RZD to offer discounts on the Moscow-Mumbai corridor
Russian Railways (RZD) will offer a 20 per cent discount for the transportation of containers along the eastern branch of the International North-South Transport Corridor (INSTC). The discount will be valid throughout 2023.
The decision was taken by the board of RZD on 1 December. In addition to this discount, RZD claimed they are extending the 20,7 per cent discount on the transportation of containers in gondola cars. This initiative was launched in September and will be extended throughout next year.
As RZD pointed out on Telegram, the discount does come with one condition. It will be applicable to containers being transported via the Russian-Kazakh border crossings as well as the Bolashak-Serkhetyaka border crossing between Kazakhstan and Turkmenistan. By eastern branch of the INSTC, RZD means the section of the corridor that “connects Russia with the countries of the Caspian basin, the Persian Gulf, Central, South, and Southeast Asia”.
Various possible reasons for RZD’s discounts
The causes behind such discounts have not been disclosed yet. However, there are a few factors that might have led RZD to apply them. RZD has been in negotiations with Kazakhstan since September to have transit tariffs reduced. The Kazakh railway company, Kazakhstan Temir Zholy (KTZ), has increased the costs for cargo transport and empty wagons in domestic, import, export, and transit traffic in October by 14,67 per cent. The discount might have therefore been implemented to compensate for the increase imposed by KTZ.
On the other hand, the discount might come in order to further boost transportation via the Russian East and the Far East. Data from RZD has, in fact, shown that, during the first eleven months of 2022, rail freight on their network has slightly decreased. Throughout this period, 1,131,700,000 tonnes were loaded, signalling a 3,6 per cent decrease compared to the same period in 2021. A similar trend was shown for the month of November as well, with a 4,1 per cent decline compared to the same month in 2021.
This decrease can be partly attributed to the sanctions applied against Russia since the start of the war in Ukraine. However, things are looking brighter on the eastern side of RZD’s network. Operations in the east of the country have increased in East Siberia (+2,3 per cent), Transbaikal (+7 per cent), and the Russian Far East (+6,7 per cent).