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Japan is testing the Trans-Siberian Railway

Rail freight shipments from the country of the Rising Sun through the network of Russian Railways are growing rapidly
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Over the past three years, Russian Railways has offered Japanese shippers several new services for cargo delivery to Europe. Speed, price and reliability of rail transport have attracted Japanese companies and allowed them to increase the volume of their transit traffic through Russia threefold in the last two years. Experts of Russian Railways, traders and operators describe the prospects and forecasts of this market development and improvement of the 1520. International shipment services.

According to Nikolai Dosegaev, the Head of the Department of Transport and Logistics Coordination of Russian Railways’ Corporate Transportation Service Center, as of the end of 2021 the volume of Russian Railways’ traffic to/from Japan increased by 15.4% to 67,400 TEUs. Import traffic in service with Japan in the past year increased by 26.2%, as compared to 2020, to 8,800 TEUs. The volume of transit traffic through Russia in service with Japan increased threefold to 8,200 TEUs.

Japanese shippers are now interested in shipments on the Trans-Siberian Railway, as evidenced by a significant increase in traffic in 2021 as compared to the previous year, says Sergey Trushenkov, the Deputy General Representative of Russian Railways in Japan. 

"Problems in 2020 and 2021 caused by the growth of sea freight rates and the 'traffic jam' in the Suez Canal confirmed the strategy of shippers who decided to diversify cargo flows and partially transfer them to the Trans-Siberian Railway," says Sergei Trushenkov. "Some major Japanese forwarders intend to transfer to the Trans-Siberian route up to 80% of the Japan-Europe cargo flow".

According to Andrei Tikhomirov, the Head of the Department of Macroeconomics and Forecasting Methodology at the Institute of Economics and Transport Development, the growth in transit cargoes coming from Japan through the Russian Railways’ network occurred against the background of the introduction of restrictive quarantine measures, in particular, restrictions on the operation of the Asia-Pacific Region ports.

Meanwhile, the railway today offers a number of advantages to Japanese shippers.  For example, according to Sergey Lyovin, the Deputy General Director for Commercial Activities in Russian Railways Logistics JSC (a subsidiary of Russian Railways), the railroad transportation enables almost halving the delivery time of goods from Japan and Korea to Europe, as compared to the sea transportation.

The use of the INTERTRAN technology also makes rail transport more competitive, as compared to sea routes, for shippers from Japan to Europe, says Andrei Tikhomirov.
However, the most important element in the increase of Japanese freight traffic was the introduction of new and the development of existing freight delivery services. As a reminder, the first shipments of Japanese cargo via the Trans-Siberian Railway date back to the Soviet Union period. From 1970s to 1980s the Trans-Siberian Railway was constantly used for freight traffic from Japan to Europe, but after dissolution of the country in 1991 its volume sharply decreased.

The development of Japanese cargo transportation via the Russian railway network was renewed in 2019, when Russian Railways, the Ministry of Transport of the Russian Federation, the Ministry of Land, Infrastructure, Transport and Tourism of Japan and the Association of Trans-Siberian Intermodal Operators of Japan signed a memorandum on regular railway container traffic on the Japan - Russia - Europe route.

According to Sergei Lyovin, in 2019 the company organized the Trans-Siberian Land Bridge service to deliver cargo from APR countries to Europe. Its route passes through the port of Vladivostok and the Brest-Malaszewicze border crossing.

In 2020 Russian Railways Logistics JSC and FESCO Transportation Group sent the first full container train with Japanese cargoes for European consumers along the Trans-Siberian Railway. The first train with Japanese cargoes carried goods that arrived at Vladivostok commercial seaport from the Japanese ports of Hakata, Kobe, Toyama and Yokohama. The train then moved to the destination station in Brest, where the containers were reloaded onto 1,435 gauge rolling stock and sent by European railways to their final destinations (Germany, Belgium, the Netherlands, and other countries).

According to Sergei Lyovin, container trains are now dispatched under the project on a regular basis.
In 2020, the Danish company Maersk, together with Russian Railways and Modul LLC, launched the AE19 service for Japanese cargo delivery along the Trans-Siberian Railway as part of the global line schedule. The railway runs from Nakhodka-Vostochnaya station to the port of St. Petersburg. Containers are then shipped by feeder services on the Baltic Sea to Northern European ports. 

"Given the post-COVID constraints in Suez Canal capacity, in 2021 we saw an increased demand from Japanese customers, which allowed us to organize a new regular service to the British port of Felixstowe," says Andrey Naraevsky, the Deputy General Director for Development and Government Relations of Maersk LLC - Eastern Europe Region. "The 2021 developments confirm that the Trans-Siberian transit route has firmly and permanently taken an important place in the market of container transportation from Asia to Europe". 

According to Nikolay Dosegaev, in 2022 the holding company jointly with Maersk plans to increase the frequency of trains carrying Japanese cargoes to five times a week. 
Sergey Trushenkov mentions that in December 2021 the holding company supported by the Ministry of Transport of Japan launched a project for transportation of refrigerated containers of Japanese shippers and plans to develop it in 2022. 

"Additional opportunities for freight transportation will expand along with the implementation of investment projects for the enhancement of the main infrastructure of Russian Railways, and the development of railway transit container services, multimodal container transportation and sea logistics between the ports of Japan and Russian ports in the Far East region," believes Andrey Tikhomirov.

According to forecasts, the growth in the segment of Japanese cargo transportation through Russian Railways’ network will continue in 2022. "Thanks to Russian Railways’ efforts, the Trans-Siberian route is becoming the fastest and safest way to deliver cargo from Asia to Europe, which is obvious against the background of annual losses of sea container shipments," says Sergei Trushenkov. "At the same time, the Trans-Siberian Railway is fully electrified, and shippers want to avoid the carbon tax that the EU is introducing next year. In addition to the above advantages, an average cost of transit transportation from Japan to Europe via the Trans-Siberian Railway is now lower than by sea".

Andrei Tikhomirov also believes that the Euro-Asian freight market, including in terms of Japan's trade and economic ties with European countries, will maintain positive dynamics. "Increasing the share of Russian railways in the Euro-Asian container transportation market shall be contributed by the geographical expansion of services, diversification of cargo routes, steady cargo delivery, which is one of the key factors for Japanese freight owners in the choice of transportation routes," says the expert.

  Anastasia Baranets

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