Moving East

“One-stop shop” – beginning from the 1st of January 2019 cargo from China can be transported according to new principle. The Agreement, signed by the Heads of Transport Ministries of two countries during Vladimir Putin’s visit to the Peoples’ Republic of China last June, came into force.

Earlier cargo turnover transported by truck between Russia and China was regulated by intergovernmental agreement dated 1992. The movement was bounded by border area up to 30 kilometers well inside the countries.

But during the last years a lot of changes occurred in the relationships between countries. These changes lead straightly to discussing of new ways of cooperation. The project of new agreement of Ministry of Transport of China and Russian Federation was conformed in March 2018, and in May the test auto race took place along the route Dalian (the Peoples’ Republic of China) – Manchjuria (the Peoples’ Republic of China) – Zabajkalsk (Russian Federation) – Novosibirsk (Russian Federation). It was organized mutually by the Ministry of Transport of Russia, Rosautotrans and Globaltruck Company. The column of trucks with vegetables and fruits moved forward on the 18th of May 2018, got over 6 thousand of kilometers over 4 Chinese provinces and 6 regions of Russia in 11 days. The route was opened for irregular connection. Meanwhile the uploading and discharging were permitted at the points, situated along the whole route. Till the end of 2018 all transport means used for transportation between Russia and China should have been equipped by satellite navigation systems GLONASS and BeiDou.

In fact, recently, this route and other routes (according to the agreement there were no restrictions on movement inside the Peoples’ Republic of China) have not been checked yet. Even despite the completion of all internal procedures, necessary for effectiveness of the agreement, about which the parties were informed as early as in September. Perhaps, because of holidays, at first Russian and then Chinese ones (on the occasion of Chinese New Year), we will be aware of first commercial trips according to new procedure in mid-February.

The exact understanding if it is possible to move inside China or not will become clear in a few days, commented the representative of the participant of test auto race Dalian-Novosibirsk  LLC “Longran Logistic”, the part of GlobalTruck holding. The carrier is also interested in this question, but the Chinese government has not confirmed the changes in Customs clearance yet and the delivery of cargo is possible only to Manchjuria with further reload to Chinese truck.

Actually, Russian trucks don’t move further than Manchjuria inside China, despite the fact that Dalian-Novosibirsk is not the only way and there are no restrictions in fact, confirmed the representative of LLC “TRASCO”.

On the other hand, the representatives of China also can move through the territory of Russia. But they can’t move transit to Europe as the Peoples’ Republic of China doesn’t have agreements with European countries. Meanwhile Russian trucks can transport cargo from China to Europe – LLC “TRASCO” has such an experience. But first of all the new order of transportation should boost the trade and increase the cargo turnover precisely between China and Russia, not Europe – by means of simplifying the procedures and reducing the time of delivery of cargo. Experts say that its volume can be increased substantially. Russian companies were granted over 80 thousands of bilateral transportation agreements for 2019. Certainly in comparison with European countries, the quantity doesn’t impress: the number of permissions, for example, with Latvia and Lithuania, are tallied to hundreds of thousands. Thus, it’s not clear what level of freight will be formed with the help of transportation from China. It’s difficult to say even if 80 thousands of permissions are in demand. During the transportation through the territory of China beyond the border it will be difficult for domestic transporters to compete with Chinese ones not only on the level of availability of resources (the cost of fuel, parking etc.)

Anyway, even if a lot of problems need to be solved, this direction of development of Russian-Chinese logistics is perspective, pointed out Miroslav Zolotarev, the Boarding Director of Worldwide Logistics Alliance ACEX:

“In our opinion, for the agreement to start working and bringing benefits to the participants of market we need to do a lot objectively. It’s necessary to pay attention to the cost of transportation by truck and to the possibility of their subsidizing for Russian transporters and/or exporters”.

Actually, general cargo can be transported by railway line 2 times cheaper than by truck today.

Consequently, transportation by truck will be profitable for specific categories of goods, first of all perishable, which demand special temperature conditions. The transportation of perishable goods by railway line is more expensive and by sea takes much time. The routes inside China will become profitable with the availability of enough volume of export from Russia for transportation by truck. The export should be supported and stimulated as the presence of export component of payment for the car run will compensate the total round cost. Besides, it’s necessary to pay attention to the possibilities of control stations on Russia and the Peoples’ Republic of China border from the Russian side and to provide there faster customs of trucks (carriers working in this direction, point out, that today the procedure takes around 3 days and it’s possible to reduce the cost of transportation by 15-20 % (by reducing this period of time to one day).

Anyway the consultations between the authors of agreement from one hand and the representatives of business together with state bodies of two countries on the other hand are required in order to bring this agreement to life. The serious work is to be done from Chinese side – it’s necessary to change the Customs procedures, to align them with the signed agreement. At least in terms of discharging and of making customs clearance of goods in China at any point of route, not only at the border, as it takes place today. It prevents Russian carriers from moving further than international border crossing and offset the interest. 

Nevertheless both countries are ready for mutual cooperation and it’s the most important thing. Waiting for the news and information after Chinese holidays.

 

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