SOME ASPECTS OF INCREASING THE COMPETITIVENESS OF CONTAINER SERVICE VIA THE TRANS-SIBERIAN RAILWAY

Dmitrii S. Kopyev

Admiral Nevelskoy Maritime State University, Vladivostok

Abstract: The decrease in freight traffic has toughened the requirements for the speed and cost of delivery of goods. This led to the manifestation of the attention of transport operators to the use of the Trans-Siberian Railway for the delivery of goods from East Asia to Europe. But high rates on the sea ‘leg’ of the container delivery route reduce the attractiveness of this transport service. A well-grounded reduction in rates will attract additional freight traffic to the route.

Keywords:  Trans-Siberian railway, transportation costs, container delivery time, formation of transportation rates.         

The slowdown in economic growth in the leading economies of the world caused by the COVID-19 pandemic has significantly affected the work of operators of intermodal and multimodal transportation. The decrease in freight traffic has increased the requirements for the speed of delivery of goods and the cost of delivery. This led to the emergence of new delivery routes, the expansion of transport hubs and the emergence of new transport corridors.

The lack of forecasts concerning the end of the pandemic provides an opportunity for emerging alternative delivery systems to gain a foothold in the transportation market and, with an increase in industrial production, become permanent routes. One of such projects may be the growth of container service along the Trans-Siberian Railway (TSR).

The interest of shippers in transcontinental land transportation is caused by the increase in the cost of shipping goods by sea due to the drop in freight traffic, the desire to increase the turnover of funds in conditions of limited consumption. An important role is played by the prospect of a further drop in tariffs for railway transportation in the direction of Southeast Asia – Europe in connection with the completion of work on the construction of the ‘New Silk Road’ transport corridors.     

 TSR, connected with major seaports in the Primorsky Territory of Russia, is an already operating cargo delivery system. If some of the requirements of the shippers are fulfilled, TSR becomes attractive for use at present as well as in the future, especially for Japanese and South Korean shippers. The latter are reluctant to actively use the ‘New Silk Road’ for various reasons, including political ones. Moreover, the government of the Russian Federation intends to invest in the development of the Trans-Siberian and Baikal-Amur railways which will increase the carrying capacity of these railroads to 180 million tons per year by 2024. The government’s actions are aimed at increasing the export of fossil fuel through the Far Eastern ports, but this also opens up an opportunity for an increase in the return flow of containerized cargo.

 The undoubted advantage of using the routes Southeast Asia – ports of Primorsky Territory – Trans-Siberian Railway – Europe is the speed of container delivery. The travel time of containers sent from Busan to Malaszewicz station (Poland) via the port of Vladivostok, dispatched in December, was 19 days which is twice as fast as delivery by sea. Moreover, most of the route runs through the territory of one country – the Russian Federation.

Significant reduction in transportation costs for shippers was another advantage of using the Trans-Siberian Railway. Delivery of a 40-foot container from Japan to Europe by sea costs from 5500 to 10,000 US dollars. Delivery via the TSR will cost 4500 US dollars [1]. At the same time, the tariffs of PJSC “Russian Railways” are valid for 6-12 months, while freight rates for sea transportation depend on market conditions and may change more often.

Currently, only the Russian company FESCO uses the TSR for the transportation of containers from Southeast Asia to Europe. But large South Korean and Japanese operators are showing interest in resuming transit through the Trans-Siberian Railway on a systematic basis.

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