Conference: Rail Deliveries of Mining and Smelting Cargoes in Russia

Date: September 29–30, 2016

International two-day conference “Rail Deliveries of Mining and Smelting Cargoes in Russia” organized by MAXConference, has been concluded in Moscow. This year over 170 delegates from Russia, Kazakhstan, Finland, Germany, Norway, Ukraine, Azerbaijan, Latvia, Belarus, Poland took part in the event.

The conference was opened by Transkom CEO, Eduard Kaplan. He spoke of pioneering experience with systemic logistical integrator – the common center that would unite all participants of the transportation process. Transkom has been implementing the system on Kazakhstani-Russian routes over the present year. ‘The keystone is integrated logistical teams enlisting representatives of all participants of the transportation process (there may be up to 7 or 8 of such players). These representatives are authorized to make decisions in operational administration of the transportation process.’

‘This is the right way, and the correct approach’, — said Alevtina Kirillova, Advisor to the Minister of Transport of Russia, speaking of Transkom experience. In her turn, she shed some light on what is done at the state level for the development of international transport corridors, the creation of Common Transport Area in the Eurasian Economic Union, ‘seamless’ border-crossing and ‘de-bottlenecking’.

Much prominence was given to the development of North-South Transport Corridor. ‘Sanctions have been lifted off Iran, and now it very actively discusses possible foreign-trade contracts, both with Russia and neighboring countries’, — said Mrs Kirillova. The Advisor called the North-South corridor “the land Suez Canal” meaning its strategic importance.

Discussion of the North-South Corridor and partnership with Iran continued on the second day of the conference. A whole session was dedicated to the issue of exports. Development prospects were outlined by the representatives of the railroads of Ukraine and Azerbaijan, as well as the Russian companies InterRail Service, Morstroytechnology, and Russian Steel.

The conversation got fierce once the participants reached the topic of rail car deficit. The situation around the transportation of coal from the Kuznetsk basin was called critical. Evgeny Kuznetsov, Deputy Director General of Sibuglemet, reported the increase of stock coal by two times over the last month. ‘But this is the commodity you simply cannot store much longer, and we are about to face the situation of 2011, when we had to contact the authorities and complain about not being able to sell the coal and, hence, fulfill our social obligations’.

This kind of situation is not a distinctive characteristic of Kuzbass only. Alexander Rodionov, a representative of one of the largest non-metallic holdings of Russia – National Non-Metallic Company, stated, that, due to the lack of rail cars, volume numbers are lagging behind planned ones significantly. Most of the hit is taken by the South-Urals railroad, its plan is only fulfilled at 60%. 

Operation in the conditions of heavy rail car shortages, how these shortages came to be, and how steel companies deal with the transportation of finished products — all of these issues were discussed both during the main sessions and on the sidelines of the conference. In his interview to MAXConference, Vladimir Tarasenko, Head of UGMK-Trans said that their company ‘sometimes barely makes profit engaging railcar fleet, or does not make any profit at all, just to avoid problems with coal transportation. Vladimir Savchuk, Deputy Director of IPEM, noted in his commentary, that rolling stock decommissioning rate will keep exceeding purchasing rate in the next year, and it will result in major problems for other types of freight, not only coal.

Statistics says that over two years about 100 thousand rail cars have been decommissioned, but operators are not eager to buy new fleet, since it is not paying off currently. Another section of the conference was focused on new generation rail cars, their maintenance costs, and state support efficiency. Representatives of Altayvagon, SUEK, UralVagonZavod, and other companies shared their experience.

Presentation on port infrastructure development and sea terminal capacity increase was delivered by our Finnish partners – the port of Kokkola, rating first in Finland in terms of transshipment of mining products. Torbjorn Witting, CEO, stated that Russia is the main strategically important region for the port, and it’s of paramount importance for Kokkola to improve service rate and costs of Russian freight processing. He shared information about the new terminal – by far the only one in Finland – that has rail car dumping system, which can unload up to 15-20 cars hourly, or over 500 cars a day.

We would like to express our gratitude to our partners: TransKom, New Forwarding Company, Rail Commerce, RZD Logistics; all participants of the discussions and speakers from Russian Railways, InterRail Service, Morstroytechnology, Russian Steel, Stena Line, Mechel Trans, RailTrans Logistics, Severstal, the port of Kokkola, Altaivagon, SUEK, UralVagonZavod, Sibuglemet, Federal Freight Company, IPEM, UGMK-Trans, National Non-Metallic company, Ministry of Transport, RUSAL, Vostok-1520, EVRAZ NTMK, Istok Corporation LLC, VRK2, Association of Rail Car Manufacturers, Ukrainian Railways, Azerbaijan Railways, and others.

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Conference feedback

Eduard Kaplan: ‘We rate your conference very high, it’s a good communication platform, because people get to meet annually, they know each other very well; it’s all here – brainstorming, experience sharing, listening to other people – you name it. We also had a few important meetings and negotiations, very fruitful ones’.

Alevtina Kirillova: ‘I would like to thank the organizers for giving us the chance to discuss all the problematic issues here. It’s exactly this kind of forums and conferences that let all players of transportation markets get together and outline further cooperation and interaction paths’.