InterRail Newsflash November 2018
InterRail Uzbekistan expands product portfolio
Located on the Old Silk Road, Uzbekistan, with a population of about 33 million the most populous country of Central Asia, not only has numerous historical sights, the country also offers big economic potential and boasts economic growth that has been stable for years already. The reforms initiated in late 2016, among them the de-bureaucratization of foreign trade, free development possibilities for entrepreneurs, support for private ownership and an improved legal framework for business activities, encourage venturing into new business areas.
The InterRail Uzbekistan team also benefits from this economic climate to continually expand its service portfolio. Apart from the successful container block train connections, InterRail now also offers tank wagon transports within Central Asia, a new service that the partnership with the local Classic Group has made possible. For the transport of oil products, private tank containers have been leased on a long-term basis. The first order, a shipment of 10,000 tons of bitumen from Turkmenistan to Uzbekistan, is being handled before year’s end.
In other respects, too, InterRail Uzbekistan sees good business development – the container train service ex Vostochny, Russia, to Uzbekistan may serve as an example here. The regular service, launched in March in cooperation with InterRail Russia, registers growing demand; a third block train was added, which increased the departure frequency to every ten days.
Another success for team InterRail Uzbekistan: their contract with the German-Uzbek Joint Venture «JV MAN Auto-Uzbekistan» LLC, which manufactures modern state-of-the-art MAN utility vehicles. Cooperation has started already: so far, over 50 containers with parts have been transported from India to the MAN plant in Samarkand. This thanks to the very successful teamwork with InterRail India without whom InterRail Uzbekistan would not be able to run this business so smoothly. By year’s end, the number of containers handled is to reach 100.
InterRail with new branch office in New Delhi, India
In August, InterRail India inaugurated a branch office in New Delhi. Branch manager is Puja Dang. InterRail has been operating in India since 2010; the first three years via a delegation office, which was then turned into an independent, operative country unit. Thus, India has long been an important and future-oriented market for InterRail. The country, which belongs to the BRIC states, is among the fastest growing markets worldwide and an important trade partner for Russia and other CIS states. India is moreover an important hub for goods flows via China and Russian and North European ports.
“India and the CIS nations are countries with well-developed rail freight markets. Customers with transports in both directions turn to rail freight much more naturally than here in Europe. Thus, we had both geographical as well as strategic reasons to expand our network by adding another location in India, as this enables us also to strengthen our position in our other core markets”, explains Hans Reinhard, President of the Board of InterRail Holding AG.
“In the capital, all the major decisions concerning rail transport are made. Important industrial sites have developed over the past years on the outskirts of Delhi, too. Moreover, we have been cooperating for some time already with one of the leading forwarders in Delhi, a subsidiary of the second biggest forwarder for diplomatic relocations in Germany. Their team has over 25 years of experience in this field. With our own office in Delhi, we can benefit even more from the expertise of our cooperation partner and further expand our sales activities in the region”, says Vijay Narayan, Managing Director of InterRail India Pvt. Ltd.
With three offices – in Ahmedabad, New Delhi, and Mumbai – InterRail is geographically very well positioned along the new freight corridor the Indian government has planned; the corridor connects Nava Sheva (Mumbai) and New Delhi.
Two new employees in Kazakhstan
InterRail Kazakhstan has taken on a new sales manager: Bekzat Madiyarova started working on October 22. Her tasks include customer acquisition, the support of key accounts as well as joint sales activities with other InterRail subsidiaries; this is also aimed at intensifying the networking within the InterRail Group.
InterRail Kazakhstan LLP
Astana-Karaganda Str. 45
office 2a, 1st floor
010000 Astana, Kazakhstan
Mobile: +7 701 031 7255
The second new member on the team is Azamat Suleimenov, Chief Delegate at our partner KTZ Express in Astana. He succeeds Alen Jangozin, who is studying abroad at this time. In his function as Chief Delegate, Azamat Suleimenov cooperates closely with our KTZE contact persons on joint projects. He is in charge of assuring smooth communication between InterRail and KTZE, and of further developing the cooperation and generating new business. Here’s how to reach Azamat Suleimenov: via mobile phone at +7 700 7000 171, via email at azamat.suleimenovinterrailag.
ELP event highlights the potential of the Eurasian land bridge
At the fourth European Logistics Platform (ELP) event of the year 2018 in Brussels, on November 21, around 40 EU policymakers and industry stakeholders met to listen to experiences from companies that make use of the EurAsian landbridge and to discuss the opportunities they see in making even more use of the connections between Europe and Asia.
The event was hosted by Wim van de Camp, Member of the European Parliament and active in the TRAN (Transport & Tourism) Committee. He welcomed the participants to the debate, mentioning that as a member of the China delegation of the European Parliament he has a great interest in the Chinese Belt & Road project.
InterRail Europe was also invited to speak at this event. Hendrik Wehlen, General Manager Sales and Operations, gave the perspective of the intermodal operator, providing a lot of insight in the practical issues InterRail is facing, such as the need to analyse developments of the landbridge, including commodities, types of shippers, service risks in terms of infrastructure, service quality, pricing and the eventual elimination of government subsidies. (source: www.european-logistics-platform.eu / photo: ELP – Alexander Louvet)
Market study “Logistic services for the New silk Road”
InterRail and sister company M&M commissioned students of the St. Gallen University of Applied Sciences and of Shanghai University to do a market analysis on “Logistics Services for the New Silk Road”. The project team collected significant data on the most promising investment regions along six BRI corridors, and on the repartition of the BRI projects.
With the BRI (Belt and Road Initiative) project, also called the New Silk Road, the Chinese government invests large sums in the development and expansion of inter-continental trade and infrastructure networks between Europe, Asia and Africa.
At this time, the total investment volume is estimated to amount to about 1.1 trillion USD. For trade along the New Silk Road, this means one thing most specifically: growth. And the logistics sector can benefit from this growth, too. For one, logistics companies can be involved in infrastructure projects by transporting machinery or components. And then, after infrastructure has been modernized, they’ll profit from the rise in transport volumes.
The market study’s central result: The Middle East is the region with the highest investments – 43 percent are invested here via BRI in the development of infrastructure. 23 percent are invested in South East Asia and 12 percent in Russia. Most projects, 59 percent, are geared to develop traffic infrastructure. Energy infrastructure is second at 17 percent. These two sectors are also receiving the highest investment volumes.
CCTT Meeting in Sochi, Russia
Among the over 200 participants at this year’s 27th Plenary Meeting of CCTT, the International Council on Trans-Siberian Transportation, held in Sochi, Russia, on October 3 and 4, InterRail was again represented by delegates. In his speech, Hans Reinhard, Chairman of the InterRail Group, Vice Chairman of CCTT and President of GETO, the Group of European TransEurasia Operators and Forwarders, took the opportunity to not only express praise but also to utter some criticism.
“I have to say that some current developments make me think, even worry me, developments that we have to confront together.” After this introductory remark, he highlighted diverse negative developments in the block train traffics between China and Europe in his speech.
Even though growth forecasts concerning block trains dispatched or TEUs handled remain promising for 2018, there are some major obstacles which are threatening to jeopardize the stability of these traffics or which are already jeopardizing it.
In his speech, Reinhard pointed out that national CIS railway companies are currently profiting from political circumstances to attack existing train connections by offering rates and conditions that are not in line with the market, thus systematically driving small and medium sized operators from the market, although this leads to a loss of quality and causes coordination problems in Europe. A sort of quasi-monopolism with all its negative consequences is thus pre-programmed.
Another acute problem is the financial unbalance of diverse operators, as the Chinese platforms continue, even increasingly, allocating to the operator the interim financing of train handling between the Chinese external border and the European destination. Apart from quality losses, another consequence is that operators can’t then concentrate any longer on urgently needed investments in infrastructure.
A further problem, one that has been known for quite some time now, are infra-structural shortcomings. The European rail network is running at over-capacity, especially the border crossings are difficult spots. Particularly in Germany, the trains in the railway network are much more tightly synchronized in time, and there’s a much bigger variety of goods, which slows down and complicates handling.
The situation is even worse at Malaszewicze on the Byelorussian-Polish border. In view of the rapidly increasing transport volumes especially in west-bound traffics, this multi-terminal border station at the external EU border is already working at full capacity load. Although the border infrastructure was modernized with EU funding a couple of years ago, the facilities were not designed for the enormous growth in container trains ex China that is being registered at the moment. In March, additional modernization measures were initiated; they are however temporarily reducing the handling capacity. Alternative routes via Kaliningrad or Lithuania are being examined. Such plans cannot be implemented without political interference and the appropriate investments in order to eventually reach the capacity of Malaszewicze.
In Germany, it would already be of great help to promptly implement the 740-meter network. One would then not have to split the trains at the borders, for example coming from Poland. Longer freight trains come with significant benefits for all, as transports are more efficient and cheaper. Moreover, the easier handling at border crossings saves time and minimizes the risk of delays or downtime.
In conclusion, Reinhard again appealed to the participants of the meeting to endeavor to increase coordination and cooperation between the European players and the Chinese platforms. Instead of promoting monopolism, all parties actively involved in rail freight traffics between Europe and Asia should aim to achieve more transparency and market diversity. GETO as a neutral community of interests is prepared to act as a network builder and partner for political organizations, commercial structures and media multipliers concerning carriers, forwarding, operations and value-added services along this corridor. “Only together will we be able to create solutions that are appropriate to today’s fast growth”, was Reinhard’s appeal at the end of his speech.
InterRail at the China International Logistics & Transport Fair in Shenzhen
During CILF, held in Shenzhen from October 11 to 13, the Logistics Alliance Germany organized a forum with about 50 participants. German logistics experts offered insight into current development concerning “urbanlogistics”, “newsilkroad”, “smart seaports” and „smart airports”. One of the speakers invited was Hendrik Wehlen, General Manager Sales and Operations at InterRail Europe GmbH.
GTAI webinar "Chinas New Silk Road – what’s the potential of the new logistics routes?”
On September 19, Germany Trade & Invest, the economic development agency of the Federal Republic of Germany, held a webinar on "China’s New Silk Road – what’s the potential of the new logistics routes?” Hendrik Wehlen, General Manager Sales & Operations, InterRail Europe GmbH (Frankfurt, Germany), was invited as one of three expert practitioners to explain to the participants what new transport opportunities and logistics solutions are created by the New Silk Road and how German enterprises can profit from them. For more information, go to: https://www.gtai.de/