Rail Logistics in a New Age: Realities, Challenges, and Opportunities

12 September 2023

Rail Logistics in a New Age: Realities, Challenges, and Opportunities

KEY CONCLUSIONS

Russia is increasing rail transport capacity each year

“We are annually increasing [transportation] volumes […] No matter how much we build, we understand that this provides more opportunities for the economy. There will be more and more cargo. We are really counting on that. This year, over the first eight months, our growth has already amounted to more than 8%. The transportation of container cargo is growing splendidly at more than 20%. I can say that the export of import containers from Far East ports is also showing a solid good increase of 37% compared with last year,” Deputy General Director and Head of the Corporate Transport Service Centre of Russian Railways Alexey Shilo said.

“Today, it is about 20% more profitable to transport coal than containers […] Shipping coal from Kuzbass is more marginal for Russian Railways than containers […] To date, over eight months [since the start of 2023], 71,000 railcars have been loaded with containers. This means that about 7 million tonnes were transported [...] The main thing is to conserve the transport capacity of the Eastern railway domain,” UgolTrans General Director Khasyan Zyabirov said.

PROBLEMS

Russia’s port capacity exceeds the capabilities of railway access roads

“Our port capacity in the Russian Federation is three times greater than that of railway access roads. When I see new agreements to build new ports, I wonder if the people with whom the agreement was signed invested money [in building port infrastructure] five years ago […] In the Primorsky Territory, excess port capacity would cause a problem,” Aide to the President of the Russian Federation and Secretary of the State Council of the Russian Federation Igor Levitin said.

“Our entire infrastructure is ports and [a transport and logistics centre] that are directly connected with the railway. We have questions about future work. In our region, the ports now have excess production capacity and are underutilized […] By 2030, the ports will double cargo turnover, and this is in no way synchronized with the railway’s transport capacity,” Deputy Chairman of the Primorsky Territory Government Valeriy Prokopchuk said.

“Today, [the situation] with capacity is very difficult, and it isn’t likely to get any better in the near future because the cargo base is larger than transport capabilities. We must and will make more logical schemes,” FinInvest General Director Alexander Kakhidze said.

SOLUTIONS

Modernize infrastructure and develop heavy-haul rail transport

“Today, it costs RUB 30 billion to add 1 million tonnes at the Eastern railway domain. [The Baikal-Amur Mainline–3] will cost approximately RUB 50 billion per 1 million tonnes. We need to reach Kazakhstan, Central Asia, the Persian Gulf, Mongolia, and China, i.e., we need to do the opposite... heavy-haul transport,” Levitin said.

“We are actively working with our Chinese partners […] Perhaps we should adopt their experience with heavy transport. The weight and cargo capacity of one train is 20,000 tonnes or more […] When we are talking about the industrial use of 20,000-30,000 tonnes, this is already serious. This requires renovating and rethinking not only cars and locomotive traction, but also the infrastructure itself,” En+ Group Operations Director Mikhail Khardikov said.

“Of course, today, empty fitting platforms should not be going to the Far East under any pretext. We must maximize the use of gondola cars. On 29 September last year, we sent the first container train from the Far East in gondola cars to the Apparatnaya station in the Sverdlovsk Region […] More than a thousand such shipments have already been made, which has resulted in savings of more than 7 million tonnes that were additionally transported as exports to the Far East,” Kakhidze said.

“Investors’ risks need to be reduced […] On average, the establishment of an industrial park [requires investments] starting from RUB 1.5 billion, while a transport and logistics centre of at least 200 hectares [costs] more than [RUB] 10 billion. Business counts its money. Certain additional support measures are needed to make it profitable for businesses to create such platforms [...] In the Omsk Region, in an effort to reduce risks, we will create a special port economic zone,” said Andrey Shpilenko, Deputy Chairman of the Government of the Omsk Region, representative of the Omsk Region under the Government of the Russian Federation.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.

Rail Logistics in a New Age: Realities, Challenges, and Opportunities

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