‘Trains between major seaports, that used to be unimaginable’
UTLC ERA, the largest operator on the broad gauge section of the New Silk Road, sees container transport by rail between Europe and China growing by 25 per cent this year, according to CEO Alexey Grom. The company expects a volume of 676,000 TEU in total that will be transported along this rail route in 2021.
The chief of the main operator for the countries Belarus, Kazakhstan and Kazakhstan was interviewed by our sister publication Nieuwsblad Transport. He spoke in length with journalist Nathalie van Herk, about the current situation on the New Silk Road, and how this was all unthinkable when he was still a student.
According to Grom, the growth is partly due to the stable position of rail transport during the corona crisis. “The pandemic has forced many shippers to reconsider the use of a particular mode of transport. At a time when shipping companies had to cancel many routes and air freight came to a standstill, rail freight traffic was able to proceed fairly smoothly.’
From cars to knick knacks
From exclusive cars to knick knacks; the Russian carrier does not focus on a specific category of goods. ‘In 2015, UTLC ERA started with a focus on expensive goods such as electronics and cars, and three years ago more than 80 per cent of the cargo supply consisted of expensive goods. Now it is about 40 per cent. The variety of goods is expanding and there are now more than a hundred different types.” According to Grom, this even includes goods that are cheaper than the transport costs between Europe and China.
According to Grom, an important growth market for Eurasian rail transit is food transport. “Although this development is currently limited by corona measures from China. There are some restrictions from the Chinese side for the transport of meat and fish, among other things.” The UTLC ERA CEO hopes that 2022 will be a year of further breakthrough when it comes to rail transport of foodstuffs from Europe to China. “The world cannot do without Italian bresaola, French wine, Swiss milk and Dutch cheese”, says Grom with a smile.
According to Grom, customers from Europe had to get used to the route. “They saw this route as a black hole; when trains go there, it’s just a matter of luck when they arrive on the other side of Eurasia, people thought.” But that thought is unfounded, Grom says. “That thought is absolutely unfounded. Just take into account the speed of trains on various parts. At the1520 gauge section our speed is three times higher than in Europe, for example, and sometimes faster than in China.”
Grom: “In Kazakhstan, Russia and Belarus, work is being done on increasing the capacity for handling trains. This is important because everything on the 1520 track is interrelated: if you have reached a high speed on one section, but there are difficulties on the route of the connected infrastructure, then all the efforts have been in vain.” Grom calls for more alignment among the parties active on the 1520 gauge track, and for betterintegration with the connected normal gauge infrastructure.
“We also call on our European colleagues to eliminate bottlenecks on the border infrastructure.” If there were no restrictions at the border with the European Union, UTLC ERA would now have 20 per cent more trains running on the route, he says.
According to Grom, the primary focus on passenger transport is something that will always remain. “But the second priority, in my opinion, is container trains. When I was still a student at university, it was unimaginable that cargo would be transported from one major seaport to another by any means of transport other than a ship. But now fundamental logistics principles have changed and we go from Liverpool or London via eight countries to China and back by rail.”
Grom: “In recent years, container trains have started with regular routes through the westernmost Russian enclave, the Kaliningrad region. The volume of containers transported via the Kaliningrad corridor has increased by a factor of 4.5 in 2020. In order to reduce congestion in the Polish direction, a new terminal for Eurasian rail freight was opened in the Kaliningrad region in October.”
However, due to the popularity of rail transport in the direction of Kaliningrad, Grom does not rule out that congestion can arise here too. Even if you build a third terminal, this area will always be busy. “Which may require new solutions, new border crossings and additional terminals.”
European Silk Road Summit
Alexey Grom will be a speaker at the European Silk Road Summit. On 7 & 8 December the European Silk Road Summit takes place in Amsterdam, the Netherlands. Interested? You can have a look at the programme here. Or, you can register here.
This article was originally written in Dutch by Nathalie van Herk from Nieuwsblad Transport.