Heading East: Eurasian rail freight opportunities. Tom Zunder: NewRail Freight & Logistics: Research Group Manager Arnaud Burgess: Panteia
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1 Heading East: Eurasian rail freight opportunities Tom Zunder: NewRail Freight & Logistics: Research Group Manager Arnaud Burgess: Panteia
2 Broader perspective ON connection to China Substantial trade relations between China and EU Logistics development of Southern and Eastern Europe Improvement of transport infrastructure in the Central Asia, Russia and Eastern Europe countries Maritime transport growth limitations Upcoming industrial development in West China provinces Necessity to have alternative rail land bridge from European Union to China 2
3 Background As Europe, Russia, China and India are the main economic powers responsible for major goods exchanges within the Eurasian Continent, their desire is to have the most direct trade routes with one another. Almost all (99%) goods between the EU and the Asian Pacific region are shipped by sea. Land corridors through Central Asia are starting to be used more and more frequently, In order to further reanimate the land corridors and give a boost to their development, several initiatives and projects have been undertaken in the last years by major financial institutions, international organizations and national governments. The most important are CAREC, TRACECA, NELTI initiatives and the dedicated initiatives within UNECE, which create a framework of strategies for technical and financial coordination and development of land corridors, transport infrastructure and trade in the Eurasian region.
4 Experiences of block train runs between Europe and China (1) Currently a number of private operators offer the services for the container transport by rail from Europe to China: The Trans Eurasia Express is a service that was founded in 2008 and is operated by TEL Trans Eurasian Logistics, a joint venture between DB AG and the Russian Railways (RZD). Its further partners are TransContainer, Polzug and Kombiverkehr IRS InterRail Services GmbH is responsible for the development and the operation of the Ostwind container block train,
5 Experiences of the block train runs between Europe and China (2) Kaztransservice, in cooperation with Belarusia s official transport and logistics company Belintertrans- Transport-Logistic-Centre, are responsible for the operation of the Kazakhstan Vector The railways of Mongolia (Tuushin), the Russian railways (Rubikon) and the Belarusian railway (Belintertrans) are operating the Mongolian Vector train on the route Brest - Naushki - Ulaanbaator
6 Experiences of the block train runs between Europe and China (2) Main connection hubs to RETRACK : Duisburg Budapest Bucharest Bratislava Destination in China : Lanzhou Beijing 6
7 Routes to China via Transsib Assessment of three rail routes: 1) Transsib PRC via Zabaikalsk (reference case): Moscow Yekaterinburg Novossibirsk Irkutsk Ulan-Ude Zabaykalsk Manzhouli Beijin Lanzhou (10782 km) 2) Trannsib PRC via Kazakhstan: Moscow Yekaterinburg Kurgan Petropavlovsk Astana Mointy Aktogay Dostyk Urumqi Lanzhou (6718 km) 3) Transsib PRC via Mongolia: Moscow Yekaterinburg Novossibirsk Irkutsk Ulan-Ude Naushki Zamyn Uud Jining Beijin (8756 km) 7
8 Assessment of TransSiberian routes Supply chain requirements of the corridor - Shipment compatibility Common technological base of the infrastructure and train operation standards. Different development of signaling systems (Mongolia EU ERTMS) - Lead time and prices Route Lead time (days)* Change of gauge Duisburg - Transsib - Zabaikalsk - Beijing 16.5 RF - PRC 1 Duisburg - Transsib - Mongolia - Beijing 17 MON - PRC 2 Duisburg -Transsib - Kazakhstan - Beijing 22 KAZ - PRC 2 Border crossing Prices ($)* * Consultant assessment
9 Major barriers Strong control of the RZD over Russian rail market (e.g. monopolistic pricing, existence of preference schemes, indirect operational discrimination) High price and frequent tariff fluctuations Limited availability of platform wagons in Russia Shortage of handling capacities at the gauge change stations Lack of punctuality and dwell times
10 Summarizing TransSiberian routes High potential technical capabilities Continous infrastructure improvements on the corridor Time advantage high value cargo Alternative solution for heavy loads or dangerous goods
11 Routes to China via TRACECA Assessment of two rail routes: 1) TRACECA PRC via Turkmenbashi Poti Boyuk Kasik Baku Turkmenbashi Chardzou Khodza Davlet Tashkent Arys Almaty Dostyk - Urumqi Lanzhou (4006 Km) 2) TRACECA PRC via Actau: Poti Boyuk Kasik Baku Aktau Kandagash Arys Almaty Dostyk - Urumqi Lanzhou (4619. Km) 11
12 Assessment of TRACECA routes Supply chain requirements of the corridor - Shipment compatibility Common technological base of the infrastructure and train operation standards. Different development of electrification systems (e.g. Georgia - Azerbaijan) - Lead time and prices Route Lead time (days)* Change of gauge Border crossing Poti Turkmenbashi Dostyk 12.6 KAZ-PRC 5 Poti Actau Dostyk 11 KAZ-PRC 3 Prices ($)* * Consultant assessment
13 Major barriers Ferry transport on Caspian sea (monopoly of CASPAR, lack of capacity Actau, no coordination of railway wagon supply between ports) Multiple border crossings (not-unified admistrative procedures, time loss, lack of transparency, not harmonized customs procedures) The corridor is not always safe High and not transparent costs Unreliable travelling time
14 Routes to China via Kazakhstan Assessment of one rail route: Proposed Central Kazakhstan corridor Aksaralskaya Kandagash Arys Almaty Dostyk (3896 Km) 14
15 Forecast of the volumes and structure of the freight flows between EU and Kazakhstan for the period before 2030 In the direction of EU: 2008: 32.7 mln t 2015: 37.0 mln t 2020: 38.6 mln t 2030: 47.1 mln t Fuels and solid metals Agriculture products Metals and metal products Petrol and petroleum products Other In the direction of Kazakhstan: 2008: 1.1 mln t 2015: 3.3 mln t 2020: 5.4 mln t 2030: 7.9 mln t Construction materials Metals and metal products Food and animal feed Industrial machinery and transport vehicles Chemical products Other Source: Alexeev A. Transport infrastructure, priority projects. Presentation on 6th session of UNECE Group of experts on EATL II, Almaty, Kazakhstan.
16 Assessment of Central Kazakhstan route Currently not operational for international traffic, only for regional and bilateral transport. Offers alternative to existing Transsib and TRACECA corridors with shorter connection between Western China and Eastern Europe (in comparison to TRanssib) and less border crossing problems (in comparison to TRACECA). Fully operational infrastructure wise, 20% electrified, 54% double track On-going railway infrastructure improvement projects (electrification and modernization of railway lines as well as construction of the new railway lines) will further shorten travelling distance and time along Kazakhstan Customs Union RF Kazakhstan offers additional possibilities
17 Comparing routes
18 Competing routes for the corridor West Europe-Inland China OD: Urumqi-Berlin Trans Siberia Via Manzhhouli - Moscow All Water Via - Lianyungan - Rotterdam Transsib via Kazachstan TRACECA Via Dostyk - Aktau - Baku - Poti Travelling (km) distance 13,982 24,660 7,773 14,385 Transport costs (US $/ Container) 3,903 2,559 6,773 No. of custom and transshipment points 3/2 1/2 4/2 4/6
19 Estimated Volumes Summary of estimated 2010 rail corridor and maritime volumes between EU 27 and China under assumption of rail corridor competition To Europe To China TransSib directly to China corridor, tonne 669, ,845 TransSib - Kazakh corridor, tonne 747, ,866 TRACECA corridor, tonne 57,545 38,066 Central corridor, tonne 128,844 77,868 Maritime corridor, tonne 45,859,526 29,537,987
20 Assessment for 2020 Opportunities for the rail landbridge between EU and China Competion and non-competition cases Share of each corridor in the total transport volume between EU- 27 and China, in both directions Corridor Scenario / year TSR Transsib Kazakhstan TRACECA Central no competition 9,24% 7,42% 1,89% 5,74% competition 7,89% 5,86% 1,25% 4,30%
21 Conclusions In 2010 Transsiberian and Transsib Kazakhstan railroutes are the most attractive options In reality all transports go via Transsiberian corridor In 2020 Central Kazakhstan corridor becomes a good transport option, therefore further development of the corridor is essential
22 Thank you Questions? Tom Zunder May RETRACK WP13 22
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