The rise in sea freight costs is largely due to the acute shortage of containers in China. Beginning in Q4 2020, the number of containerized equipment in China began to sharply decline. According to the Container Availability Index (CAI), container availability (40DC) decreased by 0.65 points from week 39 to week 49 of 2020 and dropped to 0.02, which means there is almost a complete container shortage. Today the situation is getting back to normal. At the same time, the provision of a container in China has risen to $3,000-3,500, which is reflected in the cost of transportation not only by sea but also by rail.
The current situation will not affect the pricing policy within the existing UTLC ERA services in the China-Europe corridor, confirms Alexey Grom, CEO of the company, established on a parity basis by the administrations of the railroads of Kazakhstan, Russia and Belarus:
«We have no plans to increase our rates for at least the next quarter. Maintaining the current stable cost is one of the main competitive advantages of our transit rail corridor for our customers.»
Alexey Grom also notes the need for high speed transportation in order to reduce the overall transit time of the train:
"A freight train can travel more than 1,200 km a day, and the only place where it can stop and lose speed is at border crossings. Together with our shareholders, our main efforts are focused on finding and implementing technological solutions that will reduce that time.
At the end of last year, due to the introduction of stringent epidemiological control measures by the PRC, up to 16,000 loaded wagons piled up at the Dostyk-Alashankou and Altynkol-Khorgos border crossings on the Kazakhstani side and up to 6,000 on the Chinese side.
The previous day a series of talks between representatives of Kazakhstan and China on the functioning of checkpoints on the Kazakh-Chinese border under COVID-19 took place in the format of a video conference.
According to the press service of the Railways of Kazakhstan, following the results of the negotiations, the Chinese side assumed an obligation to increase the reception of freight trains from Kazakhstan: at the Alashankou station — up to 18 trains per day, and from March 1 — up to 20 trains per day, to Khorgos station — up to 8 trains per day, and from March 1 up to 10 trains per day. The parties noted that the transshipment capacity of terminals at Dostyk-Alashankou and Altynkol-Khorgos stations is fully ready to receive and process the planned volume of cargo.
On the same day, in order to solve the joint tasks of digitalization of the transportation process, the heads of Belarusian Railways and Russian Railways signed an agreement on cooperation in the organization of train traffic, the transfer of cars, containers and cargo, the use of railway infrastructure between the transfer stations.
In order to optimize the workload of its junctions, UTLC ERA also plans to develop a unified ecosystem of digital solutions, in particular, the digital transformation of rail transit through the creation of a single blockchain transportation system, a single digital space using end-to-end information technology and the transition to electronic document management.
At the end of 2020 the volume of UTLC ERA traffic exceeded 546 thous. TEU. The company estimates that transportation volumes will increase by at least 10-15% in 2021. According to the results of January of the current year the volume of transit transportations on the services of the company has already made 51.7 thous. TEU, showing growth of 70% by 2020.
For further information, please contact the Communications Department at UTLC ERA at +7 (495) 995-95-91 Teterina Maria, email: m.teterina@utlc.com
