Market Benchmark

According to ERAI (Eurasian Rail Alliance Index), September saw rail shipping between Europe and Asia become 3.8 times as cheap as sea freight with overland transit times remaining 3-4 times shorter. Being able to visually track and compare transit costs comes as an additional market tool to make informed decisions on shifting from traditional sea routes to alternative rail shipping.

JSC UTLC ERA first presented the ERAI Index at the logistics and transport exhibition in China in 2018.

According to Artemiy Ivanov, head of UTLC ERA’s Marketing Research Department, ERAI serves as a tool for informing market players about Trans-Eurasian container rail shipping costs. “While similar indices exist today for sea and air routes between Europe and China, the ERAI index comes as a modern and relevant composite indicator for the rail shipping business,” the expert explained.

While creating the index, UTLC ERA considered an array of factors including among others: tariffs for rail shipments across Russia, Kazakhstan and Belarus, the cost of using fitting platforms and terminal services, travel time, the infrastructure congestion rates, etc.

One may recall that the ERAI index was updated monthly in 2019 whereas now it is calculated on a weekly basis and is available at index1520.com.

Meanwhile, according to Artemiy Ivanov, the interests of transportation market players go beyond the mere cost of transportation; today the ERAI index is a full-fledged information and analytical portal.
“The index’s portal features online statistics on cargo traffic along the entire routes of UTLC ERA – very few online resources can boast such information being openly provided to the public. The portal is a source of the latest news, analytical reports on transport and other related issues,” says Artemiy.

Among other things, the statistics of the website visits is yet another indication of the increasing interest in the ERAI index today. “Today, according to our data, the portal is visited by about 100 thousand visitors annually, with the number of users constantly growing; in September 2021 the number of visitors to the portal increased by 183% versus the same period last year,” says Artemiy Ivanov. Up to 50% of the portal’s audience are Russian users, followed by the Eurasian Economic Union, China, and European countries. The most popular sections are “Analytics”, “News” and “Statistics”.

ABC-Rail CEO Arthur Nurmukhamedov notes that the ERAI index became especially relevant to track about a year ago, at a time when rail and sea tariffs overlapped on East-West trade routes.

Since November 2020, the WCI (World Container Index) shipping index has never dropped below the Eurasian Rail Alliance Index. In late September, according to Drewry, rail shipping between Asia and Europe became 3.8 times as cheap as maritime transport.
“A dramatic rise in sea freight rates caused by supply chain failures in the wake of coronavirus restrictions and other factors radically increased the value of the WCI index, the main indicator of sea freight traffic on Asia – Europe trade routes. Rail transit, in turn, proved a reliable mode of transport and gained a new advantage in terms of cost-effectiveness”, noted head of UTLC ERA’s Marketing Research Department.

According to Denis Semyonkin, Deputy Chairman of the Association of Railway Rolling Stock Operators, the ERAI index today is a benchmark for logistics companies, freight forwarders and shippers.
“The ERAI value reflects all the cost elements associated with cargo transportation, and this is what helps a consignor to calculate the final price for transportation along different sections of a railroad route, and a forwarder to calculate the competitive cost of their services», notes Denis Semyonkin.

Oleg Degtyarev, Director General of RusTrans LLC, believes that the ERAI index helps one to determine the transport costs when signing a transportation contract. “The development of the market of railway transit container transportation across Russia, Kazakhstan and Belarus can be characterized by a rapid increase in the number of players – shippers and consignees, freight forwarding companies, all in need of constant access to up-to-date information about the market,” says the expert.

Meanwhile, today the ERAI index is of interest not only to transit shipping companies.
«We are not engaged in transit shipment but, for me, these indices are some sort of a benchmark whereby we could forecast demand for a particular type of rolling stock, namely fitting platforms», says Arthur Nurmukhamedov.