Experiment conducted by Russian Railways JSC impacts the growth of container shipment volume

Experiment conducted by Russian Railways JSC impacts the growth of container shipment volume Simplified shipment request for container shipment implemented by the Center of Company Transportation Services resulted in the increase of container transportation volume in Russia up to unprecedented level

The Russian container shipment market grew by 11% in 2016 versus 2015 and reached a historical maximum of 3.3 million TEU (twenty feet equivalent), as Gudok.ru was informed by the Center of Company Transportation Services, branch of Russian Railways JSC. 

For 2017 the Center of Company Transportation Services forecasts container transportation volume at the level of 3.5 million TEU, by 5.8% higher than in 2016. Should the forecast come true, another historical maximum will be achieved. Center of Company Transportation Services informs that the highest growth is expected in Russian domestic and transit traffic. “In order to attract cargoes for railway transportation in 2017, the receipt of directly shipped containers can be performed without submission and approval of cargo transportation request,” Gudok.ru is told by Leonid Voronin, Deputy General Director for operations.    

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Infographic: Andrey Loktev/Gudok

The previous record of railway container transportation was registered in 2014 when the container shipment volume amounted to 3.2 million TEU. In 2015 for the first time in 5 years the market volume decreased by 8% down to 3 million TEU. To conclude, the market volume in 2016 was exceeded by 1.4% versus 2014.  

The main contributor in the outstanding result were domestic transportation routes. Growth in this segment amounted to 180 thousand TEU or 12% versus 2015. Taking into account the general increase of container transportation volume in 2016 by 302 thousand TEU versus the previous year, the domestic shipment growth amounted to 60%. 

Experts questioned by Gudok.ru believe that this is the result of the measures undertaken by Russian Railways JSC in the scope of their customer orientation program, including the Center of Company Transportation Services experiment in cancellation of GU-12 formal request which resulted in attracting spot clients (those interested in container dispatch on the day of address, including non-working days).      

In 2016 the Vice President of Russian Railways JSC, general director of the Center of Company Transportation Services Salman Babaev took a decision to cancel GU-12 request form for direct container transportation (excluding dock stations). At the outset, the experiment was planned for the period from 1 May to 31 July; eventually the requirement was canceled indefinitely. While in the first six months of the last year the growth of container transportation was registered at a level of 6%, in the second six months after simplification of cargo dispatch procedure the growth amounted to 15%.  

Previously according to the railway regulations the consignor was obliged to provide the forwarder with a request within the period from 10 to 15 days prior to the shipment depending on the type of transport. Currently there is no need to submit the request, the railway bill doesn’t have to be signed, and the cargo doesn’t have to be formally documented for domestic container shipment. The goal of the simplification was to attract cargo flows into railway shipment sector in conditions of competition with alternative types of transport. The new regulations were implemented to accommodate urgent deliveries.  

To resolve simplification matters, a work group had been created from representatives of the Center of Company Transportation Services, Russian Railways holding operators and TransContainer - a major participant of railway container transportation market in Russia. Namely, the scope of the work group activities included meetings with customers.  


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Infographic: Andrey Loktev/Gudok

Based on the results of 2016, TransContainer retained leadership in the Russian market of railway container shipments. It served 47.3% of its total volume. The company’s data shows figures of growth comparable to the market level - 9% (up to 1.5 million TEU). The highest growth was captured in export (by 13%) and domestic (by 10%) shipment segments.  

The experiment of the Center of Company Transportation Services played a significant role in the growth of container transportation volumes within the country, says Dmitriy Chernenok, expert of Analytical Center of the Government of Russian Federation, to Gudok.ru. “This simplified the customers’ access to the services of railway transportation and shortened the shipment decision making period, thereby increasing the competitiveness of railway transport,” he shared.  

The same was emphasized by the leading analytical expert of the Institute of Natural Monopolies Research Sergey Olenin. “Cancellation of GU-12 request in the process of shipment documents preparation helped reduce the shipment periods of container cargoes and attracted new customers to the railway,” he told Gudok.ru. He also mentioned that there were other “local changes in norms and regulations” facilitating the market growth.  

Chernenok, in his turn, added that certain customs procedures were also simplified. For instance, at Zabaykalsk station a system of preliminary e-declaration was introduced, helping reduce the time of containers delivery from China. “Border crossing period in the area had been reduced to the realistic minimum, i.e. from 2 days to 2-3 hours,” the expert said.  

Sergey Olenin also highlighted that Russian Railways JSC continues to develop the container shipment market. He reminded that in 2016 Russian Railways-Logistics OJSC (subsidiary Russian Railways JSC) organized pilot dispatches within the scope of express container services from China to Russia and transit to the European countries. 

Besides, the expert linked the general market growth to the fact that containers now accommodate the types of cargoes which traditionally were transported otherwise - i.e. bulk chemical and oil cargoes. Thus the containerization had increased.  

A similar opinion was shared with Gudok.ru by a member of subcommittee for logistics of the committee of Chamber of industry and commerce of the Russian Federation for transportation and freight forwarding Ludmila Simonova. She also said that Russian Railways JSC played a favorable part in the market development, inter alia by way of implementing projects aimed at improvement of container transportation timing. In the meantime, she pointed out that the export segment growth in 2016 was related to macroeconomic reasons, including ruble strengthening, therefore the ability of the sector to withstand international competition depends on the industrial development in general. The expert even admits to the possibility that the export rates will go down in the short term. 

Dmitriy Chernenok assumes that the container shipment growth in Russia may soon be facing infrastructural constraints. “The poorly developed network of terminal logistic centers will not have the capability to handle the increased turnover time of the containers,” the expert remarked. 

In the opinion of Sergey Olenin, the container shipment development first of all improves the export, import and transit potential of the country in major sectors of industry. The favorable effects of containerization growth have been also noticeable, as he says, in the renovation and development of infrastructure - terminals, stations and tracks. 



photo: Russian Railways Media Office
Nikolay Loginov, Gudok.ru

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