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Agricultural product corridor

A subsidiary of Russian Railways is developing a project to deliver agricultural products abroad
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"Agroexpress", a specialized service of Russian Railways Logistics, originally created to deliver Russian food products to China, is now available in the countries of Central Asia and the Caspian region. Having launched shipments of products to Chinese provinces, the company successfully organized in 2021 a test carriage of frozen poultry meat produced in Russia to Uzbekistan. The first "Agroexpress" transited through Kazakhstan in autonomous refrigerated containers.

During the test shipment, the company worked out all technological and control issues, which made it possible to replicate the project in other countries. Now companies in Uzbekistan, Azerbaijan and Iran can ship their agro-industrial products using this transport and logistics solution offered by Russian Railways’ subsidiary.

Participants in the "Agroexpress" project tell "1520. International" about what is needed to further scale the service and attract new nomenclatures of cargo.

Eugenia Fisenko, head of the press service of Russian Railways Logistics:

- Initially, the "Agroexpress" project was created to develop exports of Russian agro-industrial complex (AIC) products to Chinese provinces. As of today, railway routes to 12 destinations in China have been successfully tested. Moreover, now "Agroexpress" is available not only for exports, but also for imports. Delivery is performed within a short time and in compliance with the highest requirements of transport conditions. 

The main shipment destinations are in the Central Federal District, but other regions of our country are considered for shipping as well. Also it is planned to organize in April 2022, in cooperation with the government of Penza Region, AIC product shipments along the route Penza - Harbin - Penza.

Cargo shipments are offered by "Agroexpress" to customers both in direct rail service and using multimodal routes through Far Eastern ports. 

It is worth noting that last year, to guarantee uninterrupted shipments, Russian Railways Logistics purchased its own fleet of autonomous refrigerated containers to be significantly increased in the near future.

2021 saw the organization of a channel for the export of Russian agro-industrial products to Central Asian markets. In particular, the Russia - Uzbekistan transport corridor became one of the promising routes. At the end of 2021, Russian Railways completed the first shipment along the Russia - Uzbekistan – Russia route, during which specialists worked out all the technological and control issues for further replication of the project in other countries. Kazakhstan, being a transit country for this route, also fully participates in the "Agroexpress" project. 

In 2022, "Agroexpress" was joined by Azerbaijan. This direction will allow increasing export volumes on the routes of the International Transport Corridor (ITC) "North-South" and attracting neighboring countries to participate. An agreement on consolidation of cargoes and organization of transportation both in boxcars and containers as well as on provision of an agreed discount for the full logistics rate has been reached. Experts estimate the volume of "Agroexpress" cargo base on the routes of the "North-South" ITC at about 60 thousand tons per year, while there is a possibility to increase it to 100 thousand tons by 2025.

The first shipment of cargo from Iran through Azerbaijan to Moscow via the "North-South" ITC has already been organized, for which Russian Railways holding company provided a special tariff discount. In the near future Russian Railways Logistics will start regular shipments from Iran by one container train per week. In the future the company plans to establish regular export-import transportation of agro-industrial goods on the routes of the "North-South" ITC.

The key advantages of the service for shippers are speed, favorable rates, reliability of logistics services and regularity of accelerated trains. The service's customers include major Russian exporters such as SAE RESURS, Cherkizovo, Miratorg, EFKO, NZhMK, Ryazanochka, Soyuzmoloko and others. The possibility of shipping single containers as part of regular trains also opens prospects for small and medium businesses. The organization of import shipments and backloading provides a significant economic effect for both Russian and foreign producers and has a positive impact on the volume of international trade turnover.

This explains the high demand for the service among exporters. In the future, the project will be scaled throughout the EAEU. The countries of the Union are already expressing their interest in participation. Support of the project by the Government of the Russian Federation and a flexible tariff policy are also important factors for the successful and stable future of "Agroexpress".

Kairat Tapalov, Deputy General Director for Marketing of KTZ Express:

- Last year, NC KTZ and Russian Railways signed a memorandum of cooperation in the organization and development of the specialized container service "Agroexpress" to deliver agricultural products (meat, crops) to China in transit through Kazakhstan. For this purpose, a road map for the implementation of the project has been developed, according to which the service coordinator from the Kazakh side is KTZ, and the route operator in Kazakhstan is KTZ Express.

At the moment, target customers from Russia and Kazakhstan interested in the "Agroexpress" technology are being identified.  Then there are plans to determine the exact routes and establish a schedule of the trains.

Wholesale and distribution centers have been identified. In Russia they are Selyatino terminal (Moscow), Wholesale Distribution Center (WDC) RusAgroMarket (Novosibirsk), WDC Primorye (Vladivostok), WDC RusAgroMarket-Rostov (Vladivostok) and others.  In Kazakhstan, those are transport and logistics centers in Nur-Sultan and Shymkent, as well as the WDC in Karaganda. 
Meanwhile, in November 2021 a pilot shipment of two refrigerated containers of frozen chicken from Tambov (Russia) to Tashkent (Uzbekistan) was organized in transit through Kazakhstan. In December 2021 two containers of grapes from Chukursai station (Uzbekistan) to Selyatino station (Russia) were shipped in return. In these shipments Kazakhstan helps in every possible way to establish an optimal transportation cost through various preferences and also offers route options involving transport-logistic and wholesale-distribution centers. 

Rustam Mukhamedov, First Deputy Head of the Main Department for Logistics Development and Digitalization of O'zbekiston Temir Yo'llari:

- Today, the main advantages of the "Agroexpress" service are the rapid delivery of goods, the use of autonomous refrigerated containers ensuring the safety of cargo, simplified customs procedures and continuous online monitoring at every stage of transportation.

Also to create convenience, shippers are given tariff preferences of 50% by establishing special rates. In particular, in the territory of Uzbekistan the cargo transportation rate is $305, in Kazakhstan - $550, Russia - $528. In addition, there is a 30% reimbursement of the tariff for the transportation of fruit and vegetable and perishable goods in the territory of Uzbekistan. 

Meanwhile, today tariff preferences are available only at certain departure and receipt stations. We believe that, in order to further develop the service and attract new shippers, greater opportunities are required for the provision of preferences both in Russia and in Uzbekistan.

In addition, the cargo nomenclatures should be reviewed to apply tariff discounts and include other types of agro-industrial products (not only fruit and vegetable and perishable goods). Also, in times of lower volumes of shipments, the shipment of single containers should be organized.  For its part, companies in Uzbekistan are ready to increase the volume of shipments and contribute to the development of the "Agroexpress" project.

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