About

Dynamic development of railway transit container transportations across the territory of Russia, Kazakhstan, and Belarus are marked by quick growth of its members’ number, namely consignors, consignees, transport and forwarding companies, who need constant access to recent information about the market. Long-term stable market growth is impossible without increase of its transparence and publicity level.

Today, consignors have access to up-to-date indicators of the delivery cost for containers by sea, hence the decision to put together the Eurasian Rail Alliance Index (ERAI). The ERAI will keep consignors updated on the current rail transit rates.

According to the conceptual design, the ERAI is a composite index of the cost of transit container shipments in the Eurasian rail corridor across the territory of the Eurasian Economic Union between China and the EU. The index value depends on an array of factors. These include the rates charged by Russian Railways, Kazakhstan Railways and Belorussian Railways, the cost of using fitting platforms, the cost of terminal services, speed and time in transit, the infrastructure load status, and others. As a follow-up to the index, a decision was made to introduce sub-indexes reflecting the cost of container shipments from West to East (ERAI U East) and from East to West (ERAI U West).

With these new features launched, consignors tracking the ERAI values on a regular basis will be well-equipped and fit to make informed shipping decisions as well as to calculate the delivery cost for container shipments between Asia and Europe.

Eurasian Rail Alliance Index reflects the indicative weighted average cost of 1 FEU transportation along all routes of PR China - EU Border transport corridor, forwarded by JSC UTLC ERA. The cost of container transporting is diversified depending on both the geography and the direction of the route (Asia-Europe/ Europe-Asia).

Eurasian Rail Alliance Index calculation methodology involves separate calculating of loaded and empty containers transportation cost on each route. The weight of each route is defined as the ratio of loaded/empty containers traffic volume along this route to the total volume of transported containers for the accounting period.

The general formula for calculating ERAI value is as follows:

As additional instruments to ERAI, two sub-indices have been created - ERAI U West and ERAI U East, which reflect the cost of 1 FEU transportation on Asia-Europe or Europe-Asia route respectively.

ERAI as well as the sub-indices (ERAI U West and ERAI U East) constitute the hierarchical system of the Index, which currently has two levels.

Thus, ERAI is a comprehensive composite indicator reflecting the current state of the container railway transportation market and can be applied as an instrument for analytics and marketing research. ERAI U West and ERAI U East sub-indices, in turn, reflect the weighted average transportation cost on the definite routes (Asia-Europe or Europe-Asia) and can be applied in determining the value of contracts for containers transit transportation.

Application

  • A unified indicator of the industry’s condition for all of its participants
  • Indicator used when defining the contract price for transport and logistics services
  • Analytics instrument used for making decisions on freight delivery methods
  • Stock exchange instrument for signing forward contracts

Components used for calculating the value of ERAI

Tariffs on cargo freight across the territory of Kazakhstan, Russia and Belarus
Fitting platform lease/usage cost
Freight train travel time and speed
Market price of freight forwarding, terminal, agency, customs services
Container train load level
Freight balancing level across destinations
Percentage of empty containers in the traffic volume
Cost of cargo escorting and security services
Relation of 20- and 40-foot containers in transit freight

Contacts

Telephone

+7 (495) 995-95-91

Address

107078, Moscow, Sadovaya-Chernogryazskaya str., 8/7

E-mail

index1520@utlc.com