Report: Belt and Road Transport Corridors: Barriers and Investments

_ EDB Centre for Integration Studies. Saint-Petersburg, 10 May 2018.

Belt and Road Transport Corridors: Barriers and Investments — Saint Petersburg: EDB Centre for Integration Studies, 2018 — 44 p.

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The report presents an analysis of the impact that international freight traffic barriers have on logistics, transit potential, and development of transport corridors traversing EAEU member states. Restrictions discussed in this report include infrastructural (transport and logistical infrastructure), border/customs-related, and administrative/legal barriers. The authors also provide the recommendations regarding removal of barriers that hamper international freight traffic along the China-EAEU-EU axis.

One of the most critical infrastructure restrictions is the insufficient transport capacity of Polish railways, including crossing points at Belarus-Poland border. The most intense container train traffic runs through the Brest (Belarus) – Małaszewicze (Poland) border crossing point. Almost all routes connecting China and the EU pass this crossing point. With the current state of Poland’s railway infrastructure, locomotive fleet and rolling stock, boosting container traffic through the Brest-Małaszewicze crossing point would be a challenge. Even now, the Polish side processes only 9 to 10 container trains per day instead of the agreed 14. Investments and substantial efforts are needed to upgrade the capacity of border crossings in Poland and develop the country’s railway infrastructure in the East-West direction.

Difference in the length of container trains is another constraint for the development of transcontinental transit along the China – EAEU – EU axis. The need to comply with the countries’ technical regulations as regards the train length results in required transhipment of containers and composition of several trains with different number of conventional railway cars. This, in turn, results in loss of time, accumulation of containers at crossing points, and higher costs.

The low speed of freight trains in EU countries has a negative impact on delivery time, which should be the key competitive advantage of land container transport. Container trains moving with high speed in the EAEU countries slow down dramatically as they enter the EU.

The main administrative and legal barrier to the increase of freight traffic among the China, EAEU, and the EU is the lack of unified shipping documents and technical regulations. Efforts are needed at the level of Greater Eurasia to implement a coordinated freight rate policy and standardise normative documents and technical regulations (rules for shipping various types of cargoes, rolling stock parameters, environmental standards, etc.).

To eliminate barriers to international freight traffic, it is very important for the countries hosting the main container transport routes to share long-term mutual railway traffic growth forecasts. Exchange of information will enable an advance assessment of the administrative and technical measures required to develop railway and related infrastructure so as to assure problem-free delivery of cargoes within approved timeframes.

According to the authors of the report, no mega projects are required to increase the transport capacity of land corridors along the China – EAEU – EU axis and boost their competitiveness compared to sea routes. Instead, what is needed is the selective elimination of transport infrastructure bottlenecks, which can be managed with limited investments: construction of additional railways, electrification of some railway sections, upgrade and modernisation of locomotive fleets, acquisition of special rolling stock, improvement of border crossing infrastructure, etc.

The report proposes a range of promising areas for investment in the EAEU countries:

1) investment in alternative East-West container train routes (the expanded use of the St. Petersburg transport hub and of Kaliningrad Region’s transport and logistics infrastructure);

2) establishment of nodal transport and logistics centres in Russia, Kazakhstan and Belarus; and

3) enhancement of international freight traffic with the use of special containers/cars (for chemical and mineral cargoes) and refrigerated containers (for food products).

A survey of European consignors has shown that efforts are needed to promote the use of trans-Eurasian freight traffic routes along the China – EAEU – EU axis. This will help to attract additional shipments from the EU to China and reduce the share of empty return containers. For the time being, European companies lack information about the advantages and terms of using trans-Eurasian land transport corridors (delivery times, transport modalities, door-to-door delivery, delivery costs), the level of their development, and existing routes (primarily railway ones).

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