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June 25 2018

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June 25 2018 | The Journal of Commerce 39 www.joc.com Asia Trade: Midyear Review and Outlook Cover Story Special Report ernment hopes additional railway upgrades will help China-EU and China-Russia traffic increase to 1 million TEU by 2020. The major- ity of this traffic will be on the Trans-Siberian Railway, with an average daily run being 2,000 kilometers. Eventually, Kosoy said, Russia hopes to increase the average train speed on Russian about $1,200 to $2,000 per TEU, depending on the season. Currently, cargo delivery from Shanghai to St. Petersburg is about $1,500 per TEU. From Vladivostok seaport, a considerably longer route, the cost is higher, about $3,800 to $4,000 per TEU. The government of China's initial plan called for the redirection of up to 15 percent of its container cargo flows currently transported to the European Union by ocean carrier to be shifted to rail transport. However, the plan will likely be revised, as the use of the New Silk Road remains unprofitable for the majority of transport companies involved on it. Meanwhile, Russia continues to sub- sidize transport, which has been a factor in rail's volume growth, and all indications are that this policy will continue for the foreseeable future. In the past two years, China-EU and China-Russia volume has increased about 60 percent to 420,000 TEU in 2017, according to Russian Minister of Transport Maxim Sokolov. The Russian gov- territory to 160 to 180 kilometers per hour. However, most analysts agree that speeds higher than 90 to 100 kilometers per hour probably will not be because of the high rate of rail utilization and lack of modern- ization. JOC email: gerden.eug@gmail.com The higher speeds have enabled officials to increase the number of daily trains on the Trans- Siberian Railway, as well as their trip length.

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