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            september 19, 2019

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Continued growth on the Siberian route


By Timo Hamalainen

Container traffic across Siberia continues to grow. The route also offers a competitive alternative from West to East. In 2004, container traffic volumes between the Far East and Finland grew by 20% compared to the previous year. Last year 125,000 TEU were transported on the route. «The growth has evened out, without the bursts of activity we saw the year before last. Next year we expect cargo volumes to rise to about 150,000 TEU,» explains Sales Manager Tiina Makinen from VR Cargo.

The Trans-Siberian Railway primarily carries electronics and consumer goods from Korea. China and Japan are also important import countries. From Finland the goods usually continue their journey to Russia and CIS countries. In export container traffic the same countries are destinations, but now Japan has surpassed China in terms of total volume. Mechanical forest industry and metal industry products, as well as construction materials, are most frequently loaded into containers. «Container volumes in the export and import directions are fairly well balanced, but in export containers only about one-third are loaded,» Makinen states.

Green Integrated Logistics looking from Finland to the East

The Korea-domiciled Green Integrated Logistics established itself in Finland three years ago. According to Branch Director Boris Yoo, Finland offers the company superb opportunities to provide logistics services for trade taking place between the Far East and Russia as well as Europe. Yoo says that the company plans are to stay in Finland for a long time. «Our customers want to maintain terminals in Finland because it is an EU country bordering on Russia. We are constantly on the lookout for new products from Finland and Europe, as well as customers who could utilise railway routes to the Far East and China.» Yoo says that customers place particular value on the security in Finland as well as the fact that goods can be delivered quickly from there to Russia.

An international network
Founded in 1997, Green Integrated Logistics is a company that currently has 27 branch offices in countries all over the world, including the USA, China and CIS countries. The company utilises over 2,500 of its own containers. The company's main customer is the Korea-based Samsung Electronics whose products fill the Kouvola terminal. The newest joint venture location can be found in Slovakia, where Samsung has built a plant manufacturing products such as LCD television monitors. Green Integrated Logistics manages the plant's logistics and has built an adjacent terminal for that purpose. Green Integrated Logistics markets the TSR railway routes traversing Siberia that offer the possibilities to transport freight from the Far East, China and Japan to European and Russian markets as well as in the opposite direction. «We also manage sea and air transport. About 90% of the goods transported through Finland travel as TSR transports in containers, About one-tenth of that is transported by sea.» Yoo says that most of Samsung's goods now come from China; a few years ago they came mainly from Korea. For eastbound transports, the company has found certain Finnish customers who are still testing the route. «Many Finns seem to distrust the route's security and dependability; these matters are however in good order. Besides being able to track the progress of shipments through the Internet, we also have an office in Vostochny with whom we can exchange preliminary information about transports, and about who is managing the shipments on that end.»

Experiments direct from China

Green Integrated Logistics has a total of 25,000 m2 of terminal space in Kouvola; last year the company handled over 10,000 forty-foot containers. «Based on our previous experience the volume can be increased this year by about 20% compared to last year. The demand for products in Russia is expected to grow substantially.» Yoo says that many Chinese and Russian customers are interested in the railway routes. What is new is that recipients are now also asking about transport and logistics possibilities. Besides the Trans-Siberian route Green Integrated Logistics has also made whole train transports between China and Kouvola. The route runs from Tianjin to the Manchuria-Zabaikalski frontier station at the Russian border, where the containers are hoisted onto Russian wagons. From there the train heads for Finland. «The trip takes 18 days. The route is fast but expensive. What raises the price is the fact that there are no special tariffs for the shipments.» Yoo adds that the route has excellent possibilities to develop as an alternative worthy of serious consideration for transport traffic between China, Finland and Russia. Russian companies' willingness to invest in and develop transfer loading and rolling stock equipment is creating additional opportunities.

Faster and cheaper

In recent years Steveco has risen to become one of the largest forwarders of Siberian container traffic. The company manages most of its traffic from Kouvola. According to Sales Director Olli Parikka export volumes have grown steadily, but there could also be room for faster growth. «Currently we are expecting a spurt in the growth of export volumes because large companies have also noticed the product. Until now it's been mainly small and medium-sized companies that have exploited the route's competitive advantages.» Parikka explains that everyone knows about the product's excellent competitiveness, but certain companies shy away from it, perhaps as a result of previous negative experiences. «In terms of their quality and safety, Trans-Siberian container shipments are just as good as other alternatives. Most of the Far East's destinations can be reached more economically by rail than by sea. Railway transport is also to a certain extent faster or significantly faster than sea transport,» Parikka points out.

Whole train to China

The range of transport products traversing the routes has become diversified, even though Korean manufacturers' electronics from China clearly continues to be the most important product category transported on the route. «The number of inquiries, especially concerning routes to China and from China, has increased. Chinese markets are clearly the promise of the future,» Parikka says. Following the pull of the market Steveco initiated test runs of whole trains to China early this year. The train takes 50 containers at a time, usually loaded with industrial products. Parikka believes that in addition to the mechanical forest products industry, the chemical forest products industry will increase its utilisation of rail routes in its own transport operations. Parikka notes that Steveco is striving to expand and diversify its service capabilities in Kouvola. The pressures to add terminal space and construct additional services are considerable. «Kouvola's container terminal area has grown amazingly fast. The City of Kouvola also deserves special praise for the very supportive and prompt way it has reacted to the market's growth and created business opportunities in the area.»

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