INTEGRATIONS FOR BUILDING « MUSCLES»

INTEGRATIONS FOR BUILDING « MUSCLES»

By Anna Reachi

According to the most conservative estimates, trade turnover of Asia and Europe will grow annually by an average of 2-3 percent. Thus, 7 years later, in 2020, it is estimated at 240 million tonnes in the physical terms and 1.8 trillion U.S. dollars in monetary terms. Even today there is a struggle for such a tidbit between countries that are expanding their transit potential, and between different modes of transport

 

 

The Silk Road: the revival of history in today's realities

 

Considering the development of routes between Asia and Europe, the main accent is given to the transit of goods from China, which over the past three decades has demonstrated the growth of the economy by an average of 10 percent per year that allowed it to achieve GDP of 8.5 trillion U.S. dollars and move into second place in the world by this indicator after the United States. The share of the Middle Kingdom today accounts for over 20 percent of total world trade.

 

Most of the manufactured goods from China - 80 percent is transported in containers by sea. Despite the fact that this is the cheapest form of transport it demands more time for delivery than direct rail traffic from China to Europe.

 

It is therefore not surprising that in the framework of the Shanghai Cooperation Organization (SCO) members of the "six" decided to revive the Silk Road. At a recent meeting in Bishkek, the Minister of Science and Technology of China Wang Gang said that the New Silk Road can be traced from China to Europe through Russia and Central Asia (Kazakhstan, Uzbekistan and Turkmenistan).

This is about creating a transnational corridor on almost entire territory of the Eurasian continent. Such corridors are meant not only for the ability to move goods and services, but also the creation of industrial clusters, new industries, high technologies.

 

A single way network from the Pacific Ocean to the Baltic Sea will eliminate trade barriers, reduce the delivery time of goods and increase mutual settlements in national currencies. Such a project will allow to minimize transportation costs, as the Silk Road about one-third shorter than the sea route that goes around Asia and the Arabian Peninsula.

 

It is planned that implementation of this project will reduce delivery of goods from China. If now the goods to Europe are delivered in 45 days by sea, by the Trans-Siberian - about two weeks, the new path will be the shortest and take no more than 10 days.

 

Earlier, representatives of Washington offered China a different route, the so-called TRACECA that passes around Russia through the Caucasus to the Caspian and Black seas. As it was more difficult and more expensive, the most effective was the project of the New Silk Road.

 

The basis of the project is founded

 

The possibilities for this project are also attractive with the fact that until the middle of the next year, the countries of the Customs Union - Kazakhstan, Russia and Belarus - are going to join forces for creating a powerful project that is called by experts as the most striking and perhaps the first joint project of the "three" aimed at minimizing timing of shipments in the direction of "East-West".

 

The authorities of the three countries claim that the project of the United Transportation and Logistics Company ( UTLC ) will increase the revenue base of all the national railway companies of the three countries and will provide a real breakthrough in the development of the logistics of the participating countries of CU. Actually , the Customs Union, was created as a kind of "link" between Europe and the Asia -Pacific region . Combining of natural resources, capital, strong human potential will enable Kazakhstan, Russia and Belarus to strengthen their positions in the industrial and technological race, the competition for investors and for the creation of new jobs.

 

If for the creating of the European Union it took more than 40 years, the Customs Union and Common Economic Space were created in record time, as it was taken into account the experience of the EU and other regional organizations.

 

It is not surprising that the economic integration started from the transport sector, because cooperation of rail carriers, like no other partnership is the least aggressive and competitive. Railways of one country cannot be used in isolation. Especially because in this direction there is a single route network, inherited from the time of the Soviet Union.

 

Kazakhstan, the main initiator of establishment of the Customs Union, is now increasing its investment to the railways. Railway authorities have set ambitious goals to themselves - increase freight and passenger traffic from Western Europe and Russia via Kazakhstan to South-East Asia, from China and the Persian Gulf in 2020 - twice, and in 2050 - to ten times.

 

Over the past few years for this goal it has been laid second railway from China with the capacity of 25 million tons, requiring investment of over one billion U.S. dollars. Such is the price of 293-kilometer stretch from Zhetygen to Korgas at the Chinese border. This route became part of stretching for 10,800 kilometers highway from Chinese Chongqing to German Duisburg. This year, Kazakhstan intends to invest $ 1.3 billion to the development of railways .

 

Due to the construction of new corridors transit through Kazakhstan has become more convenient than the Trans-Siberian railway line linking the Pacific coast with the European Union.

The generated logistics company will be approximately 2 - 2, 25 billion U.S. dollars. It will use not only existing rail infrastructure, but will also involve the management of interests of the participating countries of this union.

 

It is assumed that the "Russian Railways" will contribute to the joint venture its 50 percent + two shares of "TransContainer" and 100 per cent stake of "Russian Railways Logistics ." JSC " Kazakhstan Temir Joly" will make assets of "Kaztransservice" and "Kedentransservice" and the Belarusian side , in turn, can provide nearly 3 thousand flatcars . In addition , all parties will give to UTLC wagons for the transportation of containers , the containers and the necessary property of rail freight terminals at stations Zabaykalsk (RF), Dostyk ( Kazakhstan ) , Altynkol ( Kazakhstan ), Brest - North (Belarus).

 

In addition to the use of existing transit corridors, creating of UTLC is also convenient because the union of carriers of the three countries allows to provide the most favorable conditions for shippers. With the establishment of UTLC the shipper does not have to negotiate separately with Kazakhstan, separate and apart from Russia and Belarus. He will be provided by shipping conditions from "Dostyk" (Kazakh-Chinese border - Auth.) to "Brest" (Belarus border town – Auth.).

 

Other than the direct economic benefits for the countries of Customs Union in the framework of increasing transit traffic between Europe and Asia (and vice versa), the development of the international transport corridor has another aspect: it will promote the mutual exchange of technology between customs and freight forwarders and between producers as well.

 

The Europeans - for the garland in the field of maritime transport

 

As a rule, for the transit and the construction of new sites there are fighting the countries of all over the world. One proof of this is the recent announcement of the largest operators in the world, who decided to combine their efforts for the implementation of container traffic in the field of maritime transport. In mid-June of this year, the three largest container operators - Danish Maersk Line, the Swiss Mediterranean Shipping Company (MSC) and the French CMA CGM agreed to create a unified network services.

 

At present, their total share to world container capacity is about 37 percent. They intend to collaborate on areas of Asia-Europe traffic across the Pacific and the Atlantic. Such a plan would require approval by regulators and numerous technical study, so the beginning of the joint operation is scheduled for the second quarter of 2014 (that is, as UTLC does, by the middle of next year).

 

At the same time, European and Eurasian analogs of new transport routes are unlikely to compete with each other. These projects will be implemented in the different modes of transport, and that’s why each of them will take its place , each - for defined category of consumers. Owners of high-value goods are generally not interested in the sea route, despite the fact that the latter is the cheapest. Land route in this case is two times shorter and three times faster by delivery terms, and is also safer. Cargo going by rail is much easier to control.

 

So far as it is known, according to world statistics first place among all types of transport by cargo turnover and total volume of transportation work is given to maritime transport, it carries more than 60 per cent of global turnover. Rail's share in the global turnover is 21 percent, the rest falls on motor mode of transport.

 

Road transport does not remain aloof

 

Motor corridor in the direction from China to Europe, by the way , also taken on the agenda of the countries that are actively developing their transit potential . Construction of the highway " Western Europe - Western China" began in 2009 . The total length of the corridor along the route St. Petersburg - Moscow - Nizhny Novgorod - Kazan - Orenburg - Aktobe - Kyzylorda - Shymkent - Taraz - Kordai - Almaty - Khorgos - Urumqi - Lanzhou - Zhengzhou - Lianyungang is 8,445 kilometers. Among them, 2,233 kilometers are on the territory of the Russian Federation, 2787 miles - the Republic of Kazakhstan , 3,425 kilometers - the People's Republic of China.

According to experts, the construction of the international transit corridor will reduce the delivery term of goods from China to Europe by road almost 3.5 times compared to the sea.

 

 

06.11.2013

 

 

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