Issue 2001/5

In the Market of Transport Services

Liubov Shcherbinina

A healthy pragmatism

Not long ago Russian transit via the Baltic ports used to bring approximately 600 million US dollars to Lithuania, Latvia and Estonia. In the course of the last two years this income reduced considerably. Russia began investing more money into its own ports and transporting cargo via them. Politicians and economists are arguing if it is good or bad, if it useful or unprofitable for Russia, and some think that the arrogance, which only harms the common wealth, is guilty. The constructive dialogue and mutual understanding are much more useful. This view dominated at the 29th meeting of the Railway Board of CIS countries, three Baltic States and Bulgaria. The meeting was held at the end of June in the port city of Klaipeda. Speaking about its results in the press conference, Chairman of the Board Authority Anatoliy Sidenko said that the unification of post-Soviet space railway departments in one common structure had been induced by a healthy pragmatism. “Locomotives and wagons in our countries are the same as well as rails along which they cross our frontiers. It means that our problems are the same”, said A.Sidenko. As far back as March of 1993 the heads of the governments signed an Agreement for a common use of wagons and containers possessed by ex-Soviet states. This year the Board has tried to improve the transportation system, to increase the efficiency of railway activities, to use the rolling stock better. The figures indicating that more and more freight is transported make us satisfied. In the course of five months of this year, compared with the same period of the last year, there was 3.6 per cent more freight transported by railways of post-Soviet States, and 16.9 per cent more - in containers. The freight transportation has grown on the railways of Russia, Ukraine, Kazakhstan, Azerbaijan, Uzbekistan, Turkmenistan and Lithuania.
Railway administrations are better supplied with wagons, their demands for empty clean wagons for freight forwarding are also satisfied better. Although it is not so fashionable now, a reliable principle of assistance still works. For instance, in the course of five months 55 thousand tank-cars from Russian and Ukrainian railways were forwarded to Kazakhstan, approximately 23 thousand semi-wagons from the Ukraine to Russian railways. Latvian railways received 2.8 thousand wagons for grain transportation from Russian and Belarus railways, and Lithuanian railways received even bigger quantity of such wagons - 3.7 thousand.
Wagons crossed state frontiers almost without any hindrances. The number of conventional insurance documents was rather reduced. The number of trains hold ups on Russian, Ukrainian, Latvian and Estonian railways also reduced. These facts show how effective are common activities of the railway companies of CIS countries, the Baltic States and Bulgaria controlled by the Board. Just to be objective it should be said that at the meetings of the Board there were a lot of arguments and hot discussions. It is not easy to co-ordinate railway activities under the conditions of competitive, unstable market and political changes. Besides, there are still many faults on the railways connecting CIS, Baltic, Asian and West European countries.

Nickolay Aksenenko: transport policy is coordinated
up to the year of 2010

In his interview to the Sea the Minister of the Communications of the Russian Federation, head of the Board Nickolay Aksenenko said: “The most important problems we have already solved are connected to the transition to new technologies. The participants of the meeting unanimously approved the automatic identification system of rolling stock and large tonnage containers on the basis of Palm system. It is recommended to be introduced in all CIS countries, Latvian, Lithuanian and Estonian state railways. It will give new possibilities to improve the performance of the railway transport, to increase its efficiency, to perfect the stock taking methods, to reduce the red tape. The Board was submitted the conceptual draft of the railway transport policy coordinated by CIS countries up to the year of 2010. Besides, the timetable of train traffic as well as the plan of wagon and container flows on international routes for the period of 2001-2002 was approved. All these measures will allow us to understand better each other about technological and economical issues.

Striving for European standards

The implementation of the identification system will request quite big investments from every country - member of the Board. But it is hardly possible nowadays to meet European standards without this system. The participants of the meeting asked why partners of Lithuania did not use reserve opportunities of the railway bridge Mukran (Germany) - Klaipeda, though it is the shortest route from West Europe to the East. Is it because they are not satisfied with the prognosis of politicians, or with the tariff system and the technical state of the roads or is it numerous formalities that discourage clients from the West to use this route? The partners themselves - railway companies working in a common technological space, but having separate financial budgets, need an operative and accurate computerized calculation. The hottest discussions at the meeting of the Board flared up when talking about inter-payments. Russia possesses the largest stock of containers and delivered the biggest quantity of them to its partners. But consequently it suffered the biggest losses. As the Minister of Transport of Russia Nickolay Aksenenko told the Sea it was an internal affair and by no means it had to be discussed at the Board. Such issues are settled at the International Court of Arbitrage. However, it is better to settle them by your own efforts than to look for perpetrators.

The dialogue of neighbours

A forwarder or a mirage?

Sergey Barbaric
Head of Rolling Stock Unit of the Ministry of Transport of Russia,
Member of the Board of the Ministry of Transport of Russia

The most important feature of      all meetings of the Board is      that they follow one principle – to make a common decision acceptable to the majority. We make decisions in the nature of a compromise not according to the position of one or a few states but to common interests of our whole union. Saving a general technological entity of railways, it is important to develop the processes of integration and work out new documentation, which will meet the level of up-to-date science and technology. That is done taking into account general international standards and international experience.
The Russian delegation presented its suggestions and modifications for most issues. Some of them were taken into consideration, others need some time to be prepared. So far, only the problem of forwarding services has been discussed, which really exists. There are forwarding companies that are not known in the railway sector. They are beginners who have just recently entered the transit business. Such businessmen appear in the service market, but they have neither experience nor money. The forwarder’s account might contain a thousand dollars, but he forwards the freight the cost of which is ten times higher.
If freight transportation is not paid, the wagons will be hold up on the frontier. Who will be responsible for such a case? Therefore it is necessary to name the forwarders. The name of a good forwarder is known in the international market, and there cannot be any place for crooks. We do not seek to reduce the number of forwarders, but just try to establish an elementary order. Wagons must not stand idle due to forwarders’ incompetence or incapability, as this decreases the efficiency of the international transportation.
A new approach to the rolling stock maintenance is worth mentioning. Earlier the wagons were repaired once a year. But let’s compare it with the way we treat our own cars: we go to the technical service centres whenever it is necessary. The same criteria must be applied for the rolling stock. In the whole world wagons are repaired when they need to. At present, the railways of CIS-countries, Latvia, Lithuania and Estonia will introduce a more effective system of rolling stock maintenance, according to the actual time of service and run.

Svetlana Losmakova
Deputy Chief of Belorus Railway Statistics Service

At the 29th meeting of the Board, to ensure the accuracy of inter-payments the railway administrations were recommended to control effectively the accuracy of the information about the transfer of containers at the interstate points and about the transfer of cargo to the sea and river transport. The working groups of the Board are charged in the third quarter of 2001 to prepare methodical instructions for automatic recording and correction of the data bank of containers, to work out the precise stock taking methods of own containers and the rented ones. The containers stock taking system has been in work for a long time. But in the summer of this year, the payment for the usage of containers was introduced. What is the aim of this innovation? If every railway administration pays for the time a container is used or kept, it will considerably intensify the traffic of container stock within the common railway net. The payment is settled in a single currency (Swiss franks), what recently has been experimentally tested and led to reasonable sums and charges. Thus, railway companies seem to induce themselves to work with freight forwarders more efficiently, to increase competitive ability of railways and their attractiveness for transit freight.
A greater effect is expected from the automatic identification system of the rolling stock and large containers. The system is extremely expensive. With the system installed every country will have to bear its own expenses according to the size of its territory and its rolling stock. The system ensures a very clear picture on the railways and a hundred-per-cent identification and recording of wagons and containers. Before, this operation used to be performed by people, who manually registered the numbers of the stock and then delivered the information to the automatic data system. Certainly, a lot of mistakes occurred and some confusion was inevitable. Now special sensors and automatic machinery will register the stock.
This is another huge step towards European standards.

The barrier not lifted yet

For cargo transportation two types of rol     ling stock are used: rolling stock registe     red to railways and a private stock of shippers and forwarders. The point is that wagons of the former type are returned to the country of registration free of charge. However, the return of wagons of the latter type, i.e. of private companies, is chargeable to the owners. At the meetings of the Board the delegation of Uzbekistan more than once made a suggestion to remove the discrimination and create equal conditions both for the state and private sectors. Under the present circumstances, cargo forwarders are not interested in having their own rolling stock. But with the development of science and technology there is a growing demand for transportation of special types of cargo, such as poisonous and chemical goods. There is no sense for railway administrations to purchase wagons that can be used only for very specific types of cargo. As for shippers and forwarders, keeping private rolling stock might be considered a pretty penny for them due to the discriminatory conditions mentioned above. Then, where can the wagons be obtained in case of necessity?
We offer to eliminate the disparity and to lift the barrier for the private sector. And as owners of the rolling stock will still apply to railway administrations for their wagons’ repairs, reduction of the wagon return rates can be repaid with interest. It is especially alluring for Uzbekistan where the export exceeds the import, and loading is the prevailing operation on the railways. Our motion was considered at the 29th meeting of the Board, but we shall insist on putting it into practice.