In 2022, the global economy faced a lot of obstacles and adverse impacts, however, some causes for optimism emerged in the final quarter.
The global supply chains were very unstable against the acute geopolitical situation and physical shortages of various feedstock types and components. The energy market volatility and the rampant inflation impeded the global economic growth. Most regions strengthened their monetary policies, thus causing additional pressure on production and consumption. In China, new COVID outbreaks were detected almost throughout the year followed by strict anti-virus measures.
However, some positive developments became apparent at the end of the year. For instance, in December the Chinese Government decided to drop the “zero COVID tolerance” practices. This may become a critical driver for global economic growth in 2023, because China is not only the largest producer and exporter of various commodities, but also a major consumer. Release of the savings accumulated by Chinese households during the pandemic may boost the demand for various products, including those produced in Europe. Hence, the economic growth in Europe and many other countries will be directly linked to the events in China.
In early 2022, the Chinese economy was on its way to achieving its growth target at 5.5%, but the local COVID outbursts along with the stringent COVID control policy significantly limited its prospects. As a result, the Chinese GNP in 2022 ended out to be at its lowest point since mid-1970.
Decrease in demand for real estate in China at the end of 2022
of the national GNP
The share of the real estate sector
Throughout 2022, other challenges were also apparent in China’s economic landscape. For instance, the turbulence in the real estate sector remained unsolved. The Chinese Government took action to support real estate developers, one of the key solutions being to alleviate the funding and credit limitations. However, some developers still face significant financial challenges. The Chinese Government will probably have to approve new actions to support the sector despite denying the criticality of this situation. The collapse of the Chinese developers may trigger a full-blown global economic crisis, thus it is vital to further address this issue.
The key event in late 2022 was the cancellation of the “zero COVID tolerance” policy, which simultaneously created the short-term challenges for the economy and enabled an optimistic outlook for 2023. The Chinese Government is expected to approve the minimum GNP growth target at 4.7%.
Key Forecasts for China
Reduction of unemployment
The unemployment rates correlated with the COVID outbursts during the year. This rate is predicted to reduce significantly in 2023 (down to 5.2%) due to China’s recovery after the pandemic.
Urban Population Unemployment Rate, 2020 to 2022 (%)
The retail trade volumes are expected to grow approximately by 2.5 to 3% in 2023 after their reduction by 0.2% in 2022. The COVID outbursts influenced the consumption in the final quarter of 2022, but their impact was not as strong as at the initial stage of the pandemic.
Year-to-Year Retail Trade Volume Profile, 2020 to 2022 (%)
Rapid recovery starting from the second quarter
In the first quarter of 2023, the national economy will be adversely affected by COVID. Most of China’s population is reported to be previously infected by January, hence any repeated strong outbursts are less likely during the year. As a result, economic activity and consumption may rapidly recover starting from the second quarter triggered by the potential improvement of the epidemiological situation, release of excess savings in the household sector, and the government’s incentives.
China will significantly increase its export volumes in 2023
This is what many experts believe, though the Government repeatedly emphasized that the key priority is to promote the domestic demand. This may also be linked to the relatively weak state of the global economy and the growing geopolitical tension.
Improved production rates
In 2023, the rates are expected to improve to approximately 4.5% on a year-to-year basis. For reference: The production rates grew by 3.6% as of the end of 2022. The chemical industry (+12.8%) and the mechanical engineering industry (+10.8%) performed better than the other sectors.
Industrial Production Rate Profile, 2020 to 2022 (%)
As of the end of 2022, the EU GNP grew by 3.6% while the GNP in the euro area increased by 3.5%.
The region was subject to strong pressure following the materialization of the geopolitical risks in the first quarter. The volatility intensified in the supply chains while the physical availability of certain goods produced in Russia and Ukraine was jeopardized. The logistics chains started to disrupt along with the complications occurring in the customs processes and monetary transactions.
The prices for energy sources and other feedstock types skyrocketed, leading to the rampant inflation almost all over the world and the high probability of the “stagflation” risk in Europe. These events collectively contributed to the introduction of a more stringent monetary policy by the European Central Bank and the increase in the capital value along with the weakening consumer demand in the region. However, some economic challenges were successfully resolved during the year, which influenced the GNP growth in 2022.
EU and Euro Area Quarterly GNP Growth Profile, 2020 to 2022
The euro area is predicted to show the positive GNP trend, but the trade (specifically the import) and the demand for transportation services to and from the region will most probably remain low. The European retailers have accumulated vast volumes of products still to be sold. The demand might recover in the third quarter of 2023, but there are strongly pronounced risks and limitations. For instance, the prospects of the European economy and trade will largely depend on China’s recovery from COVID.
Annual Euro Area GNP Incremental Growth, 2022 to 2023
As the key European economy and a major consumer of Russian energy commodities, Germany was largely affected by the growing gas and oil prices. Its GNP growth rate slowed down from 2.1% in 2021 to 1.9% in 2022, while the forecasts for 2023 predicted the recession by 0.4%. However, experts later started to believe that the country might avoid recession altogether. The German Government expects the GNP growth by 0.2% in 2023 and by 1.8% in 2024. The current mild winter, large gas inventories, business and community support packages will help the economy to grow
Further inflation cooldown
In 2021, the inflation in the euro area grew at a stable rate, while at the end of October 2022 the inflation rate peaked at 10.6%, which is exponentially higher than the target established by the European Central Bank. Nevertheless, the rate decreased in December, and the downward trend will most likely continue. The action taken by the European Central Bank facilitates the inflation cooldown: the key rate in January is as high as 2.5%, and the next increase by 50 b. p. is expected in March 2023. The rapid decline in energy prices in the fourth quarter also significantly contributed to alleviating the inflation pressure.
Annual Inflation Fluctuation Profile in Euro Area, 2020 to 2022
The unemployment level in the euro area stabilized at 6.6% in December 2022 (with 7% in December 2021). According to the various forecasts, the unemployment may amount to 7% as of the end of 2023. The action taken by the European Central Bank may adversely affect the employment levels, since the long-term tightening of the monetary policy typically results in lower employment rates.
European consumers cut down their costs during 2022 due to the growing inflation and the introduction of a more stringent monetary policy in the region. However, the positive forecasts regarding the GNP growth in the euro area in 2023 are partially based on the potential consumer appetite improvement. The retail trade volumes are expected to gradually increase in the coming year. This will probably solve the current issue related to the record-high product inventories to be sold by retailers, which were worth as much as 91.2 billion euros as of the third quarter of 2022.
Order backlog will support production volumes
The production volumes in 2022 varied over the range similar to the previous year. Some industries, e.g. the chemical industry, were adversely affected by high energy prices to an extreme degree, which forced Europe to import specific chemical commodities to meet the demand. As mentioned above, the new order volumes for production enterprises decrease at a stable rate, but the significant order backlog will help maintain the production volumes in the next months.
Retail Trade Volume Profile, 2020 to 2022
Year-to-Year Industrial Production Profile, 2020 to 2022
Mutual Trade between China and Europe
The bilateral trade between China and Europe is a major segment of the global trade and the central axis of Trans-Eurasian traffic.
The trade profile between the partners shapes the cargo base of the Eurasian rail transit route and the cargo traffic flow balance
,
billion euros
Total trade volume between the partners for the major commodities in 2022
up to 624.3
billion euros
Growth in export from China to Europe in 2022
,
up to 227.6
billion euros
growth in export from the Europe to China in 2022
The rapid growth in the Chinese export occurred due to the increasing volumes of dispatched organic and other chemicals, various electric devices and household goods. The trade volume growth was also caused by the fact that the supply chains returned to normal. Nevertheless, the decreasing natural trade volume is notable: the total volume reduced by 3.7%, the export from Europe decreased by 25.6%, however, the export from China grew by 13.9%.
Significantly, Europe’s deficit growth trend in its trade with China has been apparent since 2019 and the corresponding curve is constantly steepening. For instance, the available data show that China’s export exceeded its import by almost 2.5 times in 2022. The cargo flow balance deterioration creates inevitable challenges for the transportation industry in terms of seeking and struggling to secure cargoes for return shipments
China’s and Europe’s Mutual Trade, 2021 to 2022 (billion euros)
According to the latest forecast by S&P Global, the global trade growth will slow down to 0.6% in 2023 due to multiple limitations and risks.
In its turn, China may increase its export volumes by potentially revitalizing its economy upon removal of the anti-COVID restrictions. Nevertheless, the export to Europe is unlikely to grow due to the extremely strong recent trend and the increasing imbalance of trade flows. On the contrary, Europe’s export to China may increase due to the recovering demand among the Chinese population
European companies set their hopes on the Chinese market in 2023. Importantly, the international trade depends on the relations between partners. In their turn, European politicians consider introducing a new strategy regarding China, which will be aimed at reducing their dependence on this country. The respective political risks may influence the trade between the partners.
Logistics industry trends: Time for alternative options
Denis
Korobov
Head of Customer Services Section, Customer Relations Department, Commercial Directorate
Sea Container Traffic Market
The global container trade volume in physical terms reduced by 3.6% in 2022.
According to Journal of Commerce (JOC) and Container Trade Statistics (CTS), the traffic volumes on the China – North Europe route plummeted even more during 11 months of 2022 (approximately by 10 to 11%).
,
million TEUs
Global sea container trade volume in 2022
Global Sea Transport Trade Volume, 2021 to 2022 (million TEUs)
The sea freight rates reached the record high values in late 2021 with their subsequent adjustment starting from 2022 against the declining demand, the price competition between carriers for traffic volumes and certain improvements in operation of key ports in Asia and Europe.
Thus, as of December 2022, the composite WCI was adjusted by 79.6% against the peak value in 2021 and amounted to $2,120/FEU. Specific trades demonstrated a similar trend, with the Shanghai–Rotterdam rate decreasing by 88.5% against its maximum values and reaching $1,706/FEU. The rate for the reversed Rotterdam–Shanghai route was adjusted by 54.8% down to $789/FEU.
The WCI sea freight rates and the railway rates measured by ERAI should be additionally benchmarked. Specifically, the review of the rates by routes shows that the market is back to its pre-pandemic state.
Benchmarked WCI and ERAI Rates by Routes, 2020 to 2022
The Chinese and European economic growth prospects have significantly improved as of late, enabling the carriers to make more optimistic predictions for 2023.
+7–11%
Expected net capacity growth in 2023
Specifically, in its press release in December, Maersk predicted the decline in demand throughout 2023 due to a relatively weak state of the global economy and the significant inventories still to be sold by retailers. Yet, in its January publication, the company stated that there were causes for optimism and predicted a significant growth in trade and demand starting from the second half of the year against the cancellation of strong anti-COVID restrictions by China. However, the potential for excessive market capacities is still high.
The current supply and demand predictions show that the “buyer’s market” is the most probable option in 2023. Nevertheless, sea carriers may take action to strengthen the supply controls and to boost the rate growth. According to Drewry, the cost effectiveness of the Asia – North Europe services has already decreased almost to zero, thus the companies will have to leverage all available tools to avoid financial loss.
Apart from the standard voyage cancellation tool, carriers may improve the traffic economics by adopting the “slow streaming” practice (i.e. intentionally slowing down the vessel speed in order to cut the costs by reducing fuel consumption and CO2 emissions) and re-routing the vessels via the Cape of Good Hope (to avoid the fees to cross the Suez Canal and to partially withdraw the supply from the market by extending the time in transit by 10 to 12 days). The efficiency of the actions taken by carriers will definitely depend on multiple fundamental drivers affecting the industry. The rapid swings in demand, port congestion, natural disasters and many more reasons may significantly change the market situation.
Air Freight Market
Last year, the air services were extremely attractive. One of the main drivers was their cost: the sea freight rates grew so much that cargo owners preferred to switch to air transportation. However, the trend changed as the sea freight market stabilized, which affected the cargo volumes transported by air carriers.
Reduction in global air freight volumes in 2022
The declining global economic indicators, growing energy prices and rampant inflation also contributed to the adverse impact. As expected, Europe demonstrated the weakest profile among all regions.
The traffic volumes for all major international trades also demonstrated stable decline over the recent months. The volume profile in the Asia–Europe trade started to reduce drastically in the second half of 2022, with the year-to-year indicator reaching approximately 23 to 24% in November.
Air Freight Volume Profile in Asia, Europe and Globally, year-to-year changes in %
The supply level in the air freight market is currently lower as compared to the pre-COVID level, but sufficient in view of the relatively weak demand.
Backlog in traffic capacities of European carriers in 2022 as compared to 2019
As opposed to sea carriers, airlines efficiently controlled the supply levels in 2022 and succeeded in preventing rapid rate decline. However, the profiles were significantly affected by the traffic direction. Specifically, in the last week of December, the average rate for the China–Europe route was $4.43/kg, which is 44% lower than in the previous year, but approximately 50% higher than in 2020. The Europe–China rate was $2.80/kg, which is 12% higher on a year-on-year basis and approximately 90% higher than the similar rate in 2020.
In 2023, the market supply may potentially grow due to recovery of international tourism in the countries previously affected by strict anti-COVID measures. In early January, carriers already ramped up their traffic capacities in the China route trades by 10%.
The future rate profile will largely depend on the consumer demand in Europe and the COVID situation in China.
Traffic Rates for China–Europe and Europe–China Routes ($/kg)
According to the market players, the air freight demand will most probably remain low in the next months, but will grow to a certain extent starting from the first half of 2023.
The cautious optimism is mainly related to the expected economic boom in China. Nevertheless, the future prospects are highly uncertain, at least due to the significant inventory still to be sold by retailers in Europe and also due to the growing competition from sea services. If the port operations and delivery schedules continue to improve, this may lead to even more intensive cargo outflow to sea carriers. The time in transit is also worth taking into account. Given the current significant inventories accumulated in Europe, retailers do not need to immediately replenish their stocks, thus the speed, which is the key benefit of air transportation, is not particularly sought after.
In its turn, the air service rate reduction may change the situation. The supply level is most likely to recover further, which along with the weak expectations regarding the traffic volume growth may cause the rates to reduce in the next quarters. Hence, the air freight rates are likely to become more competitive as compared to the railway rates for the given period.
China–Europe–China Rail Transit Market
As of the end of 2022, the total volume of rail transit container traffic in the China – Europe – China directions on the main East – West International Transport Corridor routes has declined, while UTLC ERA’s market position has significantly strengthened.
Aidar
Kadyrov
Lead Manager of Logistics Department, Commercial Directorate
Traffic Profile Showing Major Corridor Shares, 2022
Company’s percentage in 2022 on competitive East–West International Transport Corridor routes
In 2022, 410,638 TEUs were transported in UTLC ERA’s container services on the transit route via Dostyk and Altynkol border crossings (-34.6% on a year-on-year basis). In turn, 276,472 TEUs were transported in the China–Europe direction and 134,166 TEUs were transported in the Europe–China direction (i.e. the volumes declined by 33.9% and 36%, respectively).
China–Europe–China Transit Volume in UTLC ERA Services, 2021 to 2022 (TEU)
The downward trend in the transit traffic volumes, including UTLC ERA’s services, is affected by various external influences:
COVID outbursts in China throughout the year caused limitations or shutdowns at national production facilities and key transportation hubs. COVID also adversely affected the internal consumption and import demand. In 2022, the retail trade volume in China reduced by 0.2%.
High energy prices and a spike in inflation in Europe weakened the production, consumption and export volumes in the region. In 2022, EU’s total export to China in physical terms reduced by 25.6%. The export by key rail traffic cargo ranges (TN VED 85, 84, 87, 99, 39, 94, 73, 48, 40, 38) in physical terms has reduced by 21.8%.
The unsold inventory levels in Europe have reached 91.2 billion euros as of the end of the third quarter of 2022 (the average level over the last 10 years was approximately 23 to 25 billion euros). As mentioned above, this eliminates the need for retailers to promptly replenish their stocks, thus the traffic speed is not critical. This causes the demand outflow from the “fast” modalities (air and rail transportation).
Increased sea transport attractiveness due to freight rates returning to normal. As of the end of the fourth quarter, the sea freight rates finally settled at the level below railway rates. As of the end of December 2022, the Shanghai–Rotterdam WCI rate reduced by 88.5% as compared to the peak rates in 2021 and reached $1,706/FEU. The rate for the reversed Rotterdam–Shanghai route was adjusted by 54.8% down to $789/FEU.
Unwillingness of European cargo owners to transport their cargoes via Russia due to the conflict in Ukraine. Starting from March 2022, the cargo flows started to switch to the competitive modalities or routes outside of Russia. For instance, they switched to the Trans-Caspian International Transport Route (TITR), where 33,000 TEUs were transported in 2022, which is 33% more than in the previous year (8,000 TEUs).
Reduced number of subsidies allocated by the Chinese Government to support the rail import to Europe, along with the decreasing sea freight rates, has caused the rail container transit market to become even less attractive.
Nevertheless, the demand for transit container traffic via Russia remained high.
Specifically, UTLC ERA’s transit traffic services featured 28 new routes, out of which 10 are in the Europe – China direction and 18 are in the China–Europe direction. Four new cargo origination and absorption points were added to the map of new locations for 2022: Taulov (Denmark), Kotka (Finland), Shangrao and Dulaying (China).
The changes in the external environment forced the participants in the foreign economic activities to significantly revise their processes in 2022. This caused changes in logistics chains, which affected re-allocation of shares in UTLC ERA’s total volume.
Specifically, the import service volumes grew significantly, which helped partially level out the transit cargo flow reduction. The company’s services were used to transport 148,560 TEUs on the China–Russia route in 2022. Therefore, this segment grew by 771% as compared to 2021. In April 2022, our company accepted its first payment in yuans for one of such traffic operations. As of the end of the year, 12 contracts were concluded with customers that envisage payments in yuans, and 31 trains were dispatched under these contracts.
The company has arranged import traffic on the total of 194 new routes. We have added 14 new cargo absorption points in the Russian Federation: Silikatnaya, Koltsovo, Anisovka, Kostarikha, Chernyakhovsk, Avtovo, Nizhnekamsk, Rostov Tovarny, Chernikovka, Luzhskaya, Tikhonovo, Inya Vostochnaya, Bazayikha and Bronka, as well as 12 new origination points for import cargoes: Haiphong (Vietnam), Gaoyi, Shijiazhuang, Wendeng, Luzhou, Linyi, Minhang, Guangyuan, Nansha, Tuanjiecun, Zaojiaopu, Shihezi (China). The traffic volumes for another import segment for UTLC ERA, namely the China – Republic of Belarus traffic, reached 14,098 TEUs in 2022 (i.e. the annual growth of 536%).
China–Russia Import Container Traffic Volume in UTLC ERA’s Services, TEUs and number of import routes, 2021 to 2022
The Growth in export volumes by traffic types in 2022 is also notable.
In particular, the traffic volume under the project for potassium chloride transportation from the Republic of Belarus to China launched in 2022 was equal to 52,284 TEUs. The total traffic volume in UTLC ERA’s export services was 107,901 TEUs, which exceeds the last year’s volume by 137%.
Export Container Traffic Volume on the Russian Federation, Republic of Belarus–China Route in UTLC ERA’s Services, 2022, TEUs
Flexibility Evidenced by Adaptation
In 2022, the conditions for Eurasian rail container traffic operations changed in a drastic manner.
The deteriorating international political situation that affected the countries participating in the traffic operations was the main driver behind most changes in the established trade relations. However, the market adaptation to the current realities is obvious, taking into account the multi-fold growth in UTLC ERA’s volumes in many directions. This confirmed the inherent flexibility of rail container traffic. Taking into account the temporary decline in demand from the European side, introduction of new import and export routes and maintaining the high service quality on the main transit route have contributed to positive performance shown by the Eurasian rail container traffic during a challenging year. Moreover, we succeeded in maintaining the traffic volumes at the record high level achieved in 2021.
In 2023, the specified political and market drivers will continue to affect the industry, and the challenging geopolitical situation will remain the main obstacle for successful operations on the China–Europe–China route. However, a number of opportunities will also arise. For instance, the cancellation of the “zero COVID tolerance” policy in China can revitalize the national production and export volumes, as well as the consumer demand, which will boost the import volumes. The intention of Chinese manufacturers to increase the electric car export volumes in the western direction, as well as the continuing growth in e-commerce cargo dispatch rates can also bring new volumes into the traffic industry. Accordingly, it is crucial to embrace the emerging opportunities and to further improve the service quality to ensure successful future development.
Conclusions
As of the end of 2022, the global economic growth rates can be said to slow down, but a number of positive events enables a more optimistic forecast for 2023 in terms of global economy and international trade development.
Meanwhile, the sea transportation has regained its status as the most “cost effective” means of delivery. The sea freight market stabilization has definitely affected the air freight carriers, who report an active cargo outflow towards sea services. This has likely affected the China–Europe–China rail traffic as well, along with other factors. These are primarily the deteriorating geopolitical situation and the overall weakness of the European and Chinese economies.
Nevertheless, the Eurasian rail services kept improving and adapting to the global changes. New customers joined the Eurasian traffic, and the new segments demonstrated high performance, which helped maintain the record high traffic volumes achieved in 2021. In 2023, the industry will face a multitude of challenges, but the market still offers a lot of opportunities. Similarly to 2022, the main area is still the development of new operating points and the service portfolio diversification, which will help level out the decline in specific segments. Finally, the further qualitative development in the industry is equally important. The critical future growth drivers may be the improved process digitalization and business transparency along with the loyalty of all stakeholders to rail transportation.
Technological Leadership Strategy
Maria
Orlova
Lead System Analyst of Information System Support Section
UTLC ERA’s mission
is to develop the EAEU transit potential by implementing high-tech logistics services that require an aligned policy to be adopted by railways and regulatory authorities in the 1,520 mm track gauge regions.
The strategic goal for 2025
is to expand the cargo base and to develop the market of transit traffic via UTLC ERA’s corridors in view of market and regulatory risks.
Principal Stakeholders
Shareholders, who affect UTLC ERA’s business by making key decisions and shaping the competitive service by means of tariff policy approval
1
Key customers, who generate UTLC ERA’s revenue and ensure its growth by introducing the new cargo base, as well as affect the financial performance by leveraging the procurement volume and working capital level
2
Owners of key container terminals on UTLC ERA’s routes, who maintain the process chain to transfer containers from the 1,520 to 1,435 track gauge system
3
Chinese railway administration and regional logistics platforms, who ensure acceptable tariffs for container delivery from Central China to the Kazakhstan border and allocate temporary subsidies for rail container traffic within China
4
Consignors, who are interested in shorter cargo delivery times
5
Rolling stock owners, who allocate fitting platforms to UTLC ERA
6
Fitting platform manufacturers and leasing companies
7
Financial institutions
8
Basic Strategic Principles
UTLC ERA is an integrator of high-tech transit container traffic on the Asia–Europe–Asia route. The company’s main goal is to expand the cargo base for transit traffic.
The operating model is aimed at increasing the transit traffic volumes in the 1,520 track gauge regions, including the following actions:
Minimizing the costs and creating a competitive quotation
Balancing the transit routes
Increasing the delivery speed
Launching new logistics services
Customizing transit services for new consignor groups
UTLC ERA provides for full utilization of the available throughput capacities and the best traffic parameters due to its technological and price advantage. We offer services based on an open tariff policy for all customers, ensure a non-discriminatory approach and transparent service.
UTLC ERA provides a platform for stakeholders to jointly develop technologies, primarily the digital ones.
Key Strategy Implementation Mechanisms
Creating a contract base to secure the necessary quantity of rail cars, terminals and other transport service components
1
Establishing a digital technology testing ground based on UTLC ERA’s facilities
2
Introducing a special regulatory treatment (by testing regulatory changes up to adjustment of the national laws in the Alliance member states) to enable the cargo base expansion and traffic net cost reduction
3
Ensuring active promotion in the global transportation and logistics market to improve loyalty
4
“High-Tech Integrator” Format
The previous year of 2022 called for new solutions, including transit traffic digitalization. UTLC ERA’s cooperative resource (subsidiaries and affiliates of three railway administrations) has created the opportunities for end-to-end process digitalization in three countries. The testing of their operation has solidified UTLC ERA’s status as the “regulatory testing ground”.
The digital technologies have become a key competitive advantage for logistics companies. Under the project implemented by the Eurasian Economic Commission to create an information and communication “showcase” for the national services of the EAEU digital traffic corridor ecosystem. On November 17, 2022, UTLC ERA and Republican Unitary Enterprise “Digital Development Center” (a subordinate enterprise for information project development and implementation under the Ministry of Communications and Informatization of the Republic of Belarus) signed a cooperation agreement. It envisages cooperation in multiple areas: e. g. sharing information while testing the transfer of container traffic data and electronic shipping documents for international rail freight traffic on the East–West–East route.
Partnership Networks
The realignment of logistics links and the increasing demand for rail transportation (including container traffic) to China caused an urgent need to maintain the balance between the interests of cargo owners, infrastructure owners and rolling stock operators. In this regard, ensuring the appropriate infrastructure level has become a top priority for rail transportation development.
Under the Treaty on the Eurasian Economic Union dated May 29, 2014, Kazakhstan, Russia and Belarus pursue a coordinated transport policy, one of its tasks being to increase the transit potential efficiency of the member states.
This is why a crucial component of UTLC ERA’s development strategy is the establishment of a core terminal and logistics hub network to consolidate the cargo flow via Belarus, Kazakhstan and Russia.
The transport corridors in Central Asia currently demonstrate a stable growth trend in terms of cargo traffic volumes and mutual trade between our countries as well as with China and European countries.
In this context, establishment of a core terminal and logistics hub network is an essential task. Specifically, in 2022 our company joined the task force established by JSC “NC “KTZ” and JSCo "RZD" under the Bakhty Railroad Crossing Project.
The outcome of the cooperation in 2022 is as follows:
Development of the Dostyk TransTerminal (Dostyk Railway Station) and Yuzhnouralsky Dry Dock (Formachyovo Railway Station) projects by improving the passing, pool train operation and off-site terminal operation procedures to increase the throughput capacity of main border crossings.
Forming mono-trains to reduce the time in transit and accelerate the train passing at the boundary of the 1,520 and 1,435 mm track gauge systems.
