Russian Railways asks Kazakhstan for lower transit tariffs

Source: Kazakhstan Railways (KTZ)Kazakhstan Railways (KTZ)

Russian Railways has asked Kazakhstan’s railway company to reduce the transit tariffs for the transportation of agricultural products, including grain. It has been in negotiations with Kazakhstan Temir Zholy (KTZ) since September this year. This company raised the tariffs mid-October this year.

Since this time, KTZ – Freight Transportation, the country’s national freight carrier, raised the costs for cargo transport and empty wagons in domestic, import, export and transit traffic by 14,67 per cent.

Falling China-Russia volumes

Kazakhstan is an important transit country for traffic between China and Russia. Since the outbreak of the war, the export of grain from Russia to China has increased rapidly, as trade with Europe collapsed.

However, RZD pointed out this September that freight volumes between Russia and China were not as expected, mainly due to China’s zero-covid policy that sees whole metropolitan areas shut down for days. Consequently, terminals and border crossing infrastructure are also underperforming, due to either closures or lack of workforce.

According to the media source, the increased tariff of transit through Kazakhstan also has a significant impact on the falling export volumes to the countries of Central Asia and China. Russian Railways is therefore conducting a dialogue on the issue with KTZ, together with the leadership of the Omsk, Orenburg and Novosibirsk regions of Russia.

New Silk Road less affected

New Silk Road traffic in general (traffic between China and Europe) is less impacted by the transit tariff. This is according to Jet Young from Nurminen logistics. In a recent interview with RailFreight.com, he mentioned: “The rise of KTZ’s tariff did not affect the China-Euro express price that much.”

It is interesting to note that KTZ and Russian Railways are joint stakeholders, together with Belarusian Railways, of the operator UTLC ERA. This is the main operator for China-Europe trains on the broad gauge network, including Kazakhstan and Russia.

Author: Majorie van Leijen

Majorie van Leijen is the editor-in-chief of RailFreight.com, the online magazine for rail freight professionals.

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