Poor reliability of Russian rail network pushes shippers onto trucks

Image: Shutterstock. Locomotive74

Much like the rail and road modalities are clashing in Europe, with the ensuing discussions about rail’s competitiveness, Russia is having similar issues. A recent conference on the topic prompted a sector appeal to the government. The Russian rail freight sector protests the order of priority on the Russian network, on which freight takes last place.

A rail versus road conference in Moscow on 23 May posed the questions: “Who is winning and why?” and “What should a shipper do in conditions of competition between transport modalities?”.

The conference, attended by shippers, operators, logistics companies and analysts, produced a joint letter to the government. The involved parties argue that, unlike in Europe, the prices of rail are not so much the issue. Rather, it is the reliability and punctuality of rail that makes it yield to trucks. Among other things, the rail freight sector protests its bottom position on the Russian rail network’s priority list.

Russian reverse modal shift

The attendees, according to the joint letter, found that a particular subset of goods is undergoing a reverse modal shift. Refractory products, ferrous scrap metal, sugar, fluxes, cement, wheeled and tracked vehicles and machine-building equipment more often reached their destinations in trucks. If rail’s market share had remained the same as ten years ago, it would be transporting an additional 17 million tonnes of goods annually.

Moreover, distance matters in Russia. Trucks strongly compete with trains on medium-distance deliveries, up to 2,000 kilometres. However, the joint letter notes that trucks are becoming increasingly popular at up to 5,000 kilometres as well.

The – perhaps notable – conclusion of the conference’s attendees is that rail’s price does not matter all that much for the observed reverse modal shift. Instead, it is the reliability of the Russian rail network that is making clients reconsider their mode of transportation. Goods cannot always be sent via rail, and its timeliness is lacking.

What does Russian rail freight propose?

Firstly, the sector wants a “guaranteed acceptance of cargo for transportation.” It wants to achieve that by not “taking into account the priority of the rules of non-discriminatory access,” which is the list that determines which trains get priority on the Russian network. Rail freight is at the bottom of the Russian list.

Moreover, the sector calls for a lowering of tariffs. Such a decrease is supposed to benefit, for example, ferrous scrap metals transportation, of which a lot has been subject to a reverse modal shift.

Additionally, the return of empty wagons should be based on the “needs and technical capabilities” of shippers rather than carriers. The sector also wants better information platforms so that shippers understand transportation options better. It also calls for more freedom in fastening and sealing methods and restoring carriers’ liability towards clients.

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Author: Dennis van der Laan

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