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            august 21, 2018

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Indiaexportnews.com

Containersed rail freight through Central Asia soared 75pc in 2017

  13.02.2018    

With demand continuing to strengthen across Central Asia and along the China Railway Express network, containers travelling on routes through Russia, Belarus, and Kazakhstan surged 75 per cent in 2017 compared with the previous year.
A total of 175,000 TEU were handled last year by the Eurasia alliance of United Transport and Logistics Company (UTLC) that comprises national operators Russian Railways, the National Union Belarusian Railway, and Kazakhstan Temir Zholy.
UTLC president Alexey Grom said the strong growth of 2017 had enabled the company to make "even more ambitious" plans for the next few years, although he never spelled them out.
"The result we reached at the end of the year set a new record for the amount of transit trains in the infrastructure of the track. The plan to reach a TEU volume of 1 million are without change," he said in a statement, according to IHS Media.
One of the problems being faced by shippers using rail to send their cargo from China to Europe via Kazakhstan or Russia is a lack of capacity at peak periods. The rail routes are alternatives to air freight and trains which are typically 80 wagons long. But with airline capacity under pressure from rising demand, shippers are increasingly shifting cargo to the rails and those wagons are being quickly filled.
UTLC has tried to address this in its three territories with the deployment of the "XL train". During 2017, 115 trains were organised that were 100 wagons long, which enables a better use of equipment and reduces cost and delays. This was helped by new technology partnerships that Mr Grom said enabled the alliance members to make their services more accessible for customers and competitive for shippers.
The growth in containers through Central Asia is hardly surprising as the countries straddle the China Railway Express network that has become embedded in the supply chains of shippers over the past two years.
China-Europe rail now connects 36 Chinese cities and 38 European destinations, with the number of weekly block trains expanding from 10 to 12 two years ago to 54 trains in 25 services. Westbound service speed is now 12 to 15 days from original transit of 25 days, and container volume is expected to grow 15 per cent per year for the next 10 years to 636,000 TEU by 2027.
China's state media has reported that freight rates on the China Railway Express have fallen by 40 per cent since the services began in 2011, but forwarders and shippers using the route say prices have risen with demand. The rate per FEU weighing about 9,600 kilogrammes is between US$6,000 and $9,000 terminal to terminal.
Even though the rates are well above ocean, they are nowhere near shipping by air. "It is a super alternative to air freight," said a German wholesale shipper. "And it is very helpful to be at final destination in Europe in less than three weeks. We will use this option, but it will really be an option used for things that are running late late."



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