Western China to Europe
Predictions have it that trade between China and Europe will amount to approximately 170 million t by 2020, with the goods traded worth approximately USD 1.2 trillion. The EuroTransit Group is setting up its own logistics infrastructure to serve Eurasian overland passage on routes through Kazakhstan. From 2020 onwards it expects to transport 500,000 teu by rail and 1 million teu by road annually.
From the day it was established the company EuroTransit set itself the goal that is aptly encapsulated in its name – namely to build logistics bridges between China and Europe for Eurasian trade.
Managing Director Yerlan Dikhanbayev told the ITJ how the company came to be set up. “I’ve been active in the logistics field since 1996, and have already been studying Kazakhstan’s potential to contribute to international trade flows for a long time. In the end, the first stimuli of the initiative ‘One Belt, One Road’ were felt in Kazakhstan in 2010, enabling the better exploitation of local and regional logistics opportunities.”
Motor of modernisation
A joint analysis soon established what were the biggest challenges facing Eurasian trade. There was already a basis for it, with railfreight solutions and road networks, but what was lacking was the requisite infrastructure at the borders. The objective became to establish the entire range of services needed, including multimodal handling capacities, warehousing opportunities, equipment, customs and documentation services and the like.
Thus EuroTransit has been committed to closing these gaps since 2012. The 100% privately-owned enterprise first tackled customers’ requirements at the region’s numerous border stations. Dikhanbayev is convinced that “rapid clearance at borders is one of the keys to success for Eurasian trade.” The potential offered by the time gained in overland transport solutions for goods from China destined for Western Europe should not be dissipated any more by inadequate infrastructure and poor processing speed. The dynamism developed by a private enterprise – in cooperation with the authorities, not least the customs authorities – should be able to make the best of the opportunities presented by Kazakhstan’s advantageous geographic position, linking China and Europe.
Dikhanbayev has observed that his plans have been fortified by current economic and political programmes, especially a national initiative, the new Kazakh economic policy framework called Nurly Zhol (path to the future), which was established in 2016 and which targets ongoing economic structural reforms, road construction and modernisation. It has been endowed with a budget of USD 9 billion, and creates a framework in which the EuroTransit Group’s plans can flourish. On top of this, China’s ‘One Belt, One Road’ initiative for a new Silk Road has also provided the sector with some strong international support to establish stronger Eurasian trade connections. All this has resulted in EuroTransit planning to launch its own blocktrains in the near future.
Border stations for rail operations
Since 2012 the core of EuroTransit’s activities has focused on establishing modern logistics facilities at the most important Sino-Kazakh border stations. “Despite the great distances across Central Asia, railfreight as well as road haulage operations can cover the route from western China to Western Europe in ten days,” Dikhanbayev explains, before adding the qualifier that “the activities naturally have to be carried out in accordance with modern logistics standards.”
EuroTransit is active at both railfreight border stations on the border with China. In Altynkol it has operated its own terminal since 2016, and at the Dostyk station it will open a facility in the year 2020.
The Dostyk terminal will work on the same principles as the Altynkol facility. The automated multimodal terminal in Altynkol covers 14 ha and has three broad-gauge (1,520 mm) and three normal-gauge railway platforms. Two cranes supplied by the Austrian manufacturer Künz, each of which can lift 41 t, ensure the facility’s annual throughput capacity of 250,000 teu. This can be doubled should volume growth warrant it. Over and above this EuroTransit’s terminal has an interim storage facility offering slots for 5,120 containers. Dikhanbayev underlines the fact that his company can “load or unload a blocktrain carrying 46 teu in just 50 minutes,” a performance that conforms to international standards.
The concept was developed in cooperation with customers and partners, and adheres to the best practices established by international corporations. The German consultancy Transcare also supported the process, ensuring that the gateway is equipped with all the latest technology and which also recommended recruiting Künz as the facility’s crane provider. EuroTransit will stick with this supplier for future crane acquisitions, in order to ensure that the units can be operated synchronously.
Border stations for road haulage
EuroTransit already handles large amounts of transit traffic from China to Europe at three of its home country’s four border stations open to road haulage operators – namely in Bakhty, Khorgas and Kalzhat. It is well-known that Khorgas is the largest of these centres, and EuroTransit handles approximately 300 lorries a day there. In Bakhty and Kalzhat it handles 50 each. The fourth border crossing in Maikapchagay will be added to the first three as a EuroTransit operational entity in mid-2020.
“Speed is trumps,” Dikhanbayev elaborates, adding that “we can clear a lorry or a wagon through customs in just one hour.” EuroTransit’s strategic plans go beyond merely offering transit traffic services to covering almost the entire supply chain. It also wants to set up a network of logistics centres covering the entire country.
CEP is one engine of growth
EuroTransit’s Kazakh warehouses include a 20,000 sqm facility in Almaty, the country biggest metropolis, as well as hubs in Taraz and Shymkent. Facilities in Karaganda, Atyrau and Aqtöbe have also been added recently. This only represent the beginnings, Distributing goods to every corner of the country under its own steam is one company goal.
To this end EuroTransit is busy building its own fleet. A base has already been established with the acquisition of 35 vehicles from Iveco. Kazakhstan’s particularly dynamic e-commerce sector also underpins the logistics enterprise’s plans. “There’s a great need to catch up in the e-commerce field in Kazakhstan, which has resulted in triple-digit annual growth rates of late,” according to Dikhanbayev. “This is why we’re steadily expanding our courier and express capacities, including last-mile deliveries.”
EuroTransit’s network and its concomitant infrastructure, which includes its six logistics centres, customs processing and transport capacities, already offers door-to-door deliveries in all of Kazakhstan.
Own blocktrains on new routes
The group’s main focus remains on Eurasian transit traffic. It is currently analysing a new route from China via Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and the Black Sea to Constantza (Romania). “Our initial assessment is complete and we’re ready to carry out test runs this year,” Dikhanbayev states.
The private Kazakh enterprise’s latest plans show the orders of magnitude in which operators tend to think in Central Asia. “We’re in the process of further expanding our client base in Western Europe, Russia and Central Asia,” Dikhanbayev adds, “in order to be able to run our own blocktrains.”
The firm has also invested heavily to this end. It has signed a contract worth approximately USD 45 million for the production of 1,000 new wagons with a Russian manufacturer. The first delivery of 50 wagons is due in October this year, with another 50 units set to follow every month.
EuroTransit’s blocktrains will initially connect China to various destinations in Kazakhstan, Russia, Uzbekistan and several European countries. EuroTransit is highly convinced that there is plenty more growth in volumes in the pipeline on these routes.
What is the overall vision underpinning these rather tempestuous developments? Dikhanbayev’s answer is simple, short and sweet. “We want to be the leading transport and logistics enterprise in the countries of the Commonwealth of Independent States.”
EuroTransit’s facility in Altynkol
• Total area 24 ha
• 3 850 m rail platforms (1,520 mm gauge)
• 3 850 m rail platforms (1,435 mm gauge)
• 2 Künz cranes with
with a 41 t capacity each
• Space to store 5,120 containers
• Licenced to run a
temporary storage warehouse (TSW)
• 250,000 teu annual handling capacity
• Expansion to 4 cranes and 1 million teu from 2020 onwards