The report of the Eurasian Development Bank on increasing the importance of the railway communication on the project "One belt - one way" with Southeast Asia

16 / 04 / 18

The development of the Chinese initiative of the Economic belt of the Silk Road is materialized in the strong dynamics of transportation from China to Europe and back via the railway network of the countries of the Eurasian Economic Union (EAEC). Transit container freight from China to the EU for 2010-2017 increased from 5.6 thousand TEU (equivalent to a 20-foot container) to almost 164 thousand TEU. As a result of 2017, the total volume of container shipments through the territory of the EAEC along the China-Europe-China axis amounted to 262 thousand TEU, which is 1.8 times higher than in 2016.

According to the EDB analysis provided, the annual doubling of the number of container trains and the volume of container cargo on the routes of the PRC-EAGE-EU in 2013-2016 was largely due to the subsidization by the Chinese authorities of export rail transportation. The actual "zeroing" of the tariff for container transportation through the territory of the People's Republic of China facilitated the rapid switching of cargo flows of Chinese exporters from sea routes to rail transport.

According to the report, in 2016 the amount of subsidies from the Chinese provinces was about $ 88 million. This estimate assumes an average size of subsidies for container transportation at $ 2500 per 40-foot container and the total number of subsidized containers from the central provinces of the PRC at 35,000 40-foot containers. On average, the size of the subsidy for one 40-foot container is only 0.3-0.4% of the value of the cargo carried in the container.

The growth of recent years has been achieved at the level of a through railway tariff of $ 4800-6000 per 40-foot container (including subsidies of about 40%). The maintenance and expansion of subsidized transport by Chinese provinces is a key issue for ensuring the growth prospects of container traffic.

Rail transport has a number of non-price advantages for shippers. Advantages of "convenience" include shorter periods, regularity and targeting of delivery. "The accuracy of the railway timetable (99.7% of container trains on routes between China and Europe are exactly on schedule), targeting (door-to-door delivery) and about three times shorter delivery times compared to maritime transport provide a comprehensive advantage of rail transportation, - said the director of the EDB research center Eugene Vinokurov. - Non-price potential is not exhausted: by 2020 the number of container train departures per week can grow three-fold (about 100 per week). "


Analysts of the center believe that the current cross-cutting tariff (taking into account subsidies) on average at $ 5500 per 40-foot container provides the potential for further growth of container traffic to 500 thousand TEU in 2020, that is, twice. After that, the maintenance of the tariff at the previous level will not have such a pronounced effect, and the growth rate of container traffic will drop sharply. For further growth, a lower tariff will be required, investments in the bottleneck of the "narrow" areas of the transport and logistics infrastructure (construction of additional railways, electrification of railway sections, renovation and modernization of traction force, specialized rolling stock, construction of transport and logistics centers, infrastructure of border crossings and so on) and international coordination of transport policy at the level of "Greater Eurasia".

In a favorable scenario in the long term, the total freight traffic along the China-ENPP-EU axis could grow to 1.3 million TEU. If the existing unbalanced ratio of East-West / West-East container flows (2: 1) and when loading routes to the West-East by any container-acceptable cargo is maintained, the aggregated rail container traffic along the China-EEMP-EU axis may amount to 2 million TEU per year.

For the EAEC countries, the interface with the Chinese initiative is strategic. The main thing in this issue is the solution of internal problems of transport and logistics infrastructure, containerization of economies and unification of technical regulation. This will lead to an intensive increase in domestic interregional cargo transportation, increase the coherence of regions, improve the logistics position of the landlocked regions - the Russian Urals and Siberia, as well as the whole of Central Asia, the report says.


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