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Ode to the Chinese container

What prospects for the transit of goods are open before the Far East?

Currently, containerized cargo from China to Europe is mainly sent by sea routes bypassing Russia. According to the results of 2016, the freight traffic in this kind of communication amounted to 20 million TEU (containers in 20-foot equivalent), and the transportation services market reached approximately $ 20 billion. Land routes, in turn, choose only 2% of shippers - for rail transport along the route China - Europe through the Russian Federation had 155 thousand TEU. But this is also an achievement in some way - four years ago this indicator was almost 8 times smaller.

Ode to the Chinese container
In 2013, the Chinese leadership embarked on the "One Belt, One Way" initiative. At the same time, through Russia, 20 thousand TEU were sent to European countries. As the managing director of the Chinese transport and logistics company SWIFT Transportation Group noted, if in 2013 one train was sent to Europe per month, now every week about six trains deliver consumer goods to European cities.

Participants in foreign economic activity from Russia and China predict that by 2025 to 15-20% of cargo traffic will move from the sea bypass (deep-sea) to the Trans-Siberian Railway. One of the advantages of the railway route is the speed of delivery: 15-20 days against 40-45 - by deep-sea. To make this method of delivery competitive, it is also necessary to revise the tariff policy by offering flexible conditions to shippers, simplifying customs procedures for transit, providing information support along the entire way of passing the cargo.

Currently, the routes under the One-Belt, One Way initiative are represented by three options: the western one through the northwestern provinces of China, Kazakhstan, Russia, the central one through Mongolia and Russia plus the east-north-east of China and the Russian ports of the Far East.
According to Deputy General Manager of Zhengzhou International Hub Development and Construction Co. Guangxheng Li, each direction has its own prospects, they all develop, and time will tell which one will be the most convenient. "In any case, they can already compete with delivery by sea and air. If the sea way they lose at a cost, then in comparison with the air it is only 20%. At the same time, rail transportation does not depend on weather conditions and natural disasters, while typhoons are a deterrent to sea transport, "stressed Guangxhen Li.

The topic of attracting transit through Russian territory was given considerable attention to the fields of the Third Eastern Economic Forum. In particular, the Chinese guests suggested that Russia more actively use the potential of the Suifenhe-Grodekovo border crossing. Recently, this road and railway checkpoint has received serious development, especially from the Chinese side. In particular, the annual capacity of the terminal in Suifenhe grew from 50 thousand to 300 thousand TEU. The total capacity of the contiguous side increased from 13 million to 38,5 million tons per year.

From the second half of 2016, transit container shipments within the framework of the Primorye-1 international transport corridor (ITC) began to be performed on a regular basis. As is known, it gives shippers from the northeastern provinces of China the possibility of shortest export of goods to the south of the PRC or to other Asian countries through the ports of Vladivostok and Vostochny. A similar scheme can work in the opposite direction.

In the current year, transit traffic along the MTC "Primorje-1" gained momentum. For eight months, along the transport corridor, 48 trains with 5,4 thousand TEU traversed. This is one and a half times more than the total volume of container traffic for 2015-2016 years.

The increase in Chinese transit is shown in the seaside ports. According to Alexander Dudko, Managing Director of East Stevedoring Company, according to the results of 2016, the company shipped about 250-300 TEU within the framework of the Primorie-1 MTC. "Today 350-500 TEU is our monthly cargo base on this transport corridor," says the head of the VSK. "We are ready for a more explosive growth in volumes."

As representatives of the Chinese side said, a number of measures were taken to optimize the transportation process. For example, the loading of containers in Suifenhe is now carried out directly on the Russian track (the border stations have the tracks of the combined track 1520 / 1435 mm). This allowed to get rid of the congestion at Grodekovo station. And the time of container transshipment in Suifenhe decreased to 4 hours.

According to Petra Silin, the head of the branch of PJSC TransContainer in the Far Eastern Railway, the clients of the Primor'e-1 MTC enjoy special conditions: firstly, transportation by the transit corridor is subsidized by the Chinese authorities; secondly, last year, RZD provided the 50- percentage discount for train routing of container shipments.
Maritime communications are also developing. As one positive moment, noted Alexander Dudko, is the opening this year of a direct shipping line between the East and Chinese ports of Taichang. The time of delivery along the sea route does not exceed four days.

In general, it is possible to provide trans-border shipments from Vladivostok and Vostochny towards almost 50 ports of various countries of the world and 15 of the Chinese port cities.   

Jinju Wang from SWIFT Transportation Group proposes to use the Suifenhe-Grodekovo transition and to provide transcontinental transit Asia-Europe more widely. According to him, a large volume of foreign trade cargo is coming from China through the checkpoint of Manchuria - Zabaikalsk, but "it is overflowing to the eyeballs." In this issue, the manager believes, it is necessary to raise the international status of the Suifenhe-Grodekovo transition. And preferences could become an additional advantage for the shippers of China, which make a choice in favor of overland transit of cargo to Europe.

There are a number of questions, Jinyu Wang continues, which need to be solved by the Russian side. In particular, the tariffs for shipping through various checkpoints - to the address of East, Vladivostok, Zabaikalsk - are different. They need to unify. “Tariffs should have an advantage. So far, the attractiveness of the MTC “Primorye-1” is not so, although the corridor can play a significant role in foreign trade, ”the managing director of the SWIFT Transportation Group believes. 

FESCO’s president of the FESCO transport group, Aleksandrs Isurins, suggests focusing on tariff policy flexibility. “Private business responds quickly to this. When the Panama Canal began to accept large transport ships, it reduced the tariffs for returning the volumes of traffic to the Suez Canal for such ships, which made it possible to return some customers. We have now a mechanism for providing special conditions is rather complicated, but this tool must be used, ”Aleksandrs Isurins is convinced.

Jin Wang also called for improving the efficiency of the customs authorities. However, his Russian colleagues talk about simplifying administrative formalities while ensuring transit. As the director of JSC Russian Railways for commercial activities, the head of the Center for Corporate Transport Services, Alexei Shilo, the authorities now agree on a technology for the movement of goods, which will allow performing control customs operations only in the departure areas (that is, seaports), excluding them from carrying out railway transitions, and will provide a significant reduction in the total time for the transport of transit cargo. "We discussed this technology with Yuri Petrovich Trutnev. And after it is fully implemented, we believe it will give impetus to the further development of transit transport, "Alexey Shilo is convinced.

Also, he added, the full implementation of the transit potential of ITC will also be promoted by the introduction of electronic data interchange with China Railways, which will allow digitization of customs procedures at checkpoints on the Russian-Chinese border.
According to Aleksandrs Isurins, private business – state structures –RZD is capable of attracting transit to Transsib. “The dialogue with Russian Railways is under way, the speed of implementation of joint decisions is increasing,” the head of FESCO notes. At the same time, he added, the business itself should interact with government agencies and come up with initiatives that can make transportation more convenient for all participants in the process.
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