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The idea of a new intercontinental transport route joining Asia and Europe has kept politicians and businessman busy since the 1990s. The possibility to deliver a cargo load from Shanghai to Duisburg, let's say, in two weeks without spending hundreds of thousands of euros is a huge factor behind developing economic relationships between the two biggest market participants, China and the EU.
The creation of the New Silk Road also holds significant promise for the countries through which the route passes. It opens new perspectives for the transportation business and encourages further investment in transit services and related sectors.
For insights regarding Russia, the New Silk Road's most important “overland transport bridge,” we talked with AsstrA-Associated Traffic AG experts Andrej Soroka, Shanghai Branch Manager, and Dmitrij Pokhodenko, Trade-Lane Manager for China.
What role does Russia play for the New Silk Road? And what role does it play for Russia?
Dmitrij Pokhodenko:
The route across Russia creates an alternative to the South Stream. It reduces congestion on the route for express trains going via Kazakhstan to China and increases overall capacity on the China-EU route.
For Russia, the advantage is primarily economic. All of the rolling stock is owned by TransContainer, the national car and container operator. The flow of cargo from China brings in regular profits for Russian Railways, and helps the state modernize the railway infrastructure.
Andrej Soroka:
Cargo transportation is a low-cost part of any country's railway activity. Russian owners' cars and containers are actively involved, i.e. they do not stand idle but are able to generate profits.
The development of the Silk Road is a key economic and political initiative to play a key role in transit flows from China to the CIS and Europe and to strengthen Russia's position in the international arena.
What particular steps are being taken in Russia to develop the New Silk Road?
Andrej Soroka:
For the Russian government, it is now important to increase the attractiveness of domestic infrastructure for cargo traffic in competition with the "Silk Wind," a transport route between China and the EU that does not involve Russia as much. To do so, the following steps have recently been taken:
- The construction of a new container terminal at the Zabaikalsk border crossing makes it possible to shorten the transit time significantly with the goal of reaching the planned time of 2 days.
- The central corridor from China to Europe and the CIS through Mongolia has reduced strain on the terminals in Zabaikalsk and Dostyk and has boosted express train freight flows.
- The integration of the Russian "Razvitie" Trans-Eurasian belt programs and the modernization of the Transsiba and Baikal-Amur lines have been executed.
All measures concerning the construction of new terminals, branches, etc. are primarily financed by the state and by Russian Railways, which to some extent forms an oligopoly. As mentioned above, the Silk Road is also a political project, so it is extremely unlikely to involve a large number of players.
What are the obstacles to the development of the New Silk Road in Russia?
Dmitrij Pokhodenko:
The first problem is the inadequate coordination of the Russian and Chinese national railways. To simplify and expedite transportation along the New Silk Road, closer integration of all participants is needed. Currently, customs authorities quite often create delays on the cargo route.
Secondly, it is necessary to modernize railway infrastructure and existing border terminals or build new ones.
Recently, there has also been a shortage of fitting platforms at the Zamyn-Uude border crossing, which is on the central corridor for express trains. As a result, there have been increased delivery times, which are obviously a critical complication for this kind of service.
Andrej Soroka:
The New Silk Road is both an opportunity for Russia to strengthen its position on the international transport market and respond to the strategic threat of China, which constantly seeks to increases its own role.