Agreement on International Goods Transport by Rail: what it is, its application and main provisions

The Agreement on International Goods Transport by Rail (abbreviation - AIGT) is virtually the first document containing information on the arrangement and implementation of international transportation.

Let's take a closer look at what the AIGT is, what is its structure, and what are the peculiarities of this agreement.

AIGT member countries

The AIGT is a document, which enabled the arrangement of transborder rail transportation to be improved. The Agreement was concluded on November 1, 1951. Its participants were the union republics of the USSR and Eastern European and Asian socialist countries. In 1997, Iran has joined, which previously had a separate agreement on rail transportation with Russia.

What is the AIGT purpose?

The main purpose is to create a unified regulation for the settlement of issues arising between representatives of countries in the course of conclusion and implementation of the international AIGT treaty. Also, the agreement enables the identification of opportunities for claims settlement in case of failure to fulfill the obligations set forth in the document.

Heads of the States being the agreement signatories undertake to comply with it. The same applies to other countries participating in transportation.

One of the AIGT key provisions is the obligation of the parties to the agreement to arrange the transportation of goods included in the transportation plan. The consignee is responsible for receiving the goods.

To simplify the settlement of disputes and improve the freight transportation efficiency, the AIGT member countries have adopted the Common International Transit Tariff (CTT). It is aimed to calculate charges for the delivery of goods in transit on the roads of member countries. In addition, the International Transit Tariff (ITT) was adopted.

Logistical conditions under the AIGT are not subject to change. These can not be adjusted neither by the states by their agreement, nor by other agreements.

And there is a number of goods, of which transportation shall take into account special conditions and requirements. These are long, heavy and oversized goods, rail rolling stock and hazardous products. In most cases, the parties to the agreement need to pre-agree the terms of delivery.

AIGT structure

As of July 1, 2023, the Agreement consisted of 4 sections containing:

1. General provisions and key terms of the agreement, delivery methods and conditions for ordinary and hazardous goods, product placement requirements and other general information.
2. Information about all documents, which shall be prepared to arrange safe and fast transportation of goods. Also, the section sets forth the responsibilities of the parties, cargo packaging and acceptance requirements, delivery and inspection terms.
3. Rules for the use of a railway car not owned by carrier as a vehicle. The section specifies rights, responsibilities, claims and lawsuits.
4. Information on the service instruction to the agreement, rules for maintaining and entry into effect of the adopted amendments and supplements. Also, the section sets forth the term of validity of the agreement. Thus, according to Article 60, the AIGT is concluded for an indefinite period.

Also, there are 6 Annexes to the Agreement on International Goods Transportation by Rail.

With regard to the main aspects of the Agreement on International Goods Transportation by Rail, these include:

1. Under the AIGT, goods can be delivered on the rail tracks of two or more states. Only single consignment note will be required - an international consignment note. The document shall be drawn up according to the recommendations in the Agreement. Such transportation is known as “direct international traffic”.
2. All freight transportations are divided into direct rail transportation and mixed transportation. In the first case, goods are delivered by rail only; in the second case, additional mode of transport can be used.
3. Direct international rail traffic can be reloading-free. This is relevant for countries with the same gauge. For example, when delivering goods via Russian Railways to Mongolia (1520 mm gauge in both countries).
4. Direct international rail traffic can include reloading when goods are transferred between cars of different trains. For example, when goods are delivered from Russia to China, reloading will be required (gauge in the PRC differs from that of Russian Railways: it is 1435 mm).

Additionally, the provisions set forth obligations for both the consignor and consignee countries. In the first case, the transportation plan shall be worked out in advance; in the second case, receipt of the arrived goods shall be arranged. In order to implement such deliveries, a range of transported goods shall be documented by filling in the AIGT consignment note.

Single consignment note - CIM/AIGT - is valid within the legal framework of the PRC, Kazakhstan, Russia, Belarus and European countries. Re-issue of the document during delivery is not required, when there are no discrepancies on international routes. This minimizes the risks of errors in the preparation of new consignment notes and optimizes transport costs.

According to Article 2 of Annex 22, the CIM/AIGT consignment note confirms the conclusion of haulage contracts under the CIM and AIGT in traffic between the countries applying these. The number of contracts remains the same. But these are executed under single shipping document.

According to Alexey Grom, CEO and Chairman of the Management Board of JSC UTLC ERA, the first container train using a unified consignment note was sent back in November 2019 from Xinzhu station (Xi'an) through the Kaliningrad region to Mannheim station (Germany).

AIGT peculiarities

Let's look in detail at how prices for the transit transportation by rail are calculated. The cost is calculated taking into account the domestic tariffs of the two countries (the consignor country and the destination country). When third-country transit routes are used during delivery, a special tariff is used in the calculation.

To make the calculation more convenient, the shortest distance is taken. This is a segment between two stations, which is indicated by the consignor. For this purpose, the departure station code is entered in a special field in the consignment note. In addition, the document shall specify:

●       full name of the consignor company;

●       consignor's code;

●       contact information (phone/fax number).

At the end, the consignor puts a signature, which confirms the correctness of the information in the document.

Optionally, the carrier can choose different shorter route for the transportation of products. Then the cost is recalculated in accordance with the actual route.

Consignors are often interested in receiving information about the movement of goods. To arrange this, export and import notices are issued and sent to the applicant at border stations. The first one informs that the goods have been shipped, while the second one confirms receipt thereof.