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RailFreight Summit Special Edition: this is the live blog

Today the international rail freight community gathers in Brussels for the RailFreight Summit Special Edition: Instability in the Corridor. During this one-day conference, we will try to tackle the challenges the supply chain faces in relation to the war in Ukraine. What are the disruptions and alternatives? How do sanctions work, and what is the status of payments and insurance? Finally, what will the future possibly look like? The event programme starts at 9:30 a.m CET. Stay tuned!

16:31 – Blog ends

16:30 – This is a wrap, ladies and gentlemen! The RailFreight Summit Special Edition has reached its end! Thank you all for sticking around, for watching and for participating. We hope that you found the discussions fruitful for your business, and we look forward to welcoming you to one of our upcoming events. For now, enjoy your evening!

16:26 – The audience appears to be more positive about the future developments on the New Silk Road compared to this morning.

16:24 – “The corridor is not dead. Hopefully, the war will stop soon, and we need to see how things will work with sanctions then, but I’m positive that things will get back to normal”. That is de Jong’s main takeaway from today’s event. Marianna Levtov mentions that transport and logistics could flourish in a post-war Ukraine and help rebuild the country.

16:17 – In the future, the Silk Road will be completely different from what we know now. That is Leuchner’s assessment of the current situation. He also mentions that the time when dangerous goods will be transported between China and Europe is not far, which could surge Eurasian volumes.

16:15 – Chinese forwarders are more interested in shipping more containers to Russia. This could lead to a change in business models for rail freight companies, says Leuschner.

16:13 – European ports in the Baltic Sea will become more significant as rail freight companies seek to use them as alternatives for cargo distribution, says Uwe Leuschner.

16:10  – “How can the volumes on the Russian route be dropping while volumes in Kaliningrad are rising?” asks Majorie van Leijen. DMitrij Hasenkampf explains that maybe this is because Kaliningrad works also as a distribution location, meaning that volumes end up there for further forwarding to other destinations.

16:07 – Kaliningrad is also still a viable option, say some attendees.

16:06 – There is traction to develop the Middle Corridor, says Dmitrij Hasenkampf. This doesn’t’ mean that RTSB will stick to it in the future, but it’s good to have it as an efficient alternative.

16:03 – Onno de Jong joins the discussion to address the closing remarks also involving the audience.

15:59 – “Is the BRI going to survive the crisis?” asks Majorie van Leijen. “Certainly”, replies an audience member, maybe it will be different, but it will survive.

15:51 – The war undermines China’s claim that the BRI gives continental supply chain stability, underlines Wheeler.

15:49 – China exports 10x more to the EU than Russia, which is why its economy will be affected, says Wheeler.

15:47 – The war will affect the Chinese economy in the long term, predicts Wheeler.

15:45 – Wheeler navigates China’s powerplay with Russia, Europe and the USA. It is the largest trade partner for most countries and seems to be losing from the current state of affairs in Ukraine.

15:42 – Andre Wheeler, consultant and analyst of China and Asia business and geopolitics, is online for the final presentation for today!

15:40 – Levtov explains that by monitoring assets, you can also get a very good understanding of how functional rail infrastructure in a country is. For instance, it could help determine whether parts of the Ukrainian railway network are destroyed.

15:32 – Customers can even track their equipment stranded in Ukraine currently. Monitoring devices have an extended life span and are hard to destroy, so customers can still check their status even in a war zone and know if their assets are safe or not, explains Levtov.

15:30 – The cost of the additional asset monitoring service is something that most companies are willing to pay to provide more transparency to their customers, says the audience.

15:25 – Fleets are always separated by geography, says Levtov. What makes this fact critical? How important is it to have full control over your assets, especially in turbulent times? It is essential in practical terms (cases of destroyed cargo, wagons, containers). The importance of investing in security and fleet monitoring is highlighted by the disruptions the New Silk Road currently faces.

15:20 – Marianna Levtov takes the floor.

15:15 – Hello, everybody, and welcome back to the four and final session of the Railfreight Summit Special Edition. For this session, we have two speakers:

-Marianna Levtov from Nexxiot on asset transparency in times of crisis.

-Andre Wheeler from Wheeler Management Consulting on China’s Tacit support of Russia and what it means for the future of the BRI.

14:57 – This is a wrap for the sanctions and payments session. We are off to the last coffee break for today and will be back at 15:15 CET to close the RailFreight Summit Special Edition with the fourth and final session on the future of rail freight!

14:51 – What are the best practices when operating under a sanctions regime? Verkerk and Reilly sum them up:

-Create awareness within your company.

-Adopt internal compliance programmes.

-Address sanction risks in contracts/agreements.

-Assess potential Russian countermeasures.

14:44 – Currently, the audience engages in an interactive discussion with Verkerk and Reilly, which looks like a “troubleshooting” session since everyone looks for the best practices to operate under the sanctions.

14:35 – Dmitrij Hasenkampf from RTSB asks whether sanctions have proved to be an effective tool so far. Verkerk replies that sanctions are mainly used to cut money flows and prevent a war escalation. However, this perspective is interesting since sanctions affect businesses on all sides. Nevertheless, as Kristian Schmidt mentioned earlier today, the EU is preparing some support measures for this purpose.

14:29 –  One of this session’s main takeaways is that freight forwarders should “do their homework”. Specifically, Verkerk explained that authorities expect more from the companies under such circumstances than usual. As a result, freight forwarding companies should invest more time in research, asking questions, knowing what they transport and referring to experts for help. It is not always possible to know the end-user of your service, but it is quite important to invest in knowledge and work with the authorities and experts.

14:25 – Of course, the exclusion of Russian banks from the SWIFT system should not be overlooked, she adds. “If you have a customer in Russia using one of these banks, there is a risk of a payment default.”

14:21- The discussion now is about financial restrictions that can also be relevant for the rail freight business. Restrictions apply on loans and credit, euro-denominated notes, deposits exceeding 100,000 euros and transferable securities, explains Verkerk.

14:14 – The new EU sanctions, possibly announced later today,  will include a ban on Russian state-owned companies from public procurement in Europe and a freeze of all transactions with several state-owned Russian banks.

14:10 – However, as Verkerk and Reilly vividly highlight, companies should also be aware of the cargo they transport since many products are subject to sanctions. On top of that, import and export bans are also applied. The Eu import ban includes, among others, iron and steel products and listed railway materials.

14:05 – In a case study, Reilly explains that the percentage of ownership and control of a company plays a role in assessing if the company is subject to sanctions. However, how is it possible the check who owns a company? asks Onno de Jong.

14:00 – When it comes to sanctioned persons, things can become quite complicated, and companies should pay attention. For instance, board members or directors from the Russian Railways are part of the sanction lists, says Reilly.

13:57 – What is an “asset freeze”? It is still quite vague, but in short, it means freezing “everything of value”, says Reilly.

13:50 – Shanne Verkerk and Sarah Reilly are now giving an in-depth workshop on sanctions and payments, explaining what they are, how they function, and how companies can comply but also keep their business running.

13:49 – Lei explains that for insurance companies to cover war risks, they need co-insurers, who most of the time are the main players in this market.

13:41 – The sanctions do not affect the transport of controlled goods to be delivered in third countries, even if transiting through Russia, and even payments are possible from China, explains Lei. However, when big insurance players are not confident, this causes concern and insecurity to customers.

13:40 – According to Lei, rail operator companies in China like Xi’an include war insurance for the cargo and compensate fully if the cargo has to be returned, meaning that the shipping risks are substantially reduced.

13:36 – The development of relations and rail links between China and southeastern Asia is also an opportunity for Europe, says Lei.

13:31 – Crystal Lei takes the stage. China and Europe rely heavily on each other for imports/export. Lei highlights why Eurasian rail matters.

13:30 – We are back with Session III and sanctions on the table!

13:20 – Hello everyone, and welcome back! We have 10 minutes before starting with Session III of the Railfreight Summit Special Edition in Brussels. For this session, we will dive into sanctions and payments. Our speakers will be Crystal Lei discussing sanctions from an insurer’s perspective and Shanne Verkerk and Sarah Reilly, who will help us navigate the current restrictive measures. Grab a coffee and tune in!

12:30 – With this panel discussion, we wrapped up Session II. We will now have a lunch break and be back at 13:30 CET with Session III – Sanctions & Payments. Have a nice and relaxing break, and see you in a bit!

12:28 – We should not forget the main arguments for using rail-lead times, lower prices, and a green footprint. These arguments are still here, and the customers know it. We should be in close contact with our customers and let them decide, and they will decide to use rail, concluded Leuschner.

12:23 – According to Parisi, the most resilient solution is developing multiple alternatives and diversifying, not sticking to one or two alternatives. These alternatives do not have to carry all the volumes but be there for the customers and companies to choose and use.

12:20 – The Middle Corridor is like an alternative to an alternative, says Hau. The Russian route was developed as an alternative to ocean shipping, and the Middle Corridor is an alternative to Russia. It needs time and no pressure to develop.

12:15 – Transit through the Middle Corridor is like a puzzle. You need to match and sync all the different transport modes, narrates Hau.

12:14 – The port of Trieste is becoming a great alternative in serving central and eastern Europe. We need to prepare for a fast and efficient sea-rail interchange, stresses Parisi.

12:13 – The Black Sea, at the moment, is a bottleneck. According to Parisi, there is demand for cargo from Romania in Trieste since Constanza is congested, and the insurance companies do not favour this solution.

12:07 – The client is choosing what route to use, and we need to realise it says Leuschner, meaning that it’s a matter of trust by the customer side on which route to use, not the rail freight companies.

12:05 – That was all from Martin Koubek. We move to an expert panel discussion with Francesco Parisi, Alexander Hau, Uwe Leuschner and Tabea Klang.

12:01 – For sea-rail connections, through the ports of Trieste or Koper, for instance, there are also some limitations. For example, construction works in Slovenia hinder traffic and do not allow large volumes to be transported, said Koubek.

11:57 – Transit times are the main problem for the Middle Corridor alternatives since they are almost double as long. Also, rail links on the European part, like through Romania, are inefficient, explains Koubek.

11:51 – Trains are still running through the Polish border, nearly around 80 per cent of the traffic compared to the pre-war period, says Koubek.

11:50 – Up next comes Martin Koubek from METRANS. He will make a modality comparison concerning the current New Silk Road alternatives.

11:46 – The European leg of the Middle Corridor is equally problematic. From Poti to European destinations, no matter the transport mode, the transit time needs an extra 14 days, underlines an audience member.

11:40 – We need to improve the capacity after Azerbaijan. in the near future we must develop intermodal and multimodal solutions for cargo after reaching Azerbaijan, explains Yildiz.

11:38 – When we talk about capacity, professionals tend to compare the Middle Corridor with the northern route, and this is a mistake, highlights Yildiz

11:33 – Around six vessels will operate between Aktau and Baku in the Caspian Sea in September. “Are they enough?” asks Majorie van Leijen.

11:32 – It’s official that a Joint Venture involving countries from the MIddle Corridor is in the pipeline, says Batyrbekova. It will be ready to operate in mid-2023.

11:30 –  From a technical perspective, the route is challenging. That is why it is difficult to decrease rates and unify them, explains Batyrbekova.

11:25 – Cankat Yildiz and Leila Batyrbekova are ready to engage in a discussion with the moderators.

11:22 – The audience has spoken: the damage on the New Silk Road is substantial but can be reversed.

11:21 – The first speakers lined up for this session are Cankat Yildiz and Leila Batyrbekova.

11:20 – The RailFreight Summit Special Edition is live again with Session II – Middle Corridor & Other Alternatives!

11:15 – We are almost ready to kick-off Session II – Middle Corridor & Other Alternatives. Tune in!

10:58 – Networking is going strong during the coffee break!

10:52 – Session I is a wrap! We will now have a 30 minutes coffee break. Make sure you tune in again at 11:15 CET for Session II – Middle Corridor & Other Alternatives. The speakers for this session will be:

Cankat Yildiz

-Leila Batyrbekova

-Martin Koubek

-Alexander Hau 

-Tabea Klang 

-Uwe Leuschner 

-Francesco Stanislao Parisi

10:51 – The Belt and Road as a whole is a space for contacts and business development, not a place for political discussions. Eurasian rail is still fast and suitable, says Mirkhojayev. Customers should keep trusting rail.

10:50 – We must not overlook China’s zero-covid policy resulting in lockdowns. It mainly affects the trucking business, but the impact can be felt in the whole supply chain, explains Mirkhojayev.

10:47 – Mirkhojayev mentions the possibility of a Joint Venture between Middle Corridor countries. “In a year, the Middle Corridor could be a good alternative”, he says.

10:45 – Due to the turbulence, the forwarding industry must take cautious steps. After the war, volumes through Belarus will rise again, says Mirkhojayev.

10:37 – “We have to remain positive and wait for things to get back to normal”, concludes Jacky Jan.  The last but not least speaker for Session I is Diyor Mirkhojayev, discussing the challenges and opportunities of the current situation.

10:36 – A shift in dynamics is expected in China. Terminals closer to the shippers (Yi wu, Xian) will gain more market share, while smaller terminals will struggle, forecasts Jacky Jan.

10:35 – The Middle Corridor is also not competitive compared to sea transport, says Jacky Jan.

10:32 –  Insufficient links, higher freight rates and slow transit times are the main bottlenecks for the Middle Corridor as identified by Jacky Jan.

10:31 – Regarding the Middle Corridor, the route through Turkey seems to be the most preferred since insurance companies hesitate to cover transit through the Black Sea, explains Jacky Jan.

10:30 – Traditional routes via Russia will thrive, says Jacky Jan, seeing the situation as an opportunity.

10:27 – Delays in terminals are actually caused by the lack of volumes and the need to combine shipments, explains Jacky Jan.

10:25 – Operation wise, the transit times are excellent currently, says Jacky Jan.

10:23 – Up next on the stage is Jacky Jan, with an interesting approach to Eurasian routes.

10:21 – “For the moment, my top priority is strengthening the rail links between Europe and Ukraine”, stresses Schmidt.

10:20 – “I wouldn’t assume that the relationship between Europe-China would change overnight because of the war. We have a strong partnership”, underlines Schmidt.

10:17 – The war is a challenge for the trade relationship between Europe-China, says Schmidt. This is one of the main topics in the bilateral discussions table.

10:13 – The EU speaks with the countries in the Middle Corridor, focusing on generating investments in the route. “We see these countries as our partners”, highlights Schmidt.

10:12 – How does the EU plan to support the companies for the losses? asks Majorie van Leijen. “The commission will launch state aid packages for companies suffering from the sanctions”, replies Schmidt.

10:11 – There is no doubt that sanctions cut in both ways. European transport, the supply chain and companies are also impacted, comments Schmidt. But we should firstly keep in mind Ukraine, and then the rest.

10:10 – No restrictions in train movements from the new sanctions, says Schmidt. However, road haulage from Russia and Belarus will be banned, excluding only essential goods like pharmaceuticals.

10:07 – That was a wrap for Onno de Jong. The next speaker is Kristian Schmidt.

10:06 – Some clients are again confident in using the Russian route, especially for LCL shipments, commented Roland Verbraak from BTT Multimodal.

10:05 – Lockdowns in China are currently the “elephant in the room” that we avoid noticing, on top of the war, concluded de Jong.

10:02 – The macroeconomic outlook for Europe is worrying. We expect immense economic inflation and loss of confidence, possibly resulting in less demand for transport, highlights de Jong.

10:00 – “Will we see restrictions on train movements with the new sanctions package?” wonders de Jong.

09:58 – Nationalisation of assets (i.e. Russian subsidiaries) constitutes a high-risk situation, says de Jong.

09:55 – Sanctions: Strictly speaking, rail transport could continue through Russia. Chinese forwarders arrange extra trains towards Russia. London marine insurers label all Russian waters as high risk.

09:53 – Huge east-west volume imbalances, is it macroeconomics or the war? asks de Jong.

09:52 – The 1 million TEU milestone between Europe-Chin was already reached in 2021, but the volume decline for 2022 is massive, says de Jong.

09:51 –  What we know is:

-Ukraine was becoming increasingly important.

-Transit through Russia still takes place.

-Insurance companies drop out of the corridor.

-The Middle corridor is seen as the holy grail.

-Fifth package of sanctions is on the way.

09:50 – When we met in Amsterdam, we were discussing the positive outlook of the New Silk Road, but now we are facing a war. What do we know so far about the situation? asks de Jong.

09:45 – Onno de Jong takes the stage to discuss the “Everchanging Current Affairs on the New Silk Road”.

09:40 –  Question to the audience:Why do you attend the event?”

Some answers:

-“I want to see what the industry thinks about the current situation”.

-“I want to connect with all the colleagues and exchange ideas about the Middle Corridor”.

-“I want to know what measures we can take to tackle the situation”.

Exchanging ideas and getting in touch with other professionals to find common ground seems to be the main reason for attending this special event.

09:36 – Welcome words by moderator Majorie van Leijen. “I’d like to thank you for connecting with each other, especially in a more difficult setting”.

09:30 – And the RailFreight Summit Special Edition is live, ladies and gentlemen, with a full room! We hope that you will enjoy it and find it informative!

09:20 – The RailFreight Summit Special Edition in Brussels is ready to kick-off with Session I – Current situation & Prognoses.

The speakers for this session are:

Onno De Jong – Senior Consultant Transport, Infrastructure & Mobility, Ecorys

Kristian Schmidt – Director for Land Transport – European Commission – DG Mobility and Transport

Jacky Jan – Managing Director, New Silk Road Intermodal

Diyor Mirkhojayev – Commercial director of Neptune logistics group

09:00 – Just half an hour before the RailFreight Summit Special Edition goes live! Haven’t you registered yet? You can still do it here.

08:40 – The RailFreight editors are ready for the day!

08:30 – We are an hour away before the RailFreight Summit Special Edition starts. The event comprises four sessions between 09:30 and 16:30. In detail:

09:30 – 10:45: Session I – Current situation & Prognoses

11:15 – 12:30: Session II – Middle Corridor & Other Alternatives 

13:30 – 14:45: Session III – Sanctions & Payments

15:15 – 16:30: Session IV – Future of rail freight

08:18 – Follow the signs and come to the RailFreight Summit Special Edition! Are you up for a last-minute registration? You can still do it here.

08:05 – The stage is set up, and the team prepares to welcome the speakers and the audience, both physically and digitally!

06:40 – Good morning, everyone from Brussels! This is the live blog of the RailFreight Summit Special Edition. Here you can follow in real-time the discussions taking place in the event. We start at 9:30 a.m CET sharp so make sure you tune in!

Author: Nikos Papatolios

Nikos Papatolios is editor of RailFreight.com, the online magazine for rail freight professionals.

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