The Russia route on New Silk Road is gaining ground again
There is still demand for rail transport via Russia. For example, Rail Bridge Cargo recently began offering transportation via Russia on the route between China and Europe; also for goods other than humanitarian products, food and medicine, the company said.
Simone van der Lee
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Rail Bridge Cargo, which specializes in transportation between China and Europe, decided in early March to suspend train traffic through Russia as long as the war against Ukraine continued. The only exceptions at the time were humanitarian goods, food and medicine. The company said it “can not look away” from what happened in Ukraine. The company has now decided to reopen the route for companies that “have no other options.” For other companies, the focus remains on the more southern central corridor, which does not run through Russia, according to the logistics service provider.
“The parties see no other option due to the sharp increase in transit times in maritime transport,” said Igor Tambaca, CEO of Rail Bridge Cargo. ‘Handling in Rotterdam and Hamburg takes too long. And due to the Covid situation in China, many factories have been closed and production has only recently started up again. It is sometimes seen that companies have already sold products, but that the freight still has to come from China. Those parties simply want their cargo to get out of China as soon as possible. ‘
“It takes sixty to fifty-five days to get freight to Europe by sea, while on New Silk Road via Russia it takes sixteen to eighteen days,” Tambaca said. ‘And the transit time on our southern routes is now thirty to thirty-five days, but it may increase because right now there is such a race on those routes and the strong increase can not always be coped with.’
Since Rail Bridge Cargo has restarted the route via Russia, the logistics service provider has transported approximately 40% of the volume transported via the route before the start of the war. Tambaca: ‘Right now the transit time is low, making it an attractive option for some parties. On the other hand, there are definitely customers who are unsure about using the route. When it comes to high value products, one can see that the route is less attractive. ‘
Onno de Jong from the analysis agency Ecorys does not yet see a serious revival of the Russian railway route. “If you look at the figures until the end of April, you only see sharp declines in the amount of goods transported on the route via Russia. With the exception of LCL shipments (Less than Container Load, ed.). For such minor burdens, there may be less damage to reputation. Larger sections are not yet visible on the route. The transmitters do not want it. If you look at technological goods, you certainly see that the parties do not want to run the risk of goods being classified as ‘dual-use goods’. As sanctions have become stricter, this situation has only gotten worse. I do not expect that to change in the near future. ‘
Rail Bridge Cargo emphasizes that it will continue to encourage companies to choose the routes on the Central Corridor. “We will focus on expanding the new routes and finding new opportunities. We see a lot of opportunities for that, “says the company.
Tambaca estimates that the central corridor could take over 60 to 65% of the capacity of the northern route in one year. ‘We expect it to be a fixed route. One can see that people are currently investing massively in new ferries in the Caspian Sea and the Black Sea. And Turkey is also investing heavily in the route between Baku and Istanbul. ‘
In three months, the company has created four new routes. ‘In addition to the port of Constanta, we also have an opportunity to go via the port of Varna. It is a major port and the situation in Ukraine is not affected there. It is also possible to drive from Baku in Azerbaijan to Duisburg by truck. It saves customers time. We have also recently established a local team in the ports of Aktau in Kazakhstan and in the port of Baku. They make sure that our containers are picked out immediately and put on the boat or train. Where the containers used to stand there for about twelve to fifteen days, it has now dropped to about two days. ‘