Ukrainian container train, source: Ukrainian Railway (UZ)

‘Ukraine best solution for China traffic to Central and Southeast Europe’

The main route of the New Silk Road bypasses Ukraine, but this is not necessary.  The country has a lot of opportunities in transporting containers via its territory, especially to countries in Central and Southeast Europe. This was claimed by Anton Sabaleuski, Director for Strategic Development and Investment Policy at Ukrainian Railway at the RailFreight Summit 2019 in Gdansk.

Ukrainian Railway operates a well-developed network of container trains in the country. “If you would like to ship something from Shanghai to Ukraine, you can ship it not only to the ports of Odesa, Pivdennyj or Chornomorsk, but also to the country’s largest cities such as Kyiv, Kharkiv, Dnipro and so on. We have established a well-connected hinterland. More than 55 per cent of exported and imported containers in Ukraine are moved by rail”, Sabaleuski said.

Lack of traffic

Nevertheless, Ukraine experiences a lack of a transit container traffic on its railway network. Most of the container trains running from China to the European Union run north of the country – via Belarus and Poland. “Unfortunately, Ukraine is not a part of the Trans-Eurasian routes. It is a big problem for us.

“If we look back at 2010, we had more container transit traffic than today”, he continued. “It was growing very well until 2013 – by 20 per cent annually. We reached our maximum figure, 32,000 TEUs, in 2013. But then you know what happened (the war in Donbas) and traffic volumes started to go down. Last year, we transported only about 8,000 TEUs of transit traffic with just one forwarder – the owner of the intermodal terminal in Dobra, Slovakia”, Sabaleuski noted, referring to the Transcontainer Company, a subsidiary of Russian Railways.

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Trans Eurasia Landbridge, source: Deutsche Bahn

Trans Eurasia Landbridge, source: Deutsche Bahn.

Political tensions

The manager of Ukrainian Railway said that such a situation is caused by mainly political factors. “When we are talking with customers in Europe or in China, we usually hear that we need to talk with the Russians to see whether they agree, whether they can provide their flatcars, containers or whatever. Therefore, the Europeans and Chinese prefer to transport containers via Belarus and Poland. It is a sad situation when politics play a very important and major role in trade development. As a result, shippers and forwarders are loosing about 10-15 million Euros every year by transporting containers on the longer routes”, Sabaleuski added.

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Anton Sabaleuski speaks at RailFreight Summit 2019, source: RailFreight Summit

Anton Sabaleuski speaks at RailFreight Summit 2019, source: RailFreight.

At the same time, he specified that his country can offer good opportunities for transit container traffic to some European countries. “Perhaps, Ukraine is not the best solution for Germany. But Ukraine is definitely the best solution for Central and Southeast Europe”, Sabaleuski said.

According to him, the way from China to Slovakia, Hungary, the Balkan countries, and even Italy via Ukraine is shorter and cheaper. It could be a great advantage for forwarders. Transportation of one 40-feet container via Ukraine’s territory costs 0.36 Euros per kilometre, via Belarus – 0.58-0.70 Euros, via Russia – 0.66-0.72 Euros and in Europe – 1.12-1.30 Euros per kilometre.

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Author: Mykola Zasiadko

Mykola Zasiadko is editor of online trade magazines RailTech.com and RailFreight.com.

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