UTLC Eurasian Rail Alliance: A growing challenge to liners from Asia to Europe

The UTLC Eurasian Rail Alliance, a China – Europe rail container service provider, is looking to further expand its service network in 2018 in order to meet the growing demand in the region.

The alliance was jointly established by Russian Railways, the National Union Belarusian Railway and National Company Kazakhstan Temir Zholy in 2014.

According to Aleksey Grom, president of the alliance, the company offers full transit packages from the Chinese border to Europe in just five days, covering a distance of around 5,430 km, and it is looking to further expand its presence in the market.

Grom reveals that in February the company will sign an MoU with Rail Cargo Austria and Rail Cargo Logistics-Rus to add more regional partners to its service network, and the company is also working on a new multimodal transit service with Kaliningrad’s rail company.

This year the three shareholders of the company will adjust their shareholdings to the same level of 33.3%.

Grom says China’s One Belt One Road (OBOR) initiative is greatly benefitting the company’s business.

“For us the OBOR initiative is like a big doping to be more competitive and customer-oriented, and the latest growth in rail transport makes us believe that the demand will be rising up and more and more companies will join sooner or later the benefits of our common Eurasian rail system,” Grom maintains.

Grom admits the main challenge remains the two different rail gauges in China and some parts of Europe – the 1,520 mm rail gauges versus 1,435 mm rail.

With the expansion of the China-Europe rail cargo services, Grom reckons rail will very likely take sizeable volumes away from ocean container carriers.

According to Grom, the average annual volume of Eurasian shipments is around 20m teu and currently more than 90% goods are transported by ocean routes.

However, significant inventory and volume growth in rail transport makes Grom believe that rail will take more business away from the liners.

“We do not have the idea of trains replacing marine shipping, but there is one thing trains can be 100% better that marine – offering much quicker transit times which is getting more and more important due to worldwide economic changes,” Grom says.