Rail freight venture to boost trade with Russia

A recently launched Sino-Russian railway container joint venture is expected to significantly boost container trade between both countries, by offering door-to-door delivery of containers using trains and trucks, reported the South China morning Post.

Rail Container, the joint venture between Russian state-controlled TransContainer and China Railway International Multimodal Transport, which comes under the Ministry of Railways, was launched on Monday. TransContainer owns 50 per cent plus one share of the joint venture, while the Chinese partner owns the rest.

On the same day, Russian Prime Minister Vladimir Putin announced plans for a US$14 billion extension of the Trans-Siberian Railway that will increase trade with China, according to Russian media reports.

"This joint venture will be responsible for all transport along the supply chain, offering door-to-door delivery. Customers will put their goods in a Chinese rail car, which will carry the goods to a cross-border terminal. The goods are then transhipped on another train to the Russian customer," said Petr Baskakov, director general of TransContainer, adding that trucks can complete the link between the customer and the local railway station.

The container railway transport volume between China and Russia will grow at 30 per cent per year in the coming years, Baskakov said.

"The container transport volume between China and Russia grew much faster than the overall container throughput growth in Russia. We must be ready to handle increasing transport volumes in future," he added.

Prior to the global financial crisis in late 2008, the annual growth of Russia's total container railway transport was 13 per cent, while that of the container railway volume between China and Russia was 30 per cent, he said.

The railway container trade between the two countries is expected to grow 53 per cent to 231,000 TEUs this year from 150,000 TEUs last year, he added.

Ships account for 40 per cent of the container trade between the two nations.

Around 23 per cent is conducted by shipments from Chinese ports to the Russian Far East port of Vladivostok and subsequently rail transport. The remainder is conducted by railway mostly passing through TransContainer's railway terminal at Zabaikalsk on the Sino-Russian border.

The cost of moving a container from China to Moscow by ship and train is the same as railway, but railway is two and a half times faster, Baskakov said.
(Source:www.cargonewsasia.com)