New markets, new opportunities

Alexey Shilo, Russian Railways Deputy General Director 

 Russian Railways achieved good results on the international freight market in 2021. The main achievement is that we have managed to build mechanisms for interaction with partners in an online format and accelerate digitalization processes. The consequences of the coronavirus pandemic have made it possible to take a new look at the advantages of railroads for global logistics – stability, reliability, technology and speed of transportation. Moreover, the current situation has shown us new opportunities for cooperation with other modes of transport. We can already say with certainty that railways have become a mainstay for maritime operators – in cooperation with major sea lines, we have created new popular multimodal products that have allowed us to expand the geography of our services significantly.

However, we are still at the outset of transportation of international e-commerce goods, the volume of which is growing very rapidly. Practice shows that with the proper logistics in place, railroads can easily compete even in terms of time with traditional methods of delivery by air transport, not to mention the costs and carbon footprint of such operations.
Taking into account the prospects for growth in freight traffic, we pay special attention to the development of infrastructure on the busiest routes, debottlenecking, organization of border crossings, and the development of approaches to ports.

Along with the development of railway infrastructure, our priority is the advancement of digital infrastructure. Measures are being implemented to further increase the level of digitalization of transportation and the introduction of electronic data exchange (EDI) technology. In particular, relevant documents were signed with Chinese and Kazakh partners this year.

On September 9, taking into account the increase in traffic intensity, the Seven-Party Working Group on Transit (Germany, Poland, Belarus, Kazakhstan, Mongolia, China, Russia) approved the order of development and interaction on the through schedules of container trains in services between China and Europe, which regulates the procedure for the formation by the Parties of the firm-time slot schedule of transit container trains. In the future, the transition to a digital model of information exchange is planned.  

The implementation of the INTERTRAN project, aimed at full digitalization of international intermodal freight traffic, is continuing. The INTERTRAN information technology will make it possible to reduce cargo clearance time at the port-railway junction and at destination railway stations by four days, to 21 hours. More than 21,000 containers have been transported since the project was launched in a fully digital format. 

The “Freight Transportation” (ETP FT) electronic trading platform, which integrates transportation services, provision of rolling stock, and terminal and storage and logistics services of Russian Railways’ subsidiaries, is also gaining momentum. As a result, a shipper gets one-click access to loading resources and the organization of transportation, including transit transportation. Since 2020, the platform has been available to foreign freight owners. 

There are also growing requirements for information support of transportation, which can be satisfied by the use of satellite technologies. European partners show great interest in the development of transit shipments of food cargos from the EU countries to China using electronic navigation seals. 

The creation of favorable conditions for the realization of the transit potential of the national railroad network is facilitated by the close involvement of Russian Railways in the activities of international organizations. 

Within the framework of the Organization for Cooperation of Railways the drafting of the Agreement and Rules for the Transportation of Containers by Container Trains in International Traffic was completed. The Agreement and the Rules will establish a clear order of interaction between carriers and organizers of container trains and will solve all the sensitive problems in container transportation. Ten railway companies have already declared their intention to sign the Agreement.

Work continues to improve the Agreement on International Goods Transport by Rail (SMGS), including the issues of giving commodity-regulating functions to the SMGS consignment note and its use on the water sections of the track when it is implemented. On July 1, 2021 a new document came into force, which regulates the issues of placement and securing of freight in containers and which will ensure the safety of the transportation process, safety of life and health of railway transport employees, as well as cargos, rolling stock and infrastructure.

A great deal of work is being done to coordinate the interaction of all 1520 railroads. It is no exaggeration to say that Russian Railways acts as an integrator in the Eurasian transport space. The Rail Transport Council of the Commonwealth member states, as well as the integration associations including EAEU, SCO and others ensure greater coherence in the interaction of the railroads of our countries. 
  
The holding company’s priorities also include strengthening relations with Japanese partners. This year, Russian Railways opened a representative office in Tokyo to promote the company’s transportation and logistics services there.

To unlock the existing potential of cooperation, we promote logistics solutions that are in demand by businesses, for example, container delivery from Japan to Europe by TransSiberian LandBridge service. It is twice as fast as the sea route (19–22 days versus 45–50 days).

Also in April, RZD Logistics, FESCO and the Finnish logistics operator Nurminen Logistics began shipping cargos from Finland to East Asia via Russian ports in the Far East. In June, such shipments reached a regular level.

We are also working on organizing shipments from Japan in refrigerated containers, which can fill a very promising niche of perishable goods transportation.
Incidentally, the Far Eastern ports along with the Big Port of St. Petersburg are already included in the list of railroad checkpoints for food and agricultural products from Europe (the so-called “sanctioned” products).

Along with the development of new routes and types of transportation, we see potential in working on the expansion of the terminal network.

A promising area of Russian Railways’ foreign business is the development of transportation along the “North – South” international transport corridor, primarily its western branch from Europe to South Asia. So far, 4.5–6 million tons of cargos are transported annually along this route, mainly in communication with Azerbaijan.
The infrastructural component of the corridor, largely dependent on the construction by the Iranian side of the missing railway section – Astara-Resht line (170 km long, the project is included in the plans, but according to optimistic forecasts, commissioning will not take place before 2026), is still far from optimal; however, we already find logistical solutions for transit traffic. 

In July 2021, RZD Logistics, in cooperation with the Finnish logistics operator Nurminen Logistics Services OY, transported 32 large-tonnage containers of paper products from Finland to India. It was a test shipment, but it was also a full-fledged commercial shipment. I believe that after debugging the transportation on the sea leg and excluding cargo idling in the port, the transit time can be 20 days, which compared to the duration of sea transportation from Europe to India (35–40 days) would make the service quite competitive. 

We do not neglect plans to transport containers with consumer goods from India to Russia. 

In June 2021, RZD Logistics, REC JSC and the Uzbek logistics operator Uzagrologistics Centers LLC signed a memorandum on cooperation in the development of the Russia-Uzbekistan logistics corridor by the launch of Agroexpress trains. 

The project envisages the creation of a system of accelerated container trains carrying agro-industrial products based on competitive tariffs, paperless document management and accelerated cargo clearance procedures using the “green corridor” technology in order to provide systematic support to exports of domestic food producers.

At present, regular Agroexpress trains to and back from China have been launched.
If the project of the Russia – Uzbekistan railway export corridor is launched, the volume of agricultural cargos, according to preliminary estimates, could be increased by more than 500,000 tons per year by 2024. The range of cargos includes dairy and fermented milk products, meat products, by-products, fish, drinks, baby food, confectionery and chocolate. 

Regarding the promising areas of development of the Agroexpress project, the possibilities of expanding the geography of supplies to the countries of Central Asia and Transcaucasia, including the use of multimodal delivery, as well as the adjunction to the international “North – South” and “East – West” transport corridors are under consideration.