Additional indexation of the rates may get in the way of growth in domestic container shipments

24 may 2017 | Russian Railways Partner

According to Russian Railways, the past 5 years have seen the amount of cargo shipped by rail in containers in Russia go up by 28 %. "The Russian container shipping market demonstrated record growth in 2016. A total of 3.26 million containers were shipped, which was 10 % more than the year before. There was also a significant increase in the amount of containers shipped by rail: 13 % on the 2015 level; however, the speed of the traditional container trains and those whose speed was increased in the same period remained largely at the same level," Analytical Center expert Dmitry Chernenok commented on the situation for the Russian Railways Partner magazine.

Dmitry Chernenok
Dmitry Chernenok
Department for State-Run Programs and Budgeting

The expert believes that the main points of growth in container shipping were domestic and transit destinations that saw an increase of 12 % and 18.8 % respectively. However, container shipments were also on the rise in export and import destinations.

As the Russian ruble appreciated in 2016, it became one of the factors driving up international container shipments, Mr. Chernenok noted. In the early months of 2017 the trend has continued, with the result that this year we can expect to see continued containerization of international shipments, the expert believes.

"At the same time, one of the factors behind the increase in container shipments for domestic destinations in Russia was a pilot project that Russian Railways launched in May 2016 to simplify the submission of shipment applications using the GU-12 form and that made rail transport significantly more competitive with regards to its main competitor, road transport. And it should be noted that the fastest growth in container shipments coincided with Russian Railways carrying out their experiment: the first six months of 2016 saw a 6.3% increase in container shipments on the same period of 2015, while the last six months saw 14% growth on the same period the year before," Mr. Chernenok said.

The expert also believes that the prospects for further growth in domestic container shipments in Russia may be negatively impacted by the additional 4 % increase in railway rates approved by the Federal Anti-monopoly Service of Russia in its Order No 1747/16 dated 9th December 2016.

Source: Russian Railways Partner