Eurasian Rail Alliance sees growing freight volumes from China to Europe

WNM | Jun 14, 2019 at 12:56 AM

MUNICH, June 13 (WNM) - The volume of trade between the EU and the People’s Republic of China is increasing. United Transport and Logistics Company – Eurasian Rail Alliance (UTLC ERA) is expected to benefit from this development. The service provider for the transport of containers, which is owned in equal shares by the Russian, Kazakh and Belarusian state railways, is the first point of contact for the transit of freight through Russia and Central Asia.

As Mr Grom, CEO of UTLC ERA, tells The World News Monitor in an interview, “The People’s Republic of China and countries like Germany on the one hand, and the Russian Federation, Kazakhstan and Belarus on the other hand have different track gauges. This means that when trains cross the border they have to be put onto a different gauge. We take care of goods transport on the Russian, Kazakh and Belarusian broad-gauge tracks. Our market share of freight transport between the EU and China is 76%. And these freight volumes are growing constantly. Whereas we transported approximately 100,000 standard containers in 2016, this number rose to 175,000 in 2017 and to 280,000 in 2018. And the growth curve is still heading upwards. We anticipate that from 2024 we will be transporting around one million standard containers a year.” As an example, China has become Germany’s most important trading partner..

Alexey Grom, the CEO of UTLC ERA, gives a positive outlook for the Eurasian trade relations, of which also his company is expected to benefit. Grom, who graduated from Moscow State University for Railway Technology (MIIT) in 1993 and from Stockholm School of Economics in 2004, has been employed in a variety of transport and logistics companies both in Russia and abroad, and has worked his way up from being an engineer to a director and board member. Since 2018, he has been the President of UTLC ERA.

The goods transported from China to the EU include computers and electrical goods, whilst industrial machinery and cars are transported from the EU to China. As Mr Grom points out, “We have just reached an agreement with one of the largest providers of logistics services in Germany and will be taking on the transport of German luxury cars to China for this provider. We cooperate with other service providers for freight as well, including DB Cargo or the China Railway Container Transport Corporation. Just recently, we concluded agreements at the transport and logistics trade fair in Munich with Interporto Quadrante Europa (Verona) and the port of Rostock. Goods from Italy can now be taken to the port of Rostock and be loaded onto ships there. In the port of Kaliningrad, the containers are then loaded back onto goods trains again. Intermodal transport like this helps us to take the pressure off the often overloaded border crossings between Belarus and Poland.”

Currently, the transit freight volumes transported by rail between Europe and Asia make up only around 2-3% of those transported by ship. But to transport freight by rail can certainly make good economic sense. In order to be able to calculate the costs involved, the Eurasian Rail Alliance has created the ERAI index.

Alexey Grom adds, “What is more, the average time needed to transport goods between the EU and China by rail and vice versa has fallen in recent years to 5.5 days. And in future this figure can fall even further. Belarus, Russia and Kazakhstan benefit as important transit countries. This is a good development for everyone involved.”