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            october 18, 2018

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27th CCTT Plenary Session in Russia – from the GETO’s point of view

  11.10.2018    

“Those of you who have heard me speak at earlier plenary sessions know that I don’t only applaud the progress made in the traffics across the land bridge between Asia and Europa – I also deal out criticism. And so I have to say that some current developments make me think, even worry me, developments that we have to confront together.” After this introductory remark,  Hans Reinhard, President of the Group of European TransEurasia Operators and Forwarders (GETO) and Vice Chairman of CCTT, highlighted diverse negative developments in the block train traffics between China and Europe in his speech at the 27th Plenary Session of the International Council on Transsiberian Transportation (CCTT), which took place on October 3 and 4 in Sochi, Russia.  
Even though growth forecasts concerning block trains dispatched or TEUs handled remain promising for 2018, there are some major obstacles which are threatening to jeopardize the stability of these traffics or which are already jeopardizing it.
In his speech, Reinhard pointed out that national CIS railway companies are currently profiting from political circumstances to attack existing train connections by offering rates and conditions that are not in line with the market, thus systematically driving small and medium sized operators from the market, although this leads to a loss of quality and causes coordination problems in Europe. A sort of quasi-monopolism with all its negative consequences is thus pre-programmed.
Another acute problem is the financial unbalance of diverse operators, as the Chinese platforms continue, even increasingly, allocating to the operator the interim financing of train handling between the Chinese external border and the European destination. Apart from quality losses, another consequence is that operators can’t then concentrate any longer on urgently needed investments in infrastructure.
A further problem, one that has been known for quite some time now, are infra-structural shortcomings. The European rail network is running at over-capacity, especially the border crossings are difficult spots. Particularly in Germany, the trains in the railway network are much more tightly synchronized in time, and there’s a much bigger variety of goods, which slows down and complicates handling.
The situation is even worse at Malaszewicze on the Byelorussian-Polish border. In view of the rapidly increasing transport volumes especially in west-bound traffics, this multi-terminal border station at the external EU border is already working at full capacity load. Although the border infrastructure was modernized with EU funding a couple of years ago, the facilities were not designed for the enormous growth in container trains ex China that is being registered at the moment. In March, additional modernization measures were initiated; they are however temporarily reducing the handling capacity. Alternative routes via Kaliningrad or Lithuania are being examined. Such plans cannot be implemented without political interference and the appropriate investments in order to eventually reach the capacity of Malaszewicze.
In Germany, it would already be of great help to promptly implement the 740-meter network. One would then not have to split the trains at the borders, for example coming from Poland. Longer freight trains come with significant benefits for all, as transports are more efficient and cheaper. Moreover, the easier handling at border crossings saves time and minimizes the risk of delays or downtime.
In conclusion, Reinhard again appealed to the participants of the meeting to endeavor to increase coordination and cooperation between the European players and the Chinese platforms. Instead of promoting monopolism, all parties actively involved in rail freight traffics between Europe and Asia should aim to achieve more transparency and market diversity.
GETO as a neutral community of interests is prepared to act as a network builder and partner for political organizations, commercial structures and media multipliers concerning carriers, forwarding, operations and value-added services along this corridor. “Only together will we be able to create solutions that are appropriate to today’s fast growth”, was Reinhard’s appeal at the end of his speech.

GETO



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