Exclusive interview with JSC UTLC ERA CEO: 9 of every 10 containers following from China to Europe and back by rail are using our services
Alexey Grom’s interview with The Beijing News “9 out of every 10 containers destined fr om China to Europe and back are transported by our company,” said JSC UTLC ERA CEO Alexey Grom. He also emphasized that in the recent years his company has been able to achieve significant growth thanks to the One Belt, One Road initiative.
In the first 6 months of 2023 UTLC ERA’s services forwarded 350,000 TEUs, 14% more than in the same period of the last year. The most popular types of cargo are still equipment, home appliances, paper and cardboard, and cars. Mr. Grom’s forecast is that by the end of 2023, his company will have transported 700,000 TEUs. “Imports from China to Russia and Belarus, tallying up to about 130,000 TEUs with a 180% growth, are among our most notable services,” said Mr. Grom.
UTLC ERA was established on a parity basis by railroad administrations of Kazakhstan, Belarus and Russia. It transports accelerated container trains over the three shareholder countries. According to Mr. Grom, 9 out of every 10 containers following from China to Europe and back by rail are transported by UTLC ERA. The company is one of the top 3 largest container operators in Russia; its market shares in Kazakhstan and Belarus are over 50%.
In 2022, UTLC ERA services handled 6,000 trains. That is equivalent to 681,000 TEUs, only insignificantly below the 2021 values (by 1.6%). In turn, transit freight on the China-Europe-China route that passed through all three participant countries (Kazakhstan, Belarus and Russia) came up to approximately 411,000 TEUs. In 2022, five countries took up the majority of China-Europe-China traffic: Poland, Germany, Belgium, the Netherlands and Hungary. In China, freight was destined mainly for the following provinces: Shaanxi, Chongqìng, Sichuan, Henan and Zhejiang.
Mr. Grom pointed out that in the first half of 2023 the share of cargo imported to Russia and Belarus from China via the company’s services was about 30%. Export freight took up about the same amount. Therefore, about 2/3 of UTLC ERA’s freight are export and import services, and another 1/3 falls to transit China-Europe-China services. In 2023, equipment, cars and home appliances remain the top 3 of goods transported from China by rail. According to Mr. Grom, the share of China-made cars that use new energy sources is not insignificant now.
The One Belt, One Road initiative proved extremely beneficial for UTLC ERA. 2023 marks 10 years’ anniversary of the One Belt, One Road initiative that has already became a key platform for international relations. Mr. Grom believes that Eurasian logistics have been growing ahead of schedule in the last decade since the initiative’s launch. They were able to reach new levels in transit amount, involve great many countries and companies. New corridors and routes appeared, along with new jobs. That brought a lot of benefits to the regions wh ere the new Silk Road lies.
In 2015, there used to be only 15 integrated routes at the Eurasian space that were in the company’s area of interest. There are almost 700 of them today. UTLC ERA estimates that in 2022 nearly USD 30 billion’s worth of goods were transported over the China-Europe-China route, or about 4% of the total trade between China and the EU. According to Mr. Grom, UTLC ERA has seen extensive development in the last decade. “Our company today and 10 years ago are two completely different companies. The success of our project would be impossible without our trusted partners in China, Europe and the EAEU,” he emphasized.
The company does its best to introduce modern digitalization approaches to its operations. In 2022, shareholders, acting in concert to improve transit speed and reduce process stoppages along the entire route to a minimum, were able to improve traveling speed of trains by 10% compared to 2021. Alexey Grom told us that UTLC ERA and its partners completed first test shipments of digitally sealed goods. He added, “We call on all our international partners to make further freight process digitalization (like digital consignment bills or digital support document packages) a key joint objective for 2023.” According to Mr. Grom, by the end of 2023, they plan to transport 700,000 TEUs. The objective is to reach the 1 million containers milestone in a few years’ time.