More China Links Don’t Compensate for Russian Railways’ Lost Traffic

A new Volgograd-Zhejiang rail connection is the latest post-Ukraine invasion move by Russia and China to integrate their rail freight supply chains.

RZD Logistics organised the direct service from Orlovka station to Yuxi, operated by Russian Railways subsidiary Privolzhskaya Railway, in an effort to meet the growing demand for capacity following the wide-ranging reorientation of Russia’s economy.

Head of RZD’s Saratov branch Vera Vtorygina said: “The service is getting more popular among the clients of Volgograd region.

“We are also planning to launch a cargo service by Privolzhskaya Railway to China via Mongolia.”

Extending rail links into China has been as much a consequence of Russia’s invasion of Ukraine as it has been planned, with sanctions having cut the country off from many markets.

But, despite the work having begun almost immediately after the first bombs fell, resistance by the Ukrainians has elongated the war far beyond expectations, and on a recent trip to Beijing, President Putin was accompanied by the chair of Russian Railways, Oleg Belozerov.

He met with his China Railway counterpart, Liu Zhenfang, to hammer out terms for a strategic co-operation agreement between the two carriers.

This would include plans to introduce scheduled container services catering for the ever-increasing demand for mail and parcel volumes between the two countries, together with work to develop staff and toward technological innovation.

The news could not come at a better time for the beleaguered Russian rail freight carrier which, despite the strong upturn in eastbound traffic, has failed to make up lost European volumes. Reports suggest that, over the four months to May, Russian Railways may have lost as much as €500m in revenue, with no indication of the situation improving.

One’s loss is another’s gain, however, as Central Asian carriers have capitalised, targeting business from those refusing to use Russian capacity, with Kazakhstan Railways one to benefit.

In the same four months this year, the Kazakh carrier saw volumes surge, its government having stepped in to bolster necessary infrastructure to keep the gravy train moving.

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