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May 24, 2019

RZD Holding presents project “Trans-Siberian for Japan” to shippers

A presentation of the project "Trans-Siberian for Japan," a new transport product of the RZD Holding, was given at the Federation of Business of Japan in Tokyo on 24 May 2019.

Present were Alexander Misharin, the First Deputy Managing Director of Russian Railways, Vladimir Tokarev, the Deputy Minister of Transport of the Russian Federation, Mikhail Galuzin, the Extraordinary and Plenipotentiary Ambassador of the Russian Federation to Japan, Yasihiro Sinohara, Japan’s First Deputy Minister of Land, Infrastructure, Transport and Tourism, Alexey Shilo, the Deputy Managing Director of Russian Railways and Head of the Corporate Transport Service Centre, Vyacheslav Valentik Managing Director General RZD Logistics, Vyacheslav Saraev, the Managing Director of JSC TransContainer, and representatives from Japanese business.

"We are open to a constructive dialogue and are ready to build relations with Japanese shippers and operators of shipping lines on a long-term basis," said Alexander Misharin.

According to Misharin, Russian Railways now has 12 representative offices abroad. "We hope that soon such an office will appear in Japan," he said.

Presenting the Trans-Siberian for Japan project, Alexander Misharin recalled that the day before, on 23 May 2019, the first large-tonnage container was dispatched along the Japan-Russia-Europe route from the port of Yokohama. The container will then travel further along Russia’s rail network. Russian Railways has aimed the new service, called the Trans-Siberian LandBridge, at the Japanese market. The service will be run by RZD Logistics, Russia’s largest logistics operator, and the FESCO transport group.

"The role of the Trans-Siberian is changing dramatically. The rapid development of Internet commerce and the large-scale penetration of digital technologies into transport and logistics are increasing the demand for regular container services and tight compliance with freight contract delivery times. Our main efforts are aimed at increasing the capacity of the infrastructure of the Trans-Siberian and Baikal-Amur Railways up to 180 million tons by 2024. In addition to the development of transport infrastructure, we are ready to offer our Japanese partners a comprehensive door-to-door transportation service using the Trans-Siberian Railway. Freight delivery speeds are now more than 1,000 km per day," said Alexander Misharin.

The proposed service will be of interest to Japanese companies that prefer just-in-time delivery and which in the main transport goods with a limited shelf life, such as new equipment, food products, seasonal goods, cosmetics and others, as well as goods with a negligible transport component in the price.

At the moment, delivery times from Japan’s ports to European ports are up to 50 days, while deliveries by rail under the Trans-Siberian Landbridge project are guaranteed to travel strictly according to the timetable, with travel time from the Japanese port to its destination in Europe from 19 days.

In addition, prospects were noted for the development of cooperation with the JR Freight company, the freight division of the JR Group, which is a Japanese railway operator. The JR Group is currently actively developing container transportation and terminal infrastructure and will be able to deliver cargo to the ports on the east coast of the island of Honshu and consolidate ship consignments. From Honshu, the consignments can then go directly to Russia and on to Europe.

The implementation of such a joint project would further reduce the transit time - to up to 15 days, thus making the delivery of goods to Europe via the Trans-Siberian Railway even more competitive and attracting additional freight volumes.

Alexander Misharin also drew attention to the high environmental friendliness of rail transport. According to the International Energy Agency’s rating, in 2018 Russian Railways held first place globally in terms of the energy efficiency of its freight shipments.

"Russian Railways is constantly working to improve the technology of its freight deliveries, increasing the quality of service and ensuring transport safety. This has seen the volume of transit cargo shipments rise by one third in 2018 compared to 2017. In total, 553,000 Twenty-foot Equivalent Units (TEUs) of transit shipments were transported by Russian railways last year, with over 351,000 TEUs going in the East-West direction. This year, we expect to reach a figure of 700,000 TEUs, and we have set ourselves the ambitious target of transporting about 1.9 million TEUs by 2025," said Alexander Misharin.

"Today, with the participation of the Trans-Siberian Railway, transport links have already been established which connect 21 cities in China with 32 cities in Europe. A similar transport network can also be set up for cities in Japan" said Alexei Shilo.

According to Shilo, about 15 million tons of high-tech goods are transported from Japan to the European Union every year by various types of transport. According to research by Russian Railways, up to 10 million tons of this figure are capable of going by rail.

An important advantage of the Trans-Siberian Railway is the security of cargo and containers. In 2018, a total of just 35 claims were received for unsafe container shipments out of 2.1 million shipments, which is less than 0.002%. In 2018, 97.3% of deliveries arrived within the agreed deadlines, while so far in 2019 the percentage of timely delivered shipments reached 99.1%.

A stable tariff policy applies on Russian railways. Over the past 10 years, the level of tariffs for transit has not been increased. Moreover, decisions have been made to offer additional discounts in certain areas.

To simplify the passage through control procedures at the state border, Russian Railways is developing cooperation with the supervisory authorities, in particular with the Federal Customs Service of Russia.

Automated systems enable the transfer of preliminary information about goods to the customs authorities even before they are imported into Russia and to dispatch and place goods under the transit procedure and complete it, as well as to perform other customs operations.

In addition, cooperation with the Federal Customs Service of Russia in electronic form enables the customs authorities to process the documents for the entire train at the border in just 1.5-2 hours.

Within the framework of cooperation with the Japanese side, Russian Railways is also working on projects to create the Baltiysky Transport and Logistics Centre (TLC) at Shushary station in St. Petersburg and the Primorsky TLC in close proximity to the Far Eastern ports and the Russian-Chinese border at Ussuriysk. The location of these TLCs enables an optimal consolidation and distribution of Japanese cargoes being imported into the Russian Federation and in transit to the EU countries, China and Central Asia.

Russian Railways, together with the Japanese companies Mitsubishi Heavy Industries and Sojitz Corporation, are exploring options for joint investments in the framework of preliminary feasibility studies.

The creation of the Primorsky Transport and Logistics Centre and the Baltiysky TLC, along with the Kaliningrad TLC, will in the future allow the formation of container trains with cargoes from Japan, North-East China and South Korea for deliveries to and from the European Union.

RZD Logistics is the key division of the Russian Railways Holding which specialises in the provision of comprehensive transit transport services. It acts as a "one-stop-shop" for the Japanese market with regard to all issues related to transportation along the Trans-Siberian Railway to Russia and transit to European countries.

As part of a joint test transport programme developed by Russian Railways and Japan’s Ministry of Transport, RZD Logistics organised a number of shipments from Japan to Russia between July and December 2018. The delivery time by rail from the ports of the Far East to Moscow was just 7 days. At the same time, thanks to the sensors installed in the container, the Company was able to confirm the reliability and stability of the railway service - the absence of vibrations and stable temperature and humidity levels.

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