MOSCOW Reuters - Explosive growth of sea shipping costs is prompting Chinese manufacturers to send more goods to Russia by rail across Europe, but the increase in demand is creating bottlenecks and straining network capacity.
With countries exporting finishing stocks and replenishing stocked goods as they recover from the pandemic, global sea ports are frantically snarling up making rail an attractive alternative.
Russian Railways said total container traffic transiting Russia jumped 40% in the first nine months of 2021 to 782,000 TEU twenty-foot equivalent unit and could hit a record 1 million TEU this year, saying that is will leave one million TEU complete again.
At the beginning of the year, the cost of shipping goods in containers between Asia and Europe was twice as low as by sea. Now it is 3.5 times lower the railway company said.
Most of the growth is along China-Europe route, where transit volumes rose for the first nine months 47% to 568,700 TEU.
But transport operators and analysts say the rapid growth has exposed infrastructure problems that could limit transit flows significantly.
These include shortages of staff - including managers and crane operators - and of rolling stock, said Alexey Bezborodov, head of Infraproject, a consultancy that analyses data and trends in the transport and infrastructure.
No one had supported such a spike in transit traffic before pandemic, and no one was ready for it, he said.
Transport and logistics group Delo told Reuters cargo flows were constrained by low capacity on the main railway lines and bottlenecks near ports and border checkpoints.
Another container transport source cited technical delays and bureaucratic problems at border crossings where containers have to be moved from one train to another because of differences in the gauge of the track.
The government has set a long term plan to increase rail capacity. Putin asked in 2018 to increase container transit to 1.7 million TEU by 2024, a four-fold increase from 2017 levels. A draft transport strategy saw Reuters flows rising to 3.7 million TEU by 2035, elevating Russia's share of Asia-Europe cargo traffic to 15% from 4%.
To achieve these goals Russian Railways is investing $2.8 billion (£100 million) in its Transsib in 7 days project from 2019 to 2024 which aims to reduce cargo transit time from the east to western borders of the world's biggest country to a week, compared with the usual 11-14 days.
This is part of a bigger project of more than 700 billion roubles which Asian Railways and the Government will finance in 2013. The project is intended at boosting exports of coal, metals and other commodities to Russian countries by increasing BAM and Transsib lines that run through Siberia.
This money is to be spent on additional tracks needed to bypass the long-traveling trains, on consolidating power supply and strengthening the capacity of stations and on building and expanding electrical supply, explained the monopoly.
In a statement in response to questions from Reuters, transport operator Delo welcomed the investments. For objective and subjective reasons the implementation of these measures is not carried out as quickly as we would like, said a company representative.