Friday, April 6, 2018

Reorganised Rail Freight Cooperative Aims to Promote Intermodal Chinese European Container Links

Three National Railway Companies Push for Market Share
Shipping News Feature
RUSSIA – KAZAKHSTAN – BELARUS – In December last year an extraordinary meeting of the three shareholders of the United Transport and Logistics Company JSC (UTLC), namely JSC Russian Railways, the National Union Belarusian Railway and JSC National Company Kazakhstan Temir Zholy, decided on a reorganisation of the affairs of the intermodal rail freight operation and this week saw the founding of the UTLC Eurasian Railway Alliance JSC (UTLC ERA) aimed at stepping up container transits between China and Europe.

The new setup will follow the principles of its parent in utilising an asset light approach with the three shareholders each retaining 33.333% of the new stock. UTLC JSC was the first integrated business within the Eurasian Economic Union, which aimed at achieving a united transport infrastructure between the three rail carriers in the crucial East-West corridor. Alexey Grom, UTLC president, commented:

”The goal of parity achievement in the share capital of UTLC ERA JSC has been achieved. Currently the project is of equal members with united goals and tasks. This approach to business organisation is particularly important for the integration projects implementation, where the final result depends on the level of partnership and cooperative efficiency."

The united aim of the three cargo carriers is to promote the use of intermodal transport, principally the transit of containers by rail, for the benefit of shippers in China, Southeast Asia, and Europe. Several trains already cover an average of over 1,000 kilometres each every day between the European and Chinese borders passing through the three neighbouring countries.