Basel, 30 September 2016. The year 2015, like the previous year, saw an enormous increase again in regular rail connections between China and Europe, which have become firmly established, beside air and sea freight, as an interesting product especially with European end users. The transit time, nowadays down to an average of 14 to 15 days, is playing an important role here, too. Overall, though, a look back to the year 2015 and the first six months of 2016 still shows a mixed picture. Historically low energy prices led to a reduction in financing options and thus to a marked decline in big projects. This made itself strongly felt also among the state run railways as well as among the forwarders and operators in the field of supply chain transports. Moreover, the sanctions still in place between Europe and Russia have a very negative impact on the traffics in question.
This is how Hans Reinhard, President of GETO, the Group of European Transsiberian Operators and Forwarders, and Deputy Secretary General of CCTT, the International Coordinating Council on Transsiberian Transportation, summed up the situation at the 25th Plenary Meeting of CCTT, which was held at the invitation of Ulaanbaatar Railways JSC in Ulaanbaatar, Mongolia, on 14 and 15 September. 180 participants from 18 countries attended the conference, among them representatives of the railway companies involved in this corridor, of the Russian Federation’s Ministry of Transport, the Federal Customs Service and the Federal Tariff Service, of international associations such as the European GETO, the Japanese TSIOAJ, the CIT, UIC, FIATA, as well as numerous representatives of leading transport and logistics companies.
Oleg Belozerov, President of Russian Railways OJSC and Chairman of CCTT, delivered the opening address, discussing economic and commercial prospects of the Transsiberian railway corridor in international transit.
In his speech, Hans Reinhard highlighted in detail the market assessment and the future outlook especially in regard to the container block train connections from the GETO point of view. The current, enormous growth rates are owed mainly to the Chinese Government’s One Belt, One Road initiative and the corresponding subventions. Thus, for GETO, taking measures that allow guaranteeing the train services in the long run is imperative. These measures include the further decrease in rates for routes, wagons and containers so prices can be kept at the current, subvention-supported level also in future.
GETO members also identify offering clocked services according to schedule, enforcing an additional reduction of transit times, creating homogeneous IT structures to sped up handling, and introducing attractive models for empty container return as essential steps. Whereby, in the long run, the latter can only be realistically achieved with an increase in eastbound volumes.
“It is true, we cannot change the trade imbalance between Asia and Europe, but we can actively contribute our part to getting more eastbound shipments transported via rail. Yet we should not only focus on traffics to the Far East, but also take into consideration transports to destinations in Central Asia, Mongolia or Asian Russia – all these traffics help return rolling stock and containers and thus stabilize rates in the long run, or even reduce them directly”, Reinhard said in his speech.
For GETO, another measure to cut costs and thus to enhance competitiveness, is the creation of so-called hub systems at the CIS entry and exit borders. This would allow bundling train traffics and increasing utilization along the broad gauge railway routes; at this time, full utilization cannot be reached yet as there are different regulations in place in Europe and China concerning maximum train lengths.