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Eurasian Rail Alliance Index

new transit market index presented by UTLC ERA at CILF 2018 in China

Friday 19 October 2018, by Nazar TAMASHEVSKA

Alexey Grom, the President of the JSC United Transport and Logistics Company — Eurasian Rail Alliance (UTLC ERA) has presented the Eurasian Rail Alliance Index (ERAI) and related project website www.index1520.com to business community and Mass Media on October 12, at the 13th China (Shenzhen) International Logistics and Transportation Fair.

The CILF 2018, the 13th China (Shenzhen) International Logistics and Transportation Fair took place from 11 October to 13 October in the Shenzhen Convention and Exhibition Centre in Shenzhen, China and was organized by the City Government. The Fair gathered more than 1,800 exhibitors from 50 countries, with international companies having over 30% of exhibition platform space.

Rail container transit is the newest and indeed the fastest growing segment in the rail transportation market. In 2017, the amount of transit shipments posted a 60% increase compared to 2016, reaching 413,000 twenty-foot equivalent units. That said, there is plenty of room for further growth in this market: presently, some 95% of container shipments from Asia Pacific are delivered to Europe by sea, whereas rail transit is estimated to be, on average, 3× faster, more reliable and only twice as expensive as shipping containers by sea.

The amount of container traffic on route China-Europe-China at transit services of UTLC ERA for 8 months, 2018 amounted to over 157,000 TEU that exceeds the results of the same period of the last year almost twice.

UTLC ERA and INFRAONE consulting company have developed the Eurasian Rail Alliance Index (ERAI). ERAI index was designed to show an indicative value of railway transit services on the 1520 mm network.

ERAI July 2016 to Sept. 2018
ERAI: $2,783.00 (-121, -4.17%) – Transit Time: 55 days
ERAI U-East: $2,667.00 (-55, -2.02%)
ERAI U-West: $2,875.00 (-150, -4.96%)
WCI Drewry: $1,743.00 (+ 3, + 0.17%)
Freight turnover (×10): 27628 TEU (-536, -1.90%)
(Click to enlarge)

By its conceptual design, the ERAI is a composite index of the cost of transit container shipments in the Eurasian rail corridor across the territory of the Eurasian Economic Union between China and the EU. The index value depends on an array of factors. These include the rates charged by Russian Railways, Kazakhstan Railways and Belorussian Railways, the cost of using fitting platforms, the cost of terminal services, speed and time in transit, the infrastructure load status, and others. As a follow-up to the index, a decision was made to introduce sub-indexes reflecting the cost of container shipments from West to East (ERAI U-East) and from East to West (ERAI U-West).

Alexey Grom

According to Alexey Grom when interviewed by Chinese media, One Belt One Road project is a key project aimed at freight traffic development along the Great Silk Road. Rail transit traffic between Europe and Asia became competitive largely owing to high delivery speed and optimal rates for freight transit services. ERAI index value serves to unveil those two advantageous factors to customers.

The primary objective pursued by UTLC ERA in the course of ERAI development was to enhance awareness of clients about cost of rail transit, and in future use the index for payments with logistics companies and shippers in the Eurasian region. The index value depends on a level of infrastructure rates, cargo delivery speed, infrastructure capacity and many other traffic performance metrics. A shipper may now easily get online calculation of transportation costs from China to Europe and take a decision regarding transportation mode selection. We believe that the introduction of the index will increase customers’ interest in rail transit services and offer better accessibility to such services for increased number of cargo owners from China and Europe.”

Alexey Grom has also emphasised significance of the East-West Transport Corridor:

Even in the context of difficult environment caused by financial turmoil, overall sea and rail transportation volumes along the East-West Transport Corridor always remained high and never dropped below 20 mln TEU/y. It can be said with confidence that this route is a key element in building interfaces between the countries of Eurasian region and their development. ■

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