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Mar 07, 2019

“The Company’s goal is to carry all the goods the market demands,” says Oleg Belozerov



Oleg Belozerov, the CEO and Chairman of the Board of Russian Railways, has held a regular meeting with players on the transport market. The meeting was attended by heads of enterprises, major shippers, rolling stock companies and operators and public organisations.

Under discussion during the meeting were issues such as ensuring the growth in loading volumes, optimising technological processes and the transition to paperless technologies and electronic interaction, as well as the synchronisation of shippers’ plans with the repair and track work on the infrastructure of OJSC Russian Railways which is planned for the coming summer.

According to Oleg Belozerov, the Company’s goal is to transport all the goods that the market demands. Getting on top of the ever-increasing freight volumes is possible only through the implementation of integrated initiatives, as well as the rapid development of infrastructure.

Large-scale infrastructure projects are being implemented across Russia’s rail network, but their completion and expected benefits are planned for the coming years rather than the immediate present.

The Company’s efforts are therefore aimed primarily at improving the efficiency of technological processes and increasing delivery speeds. In the current year, Russian Railways has set a target of ensuring the punctual arrival of 99% of freight shipments, up from 96.7% in 2018.

One of the main areas of work to increase the rail network’s carrying capacity is the development of heavy traffic. According to Pavel Ivanov, Deputy Managing Director of Russian Railways and Head of the Central Directorate of Traffic Management, an additional 80 million tons, or 6%, of the total volume will be transported in 2019 by increasing the proportion shipped by heavy traffic.

However, Belozerov noted that due to significant increases in the load on the infrastructure, players in the transportation process need to calculate more accurately the amount of rolling stock needed for the declared loading volumes. In 2018, more than 350,000 wagons reserved for loading were not used by shippers. For the same reason, about 20,000 empty wagons are set aside at the moment across the Company’s infrastructure and cannot be used. In addition, more than 10,000 wagons have been standing idle for more than 5 days on the access tracks to enterprises in anticipation of loading.

"Employing these wagons for the transportation of socially important goods, including construction materials, will maintain the profitability of the carrier business and eliminate local shortages of rolling stock due to the low transportation distances and minimum turnover," said Pavel Ivanov. "This in turn will enable us to balance the shipments on domestic and export routes and move closer to the projected freight development parameters this year in accordance with our optimistic scenario," said Ivanov, who added that this work could be organised on the basis of the electronic "Freight transport" trading platform.

To optimise the technology and increase the volume of international trade traffic will make for a transition to the electronic interaction on the part of all participants in the transportation process, including government regulatory agencies.

According to Alexei Shilo, the Deputy Managing Director of Russian Railways and Head of the Centre for Corporate Transport Services, the Federal Customs Service and the Federal Tax Service (FTS) plan to complete the final necessary procedures, after which all players in international trade will have access to new freight transportation in the second quarter of this year.

This integrated technology will allow shippers to plan and arrange international transportation in electronic form and confirm to the FTS the right to the zero VAT rate on exports.

Participants in international trade will issue an electronic customs declaration, receive the necessary electronic permits, issue an international railway consignment note and sign it with an electronic signature.

For its part, the customs authorities will attach electronic authorisation marks to this consignment note, and the freight will be able to proceed to the adjacent territory. All reporting to government agencies will also be done electronically.

In May 2019, together with Finland’s VR Group, it is planned to start trial operations of an electronic clearance system for imported goods from Finland. In the future, this system will be extended to other areas.

Transit traffic technologies are undergoing similar development. It is assumed that by the end of this year, electronic invoices will come into use on shipments between Russia and China.

"In 2020 we will therefore achieve the targeted task of implementing rail export, import and transit shipments on legally effective electronic documents," emphasised Alexey Shilo.

During the meeting, the shippers raised various questions regarding the organisation of shipments during the summer repair and track work. The track and repair work has been planned in such a way as to minimise the impact on the passage of the main wagon flows.

According to Pavel Ivanov, more than 6,000 km of track will have to be repaired this year. On routes to the East, it is planned to provide "windows" along the whole route of freight traffic from the Kuzbass to the ports of Russia’s Far East from 15 April to 1 November.

In the European part of Russia, 3 main stages in providing windows are planned.

The first will run from 1 April to 31 May at South-Ural and Kuibyshev Railways along the freight route to the ports of the North Caucasus.

The second stage will be from 10 June to 31 August and lead to the ports in the North-West.

The third stage from 1 September to 1 November will go to the centre of the European part of the country.

According to Pavel Ivanov, in order to handle the projected loading volumes, each stage provides for the sequential redistribution of wagon traffic to alternative directions, although this may lead to additional uncompensated operating costs for Russian Railways, as well as to risks of non-compliance with the terms of freight delivery.

For example, when providing windows to the North-West, part of the traffic flow will need to go around the Druzhinino-Vekovka-Aleksandrov route, which is 560 km longer than that envisaged by the tariff manual.

In order to maintain loading volumes and ensure equal access to the infrastructure during the repair work, Russian Railways has proposed examining the possibility of pricing which takes into account the use of alternative transportation routes for this period. This, however, will require changes to the Order issued by the Ministry of Transport of the Russian Federation.




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