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Published: February 2006      

TSR traffic nosedives

Container traffic on the Trans Siberian rail link (TSR) between Vostochniy and Finland has shrunk to almost nothing after Russian Railways (RZD) increased its tariffs by almost 100% in one hit. The traffic peaked at 130,000 TEU in 2004. Last year more than 100,000 TEU were car r ied, slightly above the level of 2003.

Most of the containers on the TSR are stuffed with cargo headed for Russian consignees and are moved directly into Finland (mainly Hamina and Kotka) for devanning, warehousing and distribution by truck back into Russia at the import agent’s convenience and to a Customs point of his choice. Mainly Korean shippers and forwarders have been using the service, although Chinese and SEA shippers had begun to use it it more and more with shortsea hops into Vostochniy from North China and even Vietnam.

Now practically all the cargo has returned to all-water via Suez, and is arriving in Finnish (and other Eastern Baltic) ports on feeders, mostly from Hamburg and Bremerhaven. According to Matti Andersson, VR Cargo’s marketing manager, international trade, recently there has been only one weekly TSR train running, compared to 2-3 trains/day before the tariff hike.

RZD has justified the increase on the basis of its need to cover costs of running the TSR. It is hoped that a compromise solution can be reached with regard to the total tariff level and Andersson says that VR Cargo is more than willing to start to build up the business again. However, he acknowledges that it will be tough to get it back to the same level as before, even if the tariffs are scaled back somewhat.

Various efforts have been made to find eastbound cargoes such as Nordic forest products, chemicals, etc for which more attractive backhaul rates would be available, but the trade is still heavily imbalanced and RZD has had to position mainly empty flatcars, that are unsuitable for Russian bulk exports to Japan or Korea, back to Vostochniy. Furthermore, although the TSR had built a reputation for speed and reliability, the fact that most of the cargo was stored for some time in Finnish warehouses until the consignee or his agent called it up makes the time saving compared to allwater less important than price....

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