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What are the potential trade flows from the Old Continent to China? Are there any ways to reduce the delivery time on this route? These issues concern logistics providers on both sides of the New Silk Road. Answers were sought on November 19, 2019 in Warsaw at the United Transport and Logistics Company – Eurasian Rail Alliance (UTLC ERA) conference called “Europe – China: Sustainable Connectivity.” Have any answers been found?
Experts from the AsstrA-Associated Traffic AG international corporate group share that the meeting mainly concerned container transportation and optimization issues along the CIS-China route. It was about UTLC’s neutrality when organizing transport, improving the quality of transportation, and optimizing the associated costs. A lot of attention was paid to the issue of alternative routes bypassing the Brest-Terespol crossing.
“An integral component of successful transportation on this route is communication between the customs authorities of the PRC, Eurasian Customs Union countries, and EU countries. The introduction of electronic document management in the future will reduce the transportation time by 36 hours,” says Grzegorz Zdybel, Trade Lane Manager at AsstrA.
“It is worth noting that the Polish Railways (Polskie Linie Kolejowe or PKP) are planning to expand the Terespol station by 10 broad-gauge 1520 mm railway lines. The infrastructure will be adapted to service heavy trains with lengths up to 1050 m and loads of 25 tons per axle. There will be a separate track for parking damaged wagons with dangerous goods,” continues Grzegorz Zdybel.
“The initiative will be implemented from 2022-2024. This will increase the strategic importance of the Malaszewicze facility and our local AsstrA office there on the map of the railway connection between China and Europe. Additionally, a project to build eight crossings will be implemented. The purpose is to improve the quality of cross-border traffic services.”
With access to tracks of 1,520 mm and 1,435 mm, the value of the transshipment terminals will increase along with transshipment capabilities. According to Grzegorz Zdybel, companies that invest in infrastructure can expect increased competition. This will result in better quality of rail services from China.
“The idea will develop if the European and CIS stretches of the route involve about the same level transportation costs. The entire industry is waiting for lower rates, bearing in mind that subsidies from the Chinese government will end sooner or later,” comments Grzegorz Zdybel.
Ewa Trochimiuk, Head of the EU Rail Freight Division at AsstrA-Associated Traffic AG, draws attention to a special system for sealing goods in containers. This method, new in the Eastern market, was discussed at the conference.
“Alexey Grom, CEO of UTLC ERA, said that in the near future the sealing system will be implemented in containers that will transit from the EU to China and other Asian countries. This will allow the transportation of Russia-embargoed goods that so far have not been deliverable by rail. Examples include agri-food products and European food products which are gaining interest in China.
“Speakers from different countries were concerned about the future of railway market. The main concern is what will happen when the Chinese government cuts subsidies for rail transport. This concern is easy to understand, because current rail rates look so attractive thanks to government subsidies,” says Ewa Trochimiuk.
Vladislav Martin, AsstrA China Division Specialist, considered participation in the conference constructive and informative.
“The meeting was interesting. We received a lot of information regarding the further development of Malaszewice and Terespol. According to statistics, over 10 years, the speed of delivery of containers from China to Europe has increased. Previously, shipments lasting a month were considered record- breakingly fast. Today, delivery in two weeks (from station to station) no longer surprises anyone. In recent years, we have seen a decline in prices for rail transportation with a systematic increase in the volume of transported goods. The Europe-China railway link continues to develop,” summarizes Vladislav Martin.