Berliintertrans company (which used to specialise in cargo forwarding only), incorporated into the Byelorussian Railway, it is planned to launch a company that will also transport containerised goods. All the containers and fitting platforms available at the Byelorussian Railway are given to the company’s basic assets. Besides, a joint venture was launched in cooperation with a Russian company Roscontainer in Brest. It also specializes in container transportation. There are regular block trains, such as “Eastern Wind”, “Mercury” and “Viking”. The future is with container transportation. That is why we started to produce containers in the Osipovichskoye wagon depot. Now it produces 20-ton containers, and is to start production of 40 TEU containers. In future we will manufacture refcontainers, the demand for which is very high.
– What is your forecast for the Byelorussian Railway’s future?
– We are a cargo carrier. That means that we depend on consignors and on the economy development. Nowadays the economy of the main freight-producing regions, in particular Russia, is developing rather fast. The Byelorussian economy is also developing rapidly. These processes positively influence the work of the railway. Today, exports exceed imports. In 7 months of 2007, export grew by 4% year-on-year, and import fell by 3%. These trends make me optimistic about the prospects of the Byelorussian Railway.
By Viktor Stepanov
[~DETAIL_TEXT] => Transit Growth Is Stable
– Mr. Laptinsky, what routes do you consider most important for freight transportation from the standpoint of the Byelorussian railway development?
– The most important one has always been and will be Russia to the Baltic States. There are the ports of Ventspils, Klaipeda, Kaliningrad, and most cargo is carried to them. It seems to me that transit transportation on the route will grow steadily, because Russia will always strive to support its western region – the Kaliningrad oblast. As for Klaipeda and Ventspils, oil products and solid bulk are carried via these ports. These cargoes will hardly be re-routed anywhere in the near future. Moreover, their volume continues to grow simultaneously with the development of the CIS’s and the Baltic states’ economies. Unfortunately, the wagons returning from the ports to Russia are usually empty. Although, a small amount of cargo is still carried on the route.
– What are the trends for this type of transportation?
– Nowadays we observe a steady growth of transit transportation, which is obvious if you look at the results of the seven months of 2007. During that period, the throughput of the Byelorussian Railway increased by 10.5% year-on-year. Transit made 70% of the transported volume. Transit transportation is profitable. Moreover, it enables us to partly compensate for the unprofitable suburban transportation, domestic passenger as well as domestic freight transportation. The latter is not profitable, and only 82% of money spent on them is recouped by the revenue.
– Is it planned to construct an additional line Zaolsha – Bigosovo to carry Russian transit to Latvia?
– At the moment we will not develop this line, because some oil products we transport have been re-routed to Latvia via Lithuania via the Benyakoni border crossing. On the line Zaolsha – Bigosovo the situation is normal now, and no additional measures are required to improve transportation there.
– From time to time, it was suggested that a Byelorussian port be constructed on the Baltic Sea, in particular in Kaliningrad or in the Leningrad region (Russia). What is the attitude of Byelorussian railwaymen to such suggestions?
– Becoming owners of a part of any Baltic ports seems unreasonable to us. Nowadays we can make use of the competition between the ports, getting discounts and choosing the most profitable terms. If there is a terminal owned by Byelorussia in any Baltic port, we will have to direct as much cargo as we can in order to load it. Thus, we will not be able to create competitive conditions for a consignor. It is not profitable for us.
– What are your relations with colleagues from other states like?
– We have no disagreements with them. We participate in a number of joint projects. Recently, we launched a logistical enterprise in cooperation with German, Russian and Polish colleagues. Its aim is to attract additional cargoes to the railway of the 2nd and part of the 9th international transport corridors. We work actively in the frames of the Eurasian Economic Community (EurAsEC) to attract additional freight to Byelorussian railway. An office for our railway was opened in Kazakhstan recently. It works actively to attract cargo from China, Mongolia and Kazakhstan to transport it as transit via the Byelorussian territory to the Baltic ports. Negotiating with Polish railwaymen recently, we discussed the issues of coal reloading at the border. The problem is that they do not always give their gondola cars to us so that we could reload coal on Byelorussian territory. Their effort to fulfill more operations is quite clear, meanwhile the wagons are idle. 400-500 wagons used to accumulate on our territory. Besides, passenger trains from Poland are often behind schedule, especially the № 22s and № 12s. We asked the Polish colleagues to solve the problem, because it is very difficult to make them run on schedule and give them to the Moscow Railway, which in turn also has problems in receiving these trains on overloaded Moscow railway stations. Besides, the Polish Railway is being reorganized, and sometimes it is impossible to find the person in charge for this or that activity. So, we asked our Polish colleagues to tell us who were the people in charge so we could solve arising problems fast.
– What do you think about the plans for a railway terminal on Polish territory (in Sławkуw) that has already been named “a dry port in the centre of Europe”? What does it mean for the Byelorussian Railway?
- Now these are just plans. When the work begins, we will see what will come of it.
Automatic Change of Bogies: a Small Revolution
– Is implementation of the automatic gauge-width change system SUW2000 a realistic prospect?
– Putting this system into operation will require new rolling stock, and this means that the whole technology of wagon production must be changed. Now we are discussing the possible implementation of the system in the Brest junction. Perhaps, the system will be put into operation, but no decision has been made yet.
– OAO RZD is a strategic partner for the Byelorussian Railway. What are the prospects for further cooperation with Russian colleagues in your opinion?
– First of all, all the documentation we use in our work is developed in Russian scientific institutions. These are documents on train traffic safety, labour protection as well as technical content of the main equipment and facilities. The passenger and freight wagons, locomotives and new types of hauling facilities we need are produced in Russia. For example, now a new Russian electric locomotive is tested on the Byelorussian Railway. It pulls trains № 7/8 and № 9/10 on the Moscow – Brest line. On some sections of the Byelorussian electrified railway direct current is used, at others the alternative current. The specific feature of the new Russian locomotive, 2EP10 by name, is that it can operate using both current and alternative current, thus its use is more efficient. In future we also count on Russian wagon and locomotive suppliers, especially taking into account the difficulties we are already facing in hauling services for train traffic and the amount of wagons. But we do not sit twiddling our thumbs. In recent years, we have launched the production of freight gondola cars, tank wagons and wagons for mineral fertilizer transportation at Mogilevwagon enterprise in Mogilev. Besides, at the wagon repair plants in Minsk and Gomel we are trying to organize passenger wagon manufacture. In May, the Minsk wagon repair plant presented the first two passenger wagons it produced. Russia helped to construct the wagons: they have Russian bodies, and specialists at the Tverskoy plant participated in their assembly at the initial stage. We also plan to produce components in Byelorussia. Taking into account that the Byelorussian rolling stock park is worn, and the deterioration of wagons and locomotives amounts to 79%, we will purchase new locomotives and wagons. As for the latter, we will also produce them.
– What are the principles used by the Byelorussian Railway when it interacts with forwarding companies? Are there any preferences for some of them?
– Nowadays, we cooperate with more than a hundred forwarding companies, and only half of them are Byelorussian residents. I believe that any limiting of cooperation does not hold good prospects. The services market must be free, so we have equal conditions for all the forwarding companies. For example, the Byelorussian Railway used to allow resident companies to make only 50% prepayment, while non-resident ones were to pay the whole sum. Since Q1 of 2006 we have a single approach: all forwarders operate on the terms of 100% prepayment and with a permanent code.
– Is the work of the Byelorussian Railway profitable nowadays?
– This year the profitability of the railway is high enough, and we plan that in 2007 the economic efficiency will exceed 18%. As I have already said, domestic transportation – both passenger and freight– is still detrimental. Now we are asking the Ministry of Economy to make tariffs on cargo transportation profitable by the beginning of 2008. Until now, the Economy Ministry has increased domestic tariffs pro rata of inflation – by about 0.7% a month. If the tariffs are increased by at least 3.5%, then by the end of the year domestic freight transportation, 82% of which is paid back, will be loss-free.
– Have ways of optimising suburban transportation as, for example, rail buses been discussed?
– We believe it unreasonable to use them. The Minsk-Passazhirsky railway station sometimes, especially in summer, can hardly service even usual trains and electric suburban trains. If there are rail buses, traffic could be paralyzed. The same thing goes for the suggestion to construct double-deck wagons. It is possible to build them, but where will they be used? To use such wagons we will have to rebuild the contact system, bridges and overpasses. We think out task is to create more convenient conditions for passengers by purchasing new modern electric and diesel trains. Now we work actively to improve passenger servicing in suburban trains. To do it, a litter bin is established in every wagon of suburban trains. The Byelorussian Railway also equips suburban trains with dry closets, so that passengers may use them in winter. At the moment, toilets just freeze in winter months. We have no means to realise fantastic projects. We have to be realists. We strive to do what will really improve conditions for consumers of all types of transportation.
– What will change when the Centre of Transportation Management (CTM) is put into operation?
– The launched CTM will enable us to manage train traffic and the locomotive park more efficiently. The management will be more technological. The CTM will provide an opportunity to improve the control of wagon flows. As a result, there will be definite economic benefits for the railways, because the turnover per freight wagon will increase, the output per locomotive will grow, the average daily haulage of a locomotive and the train weight will also increase. Now all this is very important for us. The CTM is not an innovation in the railway sector. CTMs have been operating for a long time on Russian railways, and their efficiency has been proved.
“No” to Privatization
– What are the prospects of reforming the Byelorussian Railway as has been done in Kazakhstan and Russia? Has the issue of railway privatisation ever been discussed?
– The issue of privatization has never been discussed. The Byelorussian Railway will remain a state enterprise. As for reforms, to enter the legislative field of the Republic of Belarus, the structure of the Byelorussian Railway is being reformed now to reduce the amount of juridical persons in it. Considering the experience of Russia, we are going to turn the six divisions of the railway into affiliates of the Byelorussian Railway organization. Thus, we will be able to control fund movement and the basic assets, to make the tax payment system more transparent. These plans are now being developed.
– Could you comment on the state of the Byelorussian Railway’s equipment, in particular from the standpoint of the existing plans to open high-speed travel?
– On the line Brest – Minsk – Orsha we are actively improving the railway equipment. This year the speed of passenger trains is to increase to 160 km/h. We have no other problems. The planned railway track repairs are being made. New rails and crossties are purchased and replace the old ones. Wood crossties are widely used. However, on the main lines, where we must provide high speed and good capacity, only reinforced concrete crossties are used.
– Is container and contrailer transportation applied at the Byelorussian Railway? As far as I know, special research into contrailer transportation was held.
– Yes, it was. But its results showed that contrailer transportation is not profitable for the railway. Meanwhile, container transportation had good prospects, and we develop them actively. On the basis of Berliintertrans company (which used to specialise in cargo forwarding only), incorporated into the Byelorussian Railway, it is planned to launch a company that will also transport containerised goods. All the containers and fitting platforms available at the Byelorussian Railway are given to the company’s basic assets. Besides, a joint venture was launched in cooperation with a Russian company Roscontainer in Brest. It also specializes in container transportation. There are regular block trains, such as “Eastern Wind”, “Mercury” and “Viking”. The future is with container transportation. That is why we started to produce containers in the Osipovichskoye wagon depot. Now it produces 20-ton containers, and is to start production of 40 TEU containers. In future we will manufacture refcontainers, the demand for which is very high.
– What is your forecast for the Byelorussian Railway’s future?
– We are a cargo carrier. That means that we depend on consignors and on the economy development. Nowadays the economy of the main freight-producing regions, in particular Russia, is developing rather fast. The Byelorussian economy is also developing rapidly. These processes positively influence the work of the railway. Today, exports exceed imports. In 7 months of 2007, export grew by 4% year-on-year, and import fell by 3%. These trends make me optimistic about the prospects of the Byelorussian Railway.
By Viktor Stepanov
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Kazakhstan and Turkmenistan concluded an agreement on a Caspian railway construction. It will be built along the shore of the Caspian Sea and connect the railway networks of the two states. The new railway, aimed at transportation of chemicals and oil products, may become an alternative route to the Moscow link in the frames of the corridor North-South.Array
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[DETAIL_TEXT] => Missing Link in the Chain
The new railway will pass the territories of Kazakhstan and Turkmenistan becoming the link to connect the two national railway networks. Two versions of the new railway were offered for consideration: Eralievo – Turkmenbashi and Uzen – Kazanjick. The length of Eralievo – Turkmenbashi line is 443 km, including 190 km on the Kazakh territory and 253 km in Turkmenistan. The second version envisages the construction of a 560 km long line Uzen – Kazanjick, including 140 km and 420 km on the Kazakh and Turkmen territories respectively.
When choosing the final version of the route, a number of parameters are taken into consideration. The most important of them are the cost of construction, surface relief, and exploitation conditions. Developing the technical and economic assessment of the construction, specialists analyze the forecasted transportation volumes for the long-term prospect.
The final decision has not been announced yet. However, according to the information of the Railway Committee of the Kazakh Ministry of Transport and Communication, the possible length of the future line is about 560 km. It is the line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan, passing through Kazakhstan, Turkmenistan and Iran.
In accordance with the agreement between Kazakhstan and Turkmenistan, each party is to develop the technical and economic assessment on its own. The Kazakh party plans to carry out the project using the principles of public-private partnership. Besides, Kazakh companies, as well as foreign ones and financial institutes, may participate in the tender.
President of Kazakhstan Nursultan Nazarbayev believes that the issue of construction of a new motorway parallel to the railway line becomes quite urgent. In his words, it will strengthen the transport corridor North-South that will run from Russia to Iran and the Persian Gulf.
A Rival to Russian Port of Olya?
The modern stage of the Caspian region transport potential development started after the collapse of the USSR, opening of the regional markets and incorporation of the new independent states, former Republics, into the international trade. In 1994, during the 2nd international European Transport Conference, basic routes for transport corridors and their branches were defined. In the Caspian region the basic corridor is North-South, the route for which is port Mumbai (India) – ports Bender Abbas - Bender-Amirabad - Anzeli (Iran) – port Olya (Russia) – St. Petersburg (Russia). The relative agreement was concluded in 2000. Later the agreement was signed by Byelorussia, Kazakhstan, Tajikistan, Sultanate of Oman, Armenia, Azerbaijan and Syria. Experts believe that there are a number of factors preventing development of the North-South transport corridor. Thus, the administration of the Astrakhan region believe that the transit is not carried via the Caspian region because there is no clear cut strategy of the corridor development; there are no officials personally in charge of the project; finally, the RF Ministry of Transport worries much more about the reduction of the transit volume along the TransSiberian Railway than the North-South. The main junction of the corridor – the port of Olya at the Caspian Sea – has not reached the project capacity in spite of significant investments. However, by 2010 the throughput of Olya is to amount to 4 mln tons, and to 26 mln tons by 2015-2020 when the construction of the second freight zone is completed.
In the opinion of economic experts of Iran Republic, the functioning of the sea routes on the Caspian Sea is restrained by complicated customs procedures. Nowadays, in Iran some sectors of the railway are being constructed, Iranian customs check-points are being equipped and computerized, new customs legislation and simplified customs procedures are being developed. Iranian specialists believe that it is an additional contribution to the revival of this transport route.
Some Russian analysts, for example, from research InfraNews agency, believe that the North-South corridor exists only in documents and in the officials’ imagination – neither transport companies, nor cargo owners need it, and its modest progress proves it.
Ro-ro and Containers – by Sea, Oil – by Rail
Analysis seems to prove that the railway under discussion may become a competitor to sea transportation along the Caspian Sea. However, the variant in which the two routes complement each other seems to be more realistic.
In spite of the skepticism about the future corridor North-South, by 2010 the volume of cargo transported along the route may amount to 15 mln tons, according to the forecasts. And the ports of the Caspian region used in transit transportation can fail to cope with such loading. In this situation, cargoes may leave for alternative routes.
It is worth taking into account that the port of Olya and the projected Caspian railway are destined for servicing different cargoes. Nowadays, one of the most important freights in the port of Olya is refcargoes. From this viewpoint, the port of Olya has a significant advantage. Firstly, the speed of transportation is especially important for perishables. If it is transported by railway, the cargo will cross two borders. Secondly, for proper transportation in special wagons by railway, a certain infrastructure is required, for example, special repair depots, where some damages of a container could be repaired. The handling capacities of the Olya port specialize in ro-ro, pipes, containers and LNG.
The new railway line is constructed for chemicals, grain and passenger transportation. Oil products remain a strategic cargo – one of the project’s priorities is oil deliveries to Iran.
Meanwhile, ecology experts worry about oil transportation in the Caspian Sea. In the opinion of an expert of Azerbaijan oil and gas sector Chingiz Veliev, the safety of oil transportation in the Caspian sea cannot be guaranteed by 100%, because no Caspian state has modern vessels to liquidate the consequences of large ecological emergencies with oil blowout into the sea.
“The urge of the other states, for example Kazakhstan, to find the most profitable route for their freight transportation is quite understandable. We do not treat this as threatening news. We have our own flows, and we count on them. They start in Asia and end in Europe. If goods turnover progresses between Kazakhstan and Turkmenistan, a part of it will be re-oriented to the future railway”, says Alexey Sinelschikov, Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region.
Considering the international experience of freight transportation, water transport remains the most environment-friendly and the least resource-intensive. “We understand the wish of other states to launch transport projects, but, at the same time, we are quite assured about our position, because our agreements are much wider than those of Kazakhstan and Turkmenistan. Nowadays, the international transport corridor North-South is supported by more than 10 countries”, highlights the expert.
By Anna Nezhinskaya
viewpoint
Alexey Sinelschikov,
Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region:
– It is necessary to understand that transport, as well as economic systems, develops. Such projects will always appear and be carried out. It should be taken into consideration that cargo flows also grow and it is for them the new transport project is carried out. And the corridor “North-South” was created for the freight flow between Europe and Asia.
The majority of cargoes is carried in the frames of Russian-Iranian trade. These are export supplies of metal, timber and fertilizers, i.e. freights that are now actively imported into Iran. At the same time, the flow of containers and high-tech equipment from Europe to our region increases annually. I cannot even think of any European country that does not transport cargoes – they are carried from England and Belgium and from practically all European states. Naturally, according to volumes we fall behind the routes via the Suez Canal. However, the dynamics of the growth, including the one via the new Olya port, which is now under construction, proved that the direction is prospective even to those who did not consider the project reasonable and offered alternative routes for freight transportation via our territory between Asia and Europe.
The peculiarity of Astrakhan and the ports of the Astrakhan region is that 96% of the cargo flow is carried by railway and water transport. And the role of the railway transport is very significant. In 2003, a railway branch with the capacity of 1 mln tons was built to the port of Olya. According to forecasts, it will be loaded by 80% in 2007.
Thus, the dynamics is very good. I can say that the three berths existing in the Olya port started to work efficiently in 2005, when the cargo flow grew twofold.176 thousand tons was handled in 2005, and 300 thousand tons in 2006. This year we forecast volumes of about 700 thousand tons. The dynamics is very good, and as for the freight flows, we are quite sure about them. As soon as we created the necessary conditions, cargo appeared.
We service not only cargo flows carried to and from Kazakhstan. Turkmenistan exports vegetables and fruits – these are perishables, and it is unprofitable to carry them along the shore by road and railway transport. Speaking of ferry transportation, it takes only two days to carry the freight by sea, and then cargo is transported further in Russia.
Marat Urazbekov,
Chairman of the Railways Committee, Ministry of Transport and Communication of the Republic of Kazakhstan:
– The international transport corridor North-South lies along the routes connecting Russia, China, Europe and the Persian Gulf states. On the territory of Kazakhstan, the international transport corridor “North-South” lies mainly on the routes crossing the port of Aktau.
Nowadays, the corridor “North-South” is a mixed route, which causes additional expenses on technological processes and increases the delivery time.
The construction of the railway line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan will enable to attract additional volumes of transit transportation on the territory of the Republic of Kazakhstan, and will play an important role for the increase of the mutually beneficial trade and economic cooperation.
[~DETAIL_TEXT] => Missing Link in the Chain
The new railway will pass the territories of Kazakhstan and Turkmenistan becoming the link to connect the two national railway networks. Two versions of the new railway were offered for consideration: Eralievo – Turkmenbashi and Uzen – Kazanjick. The length of Eralievo – Turkmenbashi line is 443 km, including 190 km on the Kazakh territory and 253 km in Turkmenistan. The second version envisages the construction of a 560 km long line Uzen – Kazanjick, including 140 km and 420 km on the Kazakh and Turkmen territories respectively.
When choosing the final version of the route, a number of parameters are taken into consideration. The most important of them are the cost of construction, surface relief, and exploitation conditions. Developing the technical and economic assessment of the construction, specialists analyze the forecasted transportation volumes for the long-term prospect.
The final decision has not been announced yet. However, according to the information of the Railway Committee of the Kazakh Ministry of Transport and Communication, the possible length of the future line is about 560 km. It is the line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan, passing through Kazakhstan, Turkmenistan and Iran.
In accordance with the agreement between Kazakhstan and Turkmenistan, each party is to develop the technical and economic assessment on its own. The Kazakh party plans to carry out the project using the principles of public-private partnership. Besides, Kazakh companies, as well as foreign ones and financial institutes, may participate in the tender.
President of Kazakhstan Nursultan Nazarbayev believes that the issue of construction of a new motorway parallel to the railway line becomes quite urgent. In his words, it will strengthen the transport corridor North-South that will run from Russia to Iran and the Persian Gulf.
A Rival to Russian Port of Olya?
The modern stage of the Caspian region transport potential development started after the collapse of the USSR, opening of the regional markets and incorporation of the new independent states, former Republics, into the international trade. In 1994, during the 2nd international European Transport Conference, basic routes for transport corridors and their branches were defined. In the Caspian region the basic corridor is North-South, the route for which is port Mumbai (India) – ports Bender Abbas - Bender-Amirabad - Anzeli (Iran) – port Olya (Russia) – St. Petersburg (Russia). The relative agreement was concluded in 2000. Later the agreement was signed by Byelorussia, Kazakhstan, Tajikistan, Sultanate of Oman, Armenia, Azerbaijan and Syria. Experts believe that there are a number of factors preventing development of the North-South transport corridor. Thus, the administration of the Astrakhan region believe that the transit is not carried via the Caspian region because there is no clear cut strategy of the corridor development; there are no officials personally in charge of the project; finally, the RF Ministry of Transport worries much more about the reduction of the transit volume along the TransSiberian Railway than the North-South. The main junction of the corridor – the port of Olya at the Caspian Sea – has not reached the project capacity in spite of significant investments. However, by 2010 the throughput of Olya is to amount to 4 mln tons, and to 26 mln tons by 2015-2020 when the construction of the second freight zone is completed.
In the opinion of economic experts of Iran Republic, the functioning of the sea routes on the Caspian Sea is restrained by complicated customs procedures. Nowadays, in Iran some sectors of the railway are being constructed, Iranian customs check-points are being equipped and computerized, new customs legislation and simplified customs procedures are being developed. Iranian specialists believe that it is an additional contribution to the revival of this transport route.
Some Russian analysts, for example, from research InfraNews agency, believe that the North-South corridor exists only in documents and in the officials’ imagination – neither transport companies, nor cargo owners need it, and its modest progress proves it.
Ro-ro and Containers – by Sea, Oil – by Rail
Analysis seems to prove that the railway under discussion may become a competitor to sea transportation along the Caspian Sea. However, the variant in which the two routes complement each other seems to be more realistic.
In spite of the skepticism about the future corridor North-South, by 2010 the volume of cargo transported along the route may amount to 15 mln tons, according to the forecasts. And the ports of the Caspian region used in transit transportation can fail to cope with such loading. In this situation, cargoes may leave for alternative routes.
It is worth taking into account that the port of Olya and the projected Caspian railway are destined for servicing different cargoes. Nowadays, one of the most important freights in the port of Olya is refcargoes. From this viewpoint, the port of Olya has a significant advantage. Firstly, the speed of transportation is especially important for perishables. If it is transported by railway, the cargo will cross two borders. Secondly, for proper transportation in special wagons by railway, a certain infrastructure is required, for example, special repair depots, where some damages of a container could be repaired. The handling capacities of the Olya port specialize in ro-ro, pipes, containers and LNG.
The new railway line is constructed for chemicals, grain and passenger transportation. Oil products remain a strategic cargo – one of the project’s priorities is oil deliveries to Iran.
Meanwhile, ecology experts worry about oil transportation in the Caspian Sea. In the opinion of an expert of Azerbaijan oil and gas sector Chingiz Veliev, the safety of oil transportation in the Caspian sea cannot be guaranteed by 100%, because no Caspian state has modern vessels to liquidate the consequences of large ecological emergencies with oil blowout into the sea.
“The urge of the other states, for example Kazakhstan, to find the most profitable route for their freight transportation is quite understandable. We do not treat this as threatening news. We have our own flows, and we count on them. They start in Asia and end in Europe. If goods turnover progresses between Kazakhstan and Turkmenistan, a part of it will be re-oriented to the future railway”, says Alexey Sinelschikov, Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region.
Considering the international experience of freight transportation, water transport remains the most environment-friendly and the least resource-intensive. “We understand the wish of other states to launch transport projects, but, at the same time, we are quite assured about our position, because our agreements are much wider than those of Kazakhstan and Turkmenistan. Nowadays, the international transport corridor North-South is supported by more than 10 countries”, highlights the expert.
By Anna Nezhinskaya
viewpoint
Alexey Sinelschikov,
Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region:
– It is necessary to understand that transport, as well as economic systems, develops. Such projects will always appear and be carried out. It should be taken into consideration that cargo flows also grow and it is for them the new transport project is carried out. And the corridor “North-South” was created for the freight flow between Europe and Asia.
The majority of cargoes is carried in the frames of Russian-Iranian trade. These are export supplies of metal, timber and fertilizers, i.e. freights that are now actively imported into Iran. At the same time, the flow of containers and high-tech equipment from Europe to our region increases annually. I cannot even think of any European country that does not transport cargoes – they are carried from England and Belgium and from practically all European states. Naturally, according to volumes we fall behind the routes via the Suez Canal. However, the dynamics of the growth, including the one via the new Olya port, which is now under construction, proved that the direction is prospective even to those who did not consider the project reasonable and offered alternative routes for freight transportation via our territory between Asia and Europe.
The peculiarity of Astrakhan and the ports of the Astrakhan region is that 96% of the cargo flow is carried by railway and water transport. And the role of the railway transport is very significant. In 2003, a railway branch with the capacity of 1 mln tons was built to the port of Olya. According to forecasts, it will be loaded by 80% in 2007.
Thus, the dynamics is very good. I can say that the three berths existing in the Olya port started to work efficiently in 2005, when the cargo flow grew twofold.176 thousand tons was handled in 2005, and 300 thousand tons in 2006. This year we forecast volumes of about 700 thousand tons. The dynamics is very good, and as for the freight flows, we are quite sure about them. As soon as we created the necessary conditions, cargo appeared.
We service not only cargo flows carried to and from Kazakhstan. Turkmenistan exports vegetables and fruits – these are perishables, and it is unprofitable to carry them along the shore by road and railway transport. Speaking of ferry transportation, it takes only two days to carry the freight by sea, and then cargo is transported further in Russia.
Marat Urazbekov,
Chairman of the Railways Committee, Ministry of Transport and Communication of the Republic of Kazakhstan:
– The international transport corridor North-South lies along the routes connecting Russia, China, Europe and the Persian Gulf states. On the territory of Kazakhstan, the international transport corridor “North-South” lies mainly on the routes crossing the port of Aktau.
Nowadays, the corridor “North-South” is a mixed route, which causes additional expenses on technological processes and increases the delivery time.
The construction of the railway line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan will enable to attract additional volumes of transit transportation on the territory of the Republic of Kazakhstan, and will play an important role for the increase of the mutually beneficial trade and economic cooperation.
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[SECTION_META_TITLE] => New Railway to Enhance Caspian Transit Chances
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/009.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />Kazakhstan and Turkmenistan concluded an agreement on a Caspian railway construction. It will be built along the shore of the Caspian Sea and connect the railway networks of the two states. The new railway, aimed at transportation of chemicals and oil products, may become an alternative route to the Moscow link in the frames of the corridor North-South.<br />It may also make the corridor popular for cargo owners.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/009.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />Kazakhstan and Turkmenistan concluded an agreement on a Caspian railway construction. It will be built along the shore of the Caspian Sea and connect the railway networks of the two states. The new railway, aimed at transportation of chemicals and oil products, may become an alternative route to the Moscow link in the frames of the corridor North-South.<br />It may also make the corridor popular for cargo owners.
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[DETAIL_TEXT] => Missing Link in the Chain
The new railway will pass the territories of Kazakhstan and Turkmenistan becoming the link to connect the two national railway networks. Two versions of the new railway were offered for consideration: Eralievo – Turkmenbashi and Uzen – Kazanjick. The length of Eralievo – Turkmenbashi line is 443 km, including 190 km on the Kazakh territory and 253 km in Turkmenistan. The second version envisages the construction of a 560 km long line Uzen – Kazanjick, including 140 km and 420 km on the Kazakh and Turkmen territories respectively.
When choosing the final version of the route, a number of parameters are taken into consideration. The most important of them are the cost of construction, surface relief, and exploitation conditions. Developing the technical and economic assessment of the construction, specialists analyze the forecasted transportation volumes for the long-term prospect.
The final decision has not been announced yet. However, according to the information of the Railway Committee of the Kazakh Ministry of Transport and Communication, the possible length of the future line is about 560 km. It is the line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan, passing through Kazakhstan, Turkmenistan and Iran.
In accordance with the agreement between Kazakhstan and Turkmenistan, each party is to develop the technical and economic assessment on its own. The Kazakh party plans to carry out the project using the principles of public-private partnership. Besides, Kazakh companies, as well as foreign ones and financial institutes, may participate in the tender.
President of Kazakhstan Nursultan Nazarbayev believes that the issue of construction of a new motorway parallel to the railway line becomes quite urgent. In his words, it will strengthen the transport corridor North-South that will run from Russia to Iran and the Persian Gulf.
A Rival to Russian Port of Olya?
The modern stage of the Caspian region transport potential development started after the collapse of the USSR, opening of the regional markets and incorporation of the new independent states, former Republics, into the international trade. In 1994, during the 2nd international European Transport Conference, basic routes for transport corridors and their branches were defined. In the Caspian region the basic corridor is North-South, the route for which is port Mumbai (India) – ports Bender Abbas - Bender-Amirabad - Anzeli (Iran) – port Olya (Russia) – St. Petersburg (Russia). The relative agreement was concluded in 2000. Later the agreement was signed by Byelorussia, Kazakhstan, Tajikistan, Sultanate of Oman, Armenia, Azerbaijan and Syria. Experts believe that there are a number of factors preventing development of the North-South transport corridor. Thus, the administration of the Astrakhan region believe that the transit is not carried via the Caspian region because there is no clear cut strategy of the corridor development; there are no officials personally in charge of the project; finally, the RF Ministry of Transport worries much more about the reduction of the transit volume along the TransSiberian Railway than the North-South. The main junction of the corridor – the port of Olya at the Caspian Sea – has not reached the project capacity in spite of significant investments. However, by 2010 the throughput of Olya is to amount to 4 mln tons, and to 26 mln tons by 2015-2020 when the construction of the second freight zone is completed.
In the opinion of economic experts of Iran Republic, the functioning of the sea routes on the Caspian Sea is restrained by complicated customs procedures. Nowadays, in Iran some sectors of the railway are being constructed, Iranian customs check-points are being equipped and computerized, new customs legislation and simplified customs procedures are being developed. Iranian specialists believe that it is an additional contribution to the revival of this transport route.
Some Russian analysts, for example, from research InfraNews agency, believe that the North-South corridor exists only in documents and in the officials’ imagination – neither transport companies, nor cargo owners need it, and its modest progress proves it.
Ro-ro and Containers – by Sea, Oil – by Rail
Analysis seems to prove that the railway under discussion may become a competitor to sea transportation along the Caspian Sea. However, the variant in which the two routes complement each other seems to be more realistic.
In spite of the skepticism about the future corridor North-South, by 2010 the volume of cargo transported along the route may amount to 15 mln tons, according to the forecasts. And the ports of the Caspian region used in transit transportation can fail to cope with such loading. In this situation, cargoes may leave for alternative routes.
It is worth taking into account that the port of Olya and the projected Caspian railway are destined for servicing different cargoes. Nowadays, one of the most important freights in the port of Olya is refcargoes. From this viewpoint, the port of Olya has a significant advantage. Firstly, the speed of transportation is especially important for perishables. If it is transported by railway, the cargo will cross two borders. Secondly, for proper transportation in special wagons by railway, a certain infrastructure is required, for example, special repair depots, where some damages of a container could be repaired. The handling capacities of the Olya port specialize in ro-ro, pipes, containers and LNG.
The new railway line is constructed for chemicals, grain and passenger transportation. Oil products remain a strategic cargo – one of the project’s priorities is oil deliveries to Iran.
Meanwhile, ecology experts worry about oil transportation in the Caspian Sea. In the opinion of an expert of Azerbaijan oil and gas sector Chingiz Veliev, the safety of oil transportation in the Caspian sea cannot be guaranteed by 100%, because no Caspian state has modern vessels to liquidate the consequences of large ecological emergencies with oil blowout into the sea.
“The urge of the other states, for example Kazakhstan, to find the most profitable route for their freight transportation is quite understandable. We do not treat this as threatening news. We have our own flows, and we count on them. They start in Asia and end in Europe. If goods turnover progresses between Kazakhstan and Turkmenistan, a part of it will be re-oriented to the future railway”, says Alexey Sinelschikov, Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region.
Considering the international experience of freight transportation, water transport remains the most environment-friendly and the least resource-intensive. “We understand the wish of other states to launch transport projects, but, at the same time, we are quite assured about our position, because our agreements are much wider than those of Kazakhstan and Turkmenistan. Nowadays, the international transport corridor North-South is supported by more than 10 countries”, highlights the expert.
By Anna Nezhinskaya
viewpoint
Alexey Sinelschikov,
Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region:
– It is necessary to understand that transport, as well as economic systems, develops. Such projects will always appear and be carried out. It should be taken into consideration that cargo flows also grow and it is for them the new transport project is carried out. And the corridor “North-South” was created for the freight flow between Europe and Asia.
The majority of cargoes is carried in the frames of Russian-Iranian trade. These are export supplies of metal, timber and fertilizers, i.e. freights that are now actively imported into Iran. At the same time, the flow of containers and high-tech equipment from Europe to our region increases annually. I cannot even think of any European country that does not transport cargoes – they are carried from England and Belgium and from practically all European states. Naturally, according to volumes we fall behind the routes via the Suez Canal. However, the dynamics of the growth, including the one via the new Olya port, which is now under construction, proved that the direction is prospective even to those who did not consider the project reasonable and offered alternative routes for freight transportation via our territory between Asia and Europe.
The peculiarity of Astrakhan and the ports of the Astrakhan region is that 96% of the cargo flow is carried by railway and water transport. And the role of the railway transport is very significant. In 2003, a railway branch with the capacity of 1 mln tons was built to the port of Olya. According to forecasts, it will be loaded by 80% in 2007.
Thus, the dynamics is very good. I can say that the three berths existing in the Olya port started to work efficiently in 2005, when the cargo flow grew twofold.176 thousand tons was handled in 2005, and 300 thousand tons in 2006. This year we forecast volumes of about 700 thousand tons. The dynamics is very good, and as for the freight flows, we are quite sure about them. As soon as we created the necessary conditions, cargo appeared.
We service not only cargo flows carried to and from Kazakhstan. Turkmenistan exports vegetables and fruits – these are perishables, and it is unprofitable to carry them along the shore by road and railway transport. Speaking of ferry transportation, it takes only two days to carry the freight by sea, and then cargo is transported further in Russia.
Marat Urazbekov,
Chairman of the Railways Committee, Ministry of Transport and Communication of the Republic of Kazakhstan:
– The international transport corridor North-South lies along the routes connecting Russia, China, Europe and the Persian Gulf states. On the territory of Kazakhstan, the international transport corridor “North-South” lies mainly on the routes crossing the port of Aktau.
Nowadays, the corridor “North-South” is a mixed route, which causes additional expenses on technological processes and increases the delivery time.
The construction of the railway line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan will enable to attract additional volumes of transit transportation on the territory of the Republic of Kazakhstan, and will play an important role for the increase of the mutually beneficial trade and economic cooperation.
[~DETAIL_TEXT] => Missing Link in the Chain
The new railway will pass the territories of Kazakhstan and Turkmenistan becoming the link to connect the two national railway networks. Two versions of the new railway were offered for consideration: Eralievo – Turkmenbashi and Uzen – Kazanjick. The length of Eralievo – Turkmenbashi line is 443 km, including 190 km on the Kazakh territory and 253 km in Turkmenistan. The second version envisages the construction of a 560 km long line Uzen – Kazanjick, including 140 km and 420 km on the Kazakh and Turkmen territories respectively.
When choosing the final version of the route, a number of parameters are taken into consideration. The most important of them are the cost of construction, surface relief, and exploitation conditions. Developing the technical and economic assessment of the construction, specialists analyze the forecasted transportation volumes for the long-term prospect.
The final decision has not been announced yet. However, according to the information of the Railway Committee of the Kazakh Ministry of Transport and Communication, the possible length of the future line is about 560 km. It is the line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan, passing through Kazakhstan, Turkmenistan and Iran.
In accordance with the agreement between Kazakhstan and Turkmenistan, each party is to develop the technical and economic assessment on its own. The Kazakh party plans to carry out the project using the principles of public-private partnership. Besides, Kazakh companies, as well as foreign ones and financial institutes, may participate in the tender.
President of Kazakhstan Nursultan Nazarbayev believes that the issue of construction of a new motorway parallel to the railway line becomes quite urgent. In his words, it will strengthen the transport corridor North-South that will run from Russia to Iran and the Persian Gulf.
A Rival to Russian Port of Olya?
The modern stage of the Caspian region transport potential development started after the collapse of the USSR, opening of the regional markets and incorporation of the new independent states, former Republics, into the international trade. In 1994, during the 2nd international European Transport Conference, basic routes for transport corridors and their branches were defined. In the Caspian region the basic corridor is North-South, the route for which is port Mumbai (India) – ports Bender Abbas - Bender-Amirabad - Anzeli (Iran) – port Olya (Russia) – St. Petersburg (Russia). The relative agreement was concluded in 2000. Later the agreement was signed by Byelorussia, Kazakhstan, Tajikistan, Sultanate of Oman, Armenia, Azerbaijan and Syria. Experts believe that there are a number of factors preventing development of the North-South transport corridor. Thus, the administration of the Astrakhan region believe that the transit is not carried via the Caspian region because there is no clear cut strategy of the corridor development; there are no officials personally in charge of the project; finally, the RF Ministry of Transport worries much more about the reduction of the transit volume along the TransSiberian Railway than the North-South. The main junction of the corridor – the port of Olya at the Caspian Sea – has not reached the project capacity in spite of significant investments. However, by 2010 the throughput of Olya is to amount to 4 mln tons, and to 26 mln tons by 2015-2020 when the construction of the second freight zone is completed.
In the opinion of economic experts of Iran Republic, the functioning of the sea routes on the Caspian Sea is restrained by complicated customs procedures. Nowadays, in Iran some sectors of the railway are being constructed, Iranian customs check-points are being equipped and computerized, new customs legislation and simplified customs procedures are being developed. Iranian specialists believe that it is an additional contribution to the revival of this transport route.
Some Russian analysts, for example, from research InfraNews agency, believe that the North-South corridor exists only in documents and in the officials’ imagination – neither transport companies, nor cargo owners need it, and its modest progress proves it.
Ro-ro and Containers – by Sea, Oil – by Rail
Analysis seems to prove that the railway under discussion may become a competitor to sea transportation along the Caspian Sea. However, the variant in which the two routes complement each other seems to be more realistic.
In spite of the skepticism about the future corridor North-South, by 2010 the volume of cargo transported along the route may amount to 15 mln tons, according to the forecasts. And the ports of the Caspian region used in transit transportation can fail to cope with such loading. In this situation, cargoes may leave for alternative routes.
It is worth taking into account that the port of Olya and the projected Caspian railway are destined for servicing different cargoes. Nowadays, one of the most important freights in the port of Olya is refcargoes. From this viewpoint, the port of Olya has a significant advantage. Firstly, the speed of transportation is especially important for perishables. If it is transported by railway, the cargo will cross two borders. Secondly, for proper transportation in special wagons by railway, a certain infrastructure is required, for example, special repair depots, where some damages of a container could be repaired. The handling capacities of the Olya port specialize in ro-ro, pipes, containers and LNG.
The new railway line is constructed for chemicals, grain and passenger transportation. Oil products remain a strategic cargo – one of the project’s priorities is oil deliveries to Iran.
Meanwhile, ecology experts worry about oil transportation in the Caspian Sea. In the opinion of an expert of Azerbaijan oil and gas sector Chingiz Veliev, the safety of oil transportation in the Caspian sea cannot be guaranteed by 100%, because no Caspian state has modern vessels to liquidate the consequences of large ecological emergencies with oil blowout into the sea.
“The urge of the other states, for example Kazakhstan, to find the most profitable route for their freight transportation is quite understandable. We do not treat this as threatening news. We have our own flows, and we count on them. They start in Asia and end in Europe. If goods turnover progresses between Kazakhstan and Turkmenistan, a part of it will be re-oriented to the future railway”, says Alexey Sinelschikov, Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region.
Considering the international experience of freight transportation, water transport remains the most environment-friendly and the least resource-intensive. “We understand the wish of other states to launch transport projects, but, at the same time, we are quite assured about our position, because our agreements are much wider than those of Kazakhstan and Turkmenistan. Nowadays, the international transport corridor North-South is supported by more than 10 countries”, highlights the expert.
By Anna Nezhinskaya
viewpoint
Alexey Sinelschikov,
Head of Water Transport and Federal and Regional Targeted Programmes Coordination Department of the Ministry of Industry, Transport and Communication of the Astrakhan region:
– It is necessary to understand that transport, as well as economic systems, develops. Such projects will always appear and be carried out. It should be taken into consideration that cargo flows also grow and it is for them the new transport project is carried out. And the corridor “North-South” was created for the freight flow between Europe and Asia.
The majority of cargoes is carried in the frames of Russian-Iranian trade. These are export supplies of metal, timber and fertilizers, i.e. freights that are now actively imported into Iran. At the same time, the flow of containers and high-tech equipment from Europe to our region increases annually. I cannot even think of any European country that does not transport cargoes – they are carried from England and Belgium and from practically all European states. Naturally, according to volumes we fall behind the routes via the Suez Canal. However, the dynamics of the growth, including the one via the new Olya port, which is now under construction, proved that the direction is prospective even to those who did not consider the project reasonable and offered alternative routes for freight transportation via our territory between Asia and Europe.
The peculiarity of Astrakhan and the ports of the Astrakhan region is that 96% of the cargo flow is carried by railway and water transport. And the role of the railway transport is very significant. In 2003, a railway branch with the capacity of 1 mln tons was built to the port of Olya. According to forecasts, it will be loaded by 80% in 2007.
Thus, the dynamics is very good. I can say that the three berths existing in the Olya port started to work efficiently in 2005, when the cargo flow grew twofold.176 thousand tons was handled in 2005, and 300 thousand tons in 2006. This year we forecast volumes of about 700 thousand tons. The dynamics is very good, and as for the freight flows, we are quite sure about them. As soon as we created the necessary conditions, cargo appeared.
We service not only cargo flows carried to and from Kazakhstan. Turkmenistan exports vegetables and fruits – these are perishables, and it is unprofitable to carry them along the shore by road and railway transport. Speaking of ferry transportation, it takes only two days to carry the freight by sea, and then cargo is transported further in Russia.
Marat Urazbekov,
Chairman of the Railways Committee, Ministry of Transport and Communication of the Republic of Kazakhstan:
– The international transport corridor North-South lies along the routes connecting Russia, China, Europe and the Persian Gulf states. On the territory of Kazakhstan, the international transport corridor “North-South” lies mainly on the routes crossing the port of Aktau.
Nowadays, the corridor “North-South” is a mixed route, which causes additional expenses on technological processes and increases the delivery time.
The construction of the railway line Uzen – Gyzylgaya – Bereket – Etrek – Gorgan will enable to attract additional volumes of transit transportation on the territory of the Republic of Kazakhstan, and will play an important role for the increase of the mutually beneficial trade and economic cooperation.
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It may also make the corridor popular for cargo owners.
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It may also make the corridor popular for cargo owners.
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[SECTION_META_TITLE] => New Railway to Enhance Caspian Transit Chances
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/009.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />Kazakhstan and Turkmenistan concluded an agreement on a Caspian railway construction. It will be built along the shore of the Caspian Sea and connect the railway networks of the two states. The new railway, aimed at transportation of chemicals and oil products, may become an alternative route to the Moscow link in the frames of the corridor North-South.<br />It may also make the corridor popular for cargo owners.
[ELEMENT_META_TITLE] => New Railway to Enhance Caspian Transit Chances
[ELEMENT_META_KEYWORDS] => new railway to enhance caspian transit chances
[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2007/4/009.png" border="1" alt=" " hspace="5" width="110" height="140" align="left" />Kazakhstan and Turkmenistan concluded an agreement on a Caspian railway construction. It will be built along the shore of the Caspian Sea and connect the railway networks of the two states. The new railway, aimed at transportation of chemicals and oil products, may become an alternative route to the Moscow link in the frames of the corridor North-South.<br />It may also make the corridor popular for cargo owners.
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[SECTION_PICTURE_FILE_TITLE] => New Railway to Enhance Caspian Transit Chances
[SECTION_DETAIL_PICTURE_FILE_ALT] => New Railway to Enhance Caspian Transit Chances
[SECTION_DETAIL_PICTURE_FILE_TITLE] => New Railway to Enhance Caspian Transit Chances
[ELEMENT_PREVIEW_PICTURE_FILE_ALT] => New Railway to Enhance Caspian Transit Chances
[ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => New Railway to Enhance Caspian Transit Chances
[ELEMENT_DETAIL_PICTURE_FILE_ALT] => New Railway to Enhance Caspian Transit Chances
[ELEMENT_DETAIL_PICTURE_FILE_TITLE] => New Railway to Enhance Caspian Transit Chances
)
)
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