– Alexey Nikolaevich, how do you assess the results of 2024?
– Last year's groundbreaking accomplishment was reaching our highest-ever transportation figure: 746 thousand TEU. We have successfully crossed the key psychological threshold of 700,000 TEU. Our container volumes held steady at 670-690 thousand TEU from 2021 to 2023, which, I should note, marked a substantial leap from 550 thousand TEU in 2020. In my opinion, the overall performance of the company last year should have satisfied the shareholders.
The volume of transportation in the company's services has also grown by nearly 11% compared to 2023 Despite growing competition, we have managed to maintain approximately 10% of the container transportation volume handled by Russian Railways and its affiliates.
– Are there any new shippers operating within the East–West–East corridor?
–New shippers are continually emerging, as the corridor is not confined to a single direct route between two points. The corridor can be described as a space where additional routes, shippers, and new consignees emerge. In 2024, the introduction of 28 additional routes further expanded the company's transportation geography. This brings the total number of routes in our services to 769 as of today. By comparison, the company operated only 15 routes in 2015.
– Did the company have to cancel operations on any specific routes in 2024?
– It is not entirely appropriate to cancel operations on routes integrated with our business model. Certain routes are simply "on hold" because of suspensions initiated by our neighbors in the 1,520 mm gauge infrastructure. For example, the route between China and Finland, in both directions. Our Finnish colleagues remain in constant contact, urging us to keep this issue on the agenda, recognizing the corridor's competitiveness and effectiveness. If transportation resumes smoothly, it could boost growth in Eurasian container transit.
The Kaliningrad route faces a similar issue, where we are currently unable to operate because of restrictions on using the Lithuanian Railways' network. In 2021, the volume on this route exceeded 170,000 TEU, while its potential is estimated at half a million containers. Therefore, this indicates room for growth and the key is to effectively leverage these opportunities for the benefit of all participants in the transportation process.
– What is your perspective on the balance of cargo flows between the China–Europe and Europe–China routes?
– I would like to begin by noting that in 2024, the volume of traffic on the China–Europe–China route saw an 80% year-on-year increase. This marks a substantial transformation. Accommodating such growth presents a significant challenge for any infrastructure. Particularly noteworthy is the westbound traffic from China to Europe, which surged by 131%, reaching 331,000 TEU compared to 2023 levels. In the opposite direction, from Europe to China, container traffic declined by 26.7% by the end of 2024, reaching 50,000 TEU. However, it did not drop to zero, as many had predicted. The route remained a preferred option for our European clients and certain Chinese customers moving goods from the EU to China. Despite this, the imbalance between the two directions remains quite pronounced. Over the course of the year, we worked closely with our shareholders and partners to optimize the transportation process and improve the balance across routes.
– How did you address the issue of optimizing flows?
– As always, our approach involved seeking out new customers and additional volumes for the West-to-East direction.
Alongside engaging with cargo owners, we conducted numerous meetings and negotiations with owners of empty containers to integrate them into our services for onward transit to China. This led to a substantial growth in traffic volumes on the Belarus–China and Russia–China routes. When looking at the past two years instead of just one, this volume has more than doubled. Plans are already in place to expand it further in 2025.
– What types of items are included in your shipments?
– By the end of 2024, UTLC ERA's services had transported goods worth a total of $41.6 billion, representing a 17.8% increase compared to 2023. Our shipments mainly consist of what we refer to as high added value goods. The top five categories include electrical devices, mechanical equipment, automotive and transport equipment, clothing, footwear and accessories, as well as optics and medical equipment.
– How would you rate the progress of the railway infrastructure modernization in the East–West corridor?
– The completion of the second tracks on Kazakhstan's Dostyk–Moyinty section, which borders Chinese Railways infrastructure, is scheduled for 2025. According to stakeholder and partner reports, operations will commence in the latter half of 2025. This modernization project serves dual purposes: it eliminates the bottleneck of the single-track section while creating an additional cargo transfer point for bilateral trade between Kazakhstan and China. Accelerated cargo departure from Dostyk will free up capacity to handle increased freight volumes from China.
It is crucial for us to ensure that there is no congestion in the later stages of transportation, regardless of whether the cargo is headed to Russia or Belarus, so that the subsequent sections can develop their throughput capacity in a synchronized manner. As a matter of fact, there are reserves for this on the Kazakhstan-Russia border.
We are also closely monitoring the progress of the project to establish a third border crossing on the Kazakhstan–China border near the Bakhty station, as well as the construction of the Bakhty–Ayagoz railway section. This project demonstrates considerable growth potential, with notable interest already being shown by exporters and importers from Russia and Belarus. This project’s implementation can be naturally coordinated with the resumption of transit traffic to Kaliningrad and Finland, which I referred to earlier.
– What new logistics and distribution centers (LDCs) are you collaborating with along the East–West corridor?
– We are particularly interested in all logistics and distribution centers opening across the East–West corridor that fit our business model. Our priority is terminals listed on the shareholders' balance sheet.
For example, when transporting containers via gondolas from China to Russia and Belarus, we make use of off-dock terminals in Kazakhstan in agreement with our Kazakh shareholder. In these cases, we leverage schedule lines intended for empty gondolas, but we load them with containers instead.
Another example is the terminal of our shareholder, Russian Railways, located in the Moscow region at the Yuzhny Port Logistics and Distribution Center (its official opening is expected soon. – Editor's note). In early January, we coordinated with the management of the Central Committee of Russian Railways to dispatch several container trains from this terminal.
I would like to highlight that in Belarus, we have increased the processing volumes of goods imported from China at logistics terminals near Minsk. Currently, we are seeking new terminal facilities, and I believe we will start collaborating with new terminals on the Belarusian Railways network later this year.
– What are your projections for the year ahead?
– Our six-year strategy, developed and approved by the shareholders, concludes in 2025. By the end of the year, we aim to achieve an operating volume of at least 750 thousand TEU.
We are hopeful that emerging infrastructure opportunities will enable us to optimize our commercial program for better results.
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