JSC Russian Railways is Ready to Offer Stable Tariff Conditions for Transit

As a single network-wide carrier, JSC Russian Railways is ready to offer passengers stable and, therefore, predictable long-term tariff conditions.

This was stated by Vice-President of JSC Russian Railways Salman Babayev at the Third International Scientific and Practical Conference “Optimal Tariff Decisions for the Effective Development of the East-West International Transport Corridor.”

“This approach to the formation of a tariff policy allows shippers to make long-term forecasts on production volumes and long-term contracts with raw-material suppliers and consumers. This is especially important under conditions of high price volatility in world markets. It should be noted that the level of tariffs for the transit of goods on Russian railways has not changed since 2011,” said Mr. Babayev.

According to him, a significant part of freight flows east to west by sea. The dominant position of shippers in this area does not allow them to expect a reduction of the transport component in their costs. In this context, rail transport is a reasonable economic alternative to sea transport.

“Prospects for the development of the East-West railway corridor are associated primarily with the development of technology and improvements in transporting large containers by fast trains. Today, accelerated container trains deliver cargo from the Russian port on the Pacific Ocean to the western borders of Russia in about 8 days, i.e., at a rate of about 1200 km per day. This technology has not only significantly reduced the time of delivery, but is also used to deliver fixed batches regularly and on schedule,” said Mr. Babayev.

On Russian railways, the transport of goods in transit, including the Trans-Siberian Railway, is carried using the rates of Tariff Policy of Railways of the Commonwealth of Independent States for the transport of goods in international traffic.

As Mr. Babayev noted, the key question of interaction for railway administrations is through the harmonization of tariff rates.

In the formation of through tariffs and their coordination with railway authorities, JSC Russian Railways is guided by the following:

– The level of pass-through rate should ensure the competitiveness of transport in comparison with other areas, including alternative modes of transport;

– Reducing the current level of tariffs should take into account the interest of each participant in the implementation of transportation in this area and on an equal basis with equal interest of participants;

– Rates declared by individual members of coordination should be comparable to the conditions announced for similar transport on other routes (freight and cost of stevedoring tariff).

In addition, in the development of cross-cutting interest rates, the participants can agree on a unified system of discounts depending on traffic volumes newly attracted to this line.

One example is the agreement with the Chinese, Kazakh, Belarusian and Ukrainian parties to establish special fares providing a pass-through rate on the route of container transportation:

Trans-Siberian Railway across the Ukrainian and Belarusian border crossings (container trains from third countries in third countries, Mongolian Vector and Europe-China-Europe);

into and out of China through the Dostyk border in Kazakhstan passing through third countries through Ukrainian (New Silk Road container train) and Belarusian border crossings (Chongqing-Duisburg container train).