Alabuga takes Chinese Express: exports and imports take 10-12 days to arrive

Sollers and Haier invited Swift Transport?

Director General of Alabuga SEZ Timur Shagivaleyev told Realnoe Vremya that the Russian subsidiary Swift-Rus of the Chinese transporter Swift Transport International Logistics Co. Ltd was chosen as key partner for container shipping to China.

“Nowadays it [Swift-Rus] monthly uses two container trains with 100 containers to China. If earlier trains bore the logo of the Danish cargo transporter Maersk, now they carry the Chinese Swift,” the head of the special economic zone said.

According to him, Alabuga residents’ cargo traffic to China has repeatedly increased. There is a deficit of container capacities, while Swift managed to open a steady channel to sell products that “provides a chance of ramping up the sales manifolds,” noted Timur Shagivaleyev. But considering that international container transportation always operates in two-way direction, Swift provides import of components from China to Alabuga.

Sollers automobile company is the most active user of railway services. China’s Haier assembles equipment near Naberezhnye Chelny, while Chinese sheet material suppliers work in Nizhnekamsk. The director of Alabuga SEZ didn’t name the accurate amount of cargo turnover, but it can likely be 80-120 tonnes a month. It was said earlier that with 120 residents, cargo traffic will be 2,416 tonnes or 120,000 wagons.

Swift to settle in Deng Xiaoping’s logistic complex

After the signing of a contract with the Chinese transport company, Alabuga SEZ started to ship all freight by railway refusing intermodal transportation (railway and sea) eastwards. According to Shagivaleyev, the Chinese partner was chosen because of fast cargo delivery.

“They have the shortest delivery term because the train runs non-stop. There is no sorting at nearest stations. And when the whole container train departs, logistics takes less time. While time in logistics is key,” he explained.

According to the interlocutor of the newspaper, the Chinese company manages to do it in 10-12 days, moreover, the railway infrastructure in this direction is overloaded and traffic jams appear from time to time. “Now there is huge commodity turnover between China and Russia, there is a shortage of container capacities,” he said.

Moreover, the Russian subsidiary Swift-Rus operates as a partner, not residents of the special economic zone, Shagivaleyev specified. He says that a new terminal of the Chinese platform wasn’t planned to appear. “Swift has its own container stock at Alabuga SEZ (part of common or private railway infrastructure owned or rented by an individual or a legal entity) they export and import freight of their partners who are our residents through.”

Moreover, Swift Transport International Logistics Co. Ltd announced its intention to rent part of the future container area to set up a container stock on the territory of Deng Xiaoping’s logistic complex under construction (it is built with Alabuga’s money): “Today there is a deficit of container terminals whose freight turnover would be at least 60,000 containers a year in the Zakamye area. The capacity is planned to be 100,000 containers a year after all stages of the logistic complex project are over. The project is backed by the management of the republic,” the press service of the SEZ said.

How Fesco could replace Maersk

The biggest international cargo transporter left Russia in March 2022. As a result of closed business, losses totalled $624 million during the first half of 2022, the company said in its report. Russian transport and logistic operator Fesco could replace it. Late last year, the management of the company showed a presentation at a board meeting of Tatneftekhiminvest-holding with Rustam Minnikhanov. Then Sales and Business Development Director of Fesco Integrated Transport Alexey Kravchenko offered to sign a memorandum of understand between Tatarstan and the company and then open new routes.

So in October 2022, Fesco offered to launch container shipping Asia — Vladivostok — Kazan, where freight is exported to Southeast Asian countries. Two trips a month were going to open, the transit time en route from Shanghai to Kazan was to be 21 days. A regular container service from Turkey to Novorossiysk was due to open in December. Fesco’s representative who is now at Russian Railways confirmed for Realnoe Vremya that it wasn’t possible to do the project. Realnoe Vremya has sent a request to the company’s press service but there hasn’t been received a reply yet.

“The Chinese are directly interested in supplying components from China, the PRC government provides stimulating discounts for using railways in China to logistic operators because they export components from the country supporting domestic production,” one of the market players explained.

He says that land shipping is much better from a perspective of time and money: “If the route crosses Mongolia, the transportation takes eight days. Plus, on the territory of China, another 6-8 days to Shanghai, five days to Beijing. The whole journey will take two weeks, or 14 days, excluding the time for loading, the customs clearance,” he said. “Fesco offered one ship for shipping via Novorossiysk, it takes another three days to get to it. And it doesn’t happen so that the freight is reloaded from the train to the ship and takes off. Perfect options do not exist. Here it is necessary to wait for the ship to depart for two or three days and even a week. The sea trip from Novorossiysk to Shanghai takes two three weeks. It is a longer route than the railway trip,” he said.

Freight is imported from China to Russia faster than export from Russia to China, note players of the logistic services market: “It is necessary to agree with Russian Railways on the shipping. Russian Railways cannot be against in imports from China, agreements are reached automatically, exports from Russia need to be approved by the Centre for Corporate Transportation Services. Since the Far East is full, it is not always possible to let trains pass. The sender can claim five trains for departure, while Russian Railways will approve only two. The main difficulty is to obtain permit for freight exports, fit in the narrow neck,” they complain.

Experts agree that the logistic sector is gradually developing eastward: “Some importers are starting to actively refocus on suppliers from Southeast and Central Asia, members of the Eurasian Economic Union. Moreover, the Far East experienced huge workload because of the overload of sea ports and railway terminals and influences the speed of delivery to the end recipient. The load on traditional border crossings is growing, this is why transport and logistic companies are opening new routes to provide a high speed and financial efficacy,” Delovye Linii logistic company said. However, Alabuga’s logistic operators will inevitable rotate, federal players warn. In their opinion, new players will come to the region as industrial production in Zakamye will grow.