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ITE Transport and Logistics

Rail freight in Russia: trends & topics for 2017

2017 appears to be heralding a new dawn of growth and expansion for Russian railways. This is signalling greater activity and competitiveness in its rail freight sector. Higher freight volumes, heightened international cooperation, and on-going development are playing their role in getting Russian rail cargo transportation back on track.

Freight volumes increase on Russian railways

Russia’s has a larger total surface area than Pluto, so you can guess why rail freight features highly in the country’s transport and logistics mix. Russia is the second largest railway cargo market in the world and its trade turnovers reflect this.

2016 saw Russian railways enjoy a ton-to-kilometre ratio of 2.34 trillion t/km – a year-on-year increase of 1.6%. 1.22 billion total tons of freight was transported via rail last year, which represents a 0.6% y-o-y rise compared with 2015.

RZD, Russia’s national rail monopoly, also posted some encouraging gains in containerised freight transport in 2016 too. Statistics from the carrier say containerised rail volumes jumped up 10.2%, meaning a record 3.26 million 20-foot equivalent units were carried by RZD last year.

Rising freight volumes suggest that, after a few wilderness years, Russia is firmly at the top of Europe’s rail transport tree. But how about internationally? After all, Russia stretches from the beaches of the Baltic all the way to the Pacific Ocean, making it a substantial international transport and rail hub.

Russia expands international rail presence

A number of extensive international transport routes already pass through Russia, making it an essential connection between Asia and Europe. Historic status aside, Russia is cooperating with countries across the globe in order to boost its importance and attractiveness as a rail market.

$43 billion has been set aside by Russian authorities to help develop a Europe-Asia transport corridor. The main subject of this corridor would be Russia’s Chinese neighbours. As Russia currently represents 15% of total cargo turnover with China and Europe, it is determined to improve its China-facing infrastructure links until 2022 to get more trade.
Reports say this massive investment programme will focus mainly on track upgrades, including work on major routes such as the Baikul-Amur Mainline and the Trans-Siberian Railway.

Its efforts to increase its standing as a crossroads between east and west seems to be paying off for Russia. India sent its first freight train to Moscow, via the newly minted North-South Transport Corridor (NSTC), in August 2016. This journey took just 23 days. Traditionally, Indian cargoes headed to Russia had to be carried by sea via the Suez Canal – a voyage of nearly a month. Trimming transit times often leads to lower costs – meaning the NSTC could raise the Russian rail cargo game considerably.

Further reinforcing its desire to work alongside other countries, Russia has signed some tariff-reducing measures with key partners. Iranian, Azerbaijani and Russian trains will now enjoy a 50% reduction in rates, in order to fully establish the NSCT as a reputable, reliable cargo route.

International freight is integral to the success of Russia’s rail carriers, so these projects, deals and events are important in establishing a favourable environment for foreign operators in Russia.

Further developments shaping the for Russian rail freight sector

Reaching out to neighbouring countries is one way to ensure more cargo travels on a nation’s rail routes, but you cannot overlook the domestic environment. Russia, refusing to be caught out in this way, is steaming ahead with some big internal rail-related developments.
A strategy is in place to greatly develop Russian railways until 2030 – one that involves some major spending. How? Well it calls for the installation of 20,700km of new track, purchasing of  23,000 updated locomotives, and acquisition of 1 million new freight wagons.

More rolling stock means an expanded fleet with which to handle greater volumes of cargo. As such, RZD is planning to buy 437 new locomotives in 2017, while leasing and additional 197 units. 400 new trains will be purchased in 2018, according to an RZD press release, and a further 385 in 2019.

Meet major Russian rail freight figures at TransRussia 2017

With bigger cargo traffic volumes, expanded international cooperation, and more rolling stock on the books, Russia’s rail freight sector is on the cusp of major positive changes. In order to see the market for yourself, and meet the industry figures who matter most, you need to be at TransRussia 2017.

TransRussia 2017, running between 18 – 20 April at Crocus Expo in Moscow, will be attracting major industry figures, including logistics managers, transport supervisors, freight forwarders, and more looking for the latest transportation solutions. Contact us today to learn more about how you can take part at 2017’s event.


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