Denis Moskalev, head of Kaliningrad Center for Corporate Transport Services of Russian Railways: “We should look for competitive advantages”

Being an exclave, the Kaliningrad region is one of Russia’s most sensitive districts in terms of transport. Lithuanian Government has recently threatened with blocking of that western region. Denis Moskalev, head of Kaliningrad Center for Corporate Transport Services of Russian Railways OJSC, tells IAA PortNews about the situation with cargo transportation in the region.

- Mr. Moskalev, how much cargo has Kaliningrad CCTS handled in 2013?

- As for loading to the Kaliningrad railway, we had a growth of 6.2%, year-on-year, with our own loading having increased by 13.2% (as of the end of the 10-month period).

However, we saw a decline in loading of export cargo bound for Kaliningrad port complex. In the 10-month period, transportation by Kaliningrad railway towards port complex fell by 3.5% to 4.64 mln t. The decline should be attributed to lower volumes of oil products (-17% to 2.92 mln t). However, other cargoes demonstrated positive dynamics – coal transportation climbed by 33.8% to 110,600 t, coke – by 44.3% to 232,000 t, ferrous metal – by 18.1% to 1.11 mln t, fertilizers – by 38.4% to 124,700...

- What is the situation with containerized cargo and automobiles?

- We expect slight decline of automobile loading which should be attributed to the situation in the sales market. However, container transportation is to increase by 39.5%.

We also work on transportin automobiles according to an approved schedule with guaranteed dispatch and arrival time. The negotiations are currently in progress. 

Besides, we get automobile components in containers arriving via the border checkpoint. The trend in this sector is the same as in the automobile sector.

Import containers with components also arrive via the port (but the railway does not work with them).

We are developing one more activity: on November 19 we resumed dispatching container trains to Moscow. In 2006 it was running under the name of Mercury. It is important for us and TransContainer (train operator) to demonstrate stable and regular service and to attract import transit here. It will be possible as Saint-Petersburg is overloaded today. We consider different variants having started with Alco-Naphta as our anchor client. For the moment being, we plan to dispatch this train every 10 days. The first train carried 82 TEUs.

- How do you explain the decrease of loading towards the port complex?

- The decrease was caused by the reduction of oil product export due to amended legislation which is now focused on encouraging of internal refining. So we have lost certain volumes of heavy fuel oil. Besides, on January 1, Russia joined the WTO and had to cancel a number of coefficients earlier applied for directions towards the Baltic ports. Therefore, some oil products were lost because of that. However, the main factor is the economic situation in Europe.

Port Kaliningrad specializes in transshipment of small batches bound mainly for Europe. Amid certain economic problems in EU we saw a consequent decline of transportation towards the port complex. The year of 2009 was characterized with a drastic fall with certain recovery in 2010-11 and further decline in 2012-13. 

Of course, there is a factor of rates set forth by Lithuania. The cost of transportation expressed in tariff per tonne-km it is in some cases is 3 times as high for us.

Besides, last years have seen partial loss of cargoes in favor of Ust-Luga and Vysotsk with a shorter transport run and absence of transit territories. Moreover, Kaliningrad has a limited depth of the approach canal and therefore it cannot only handle vessels with limited displacement. 

- Which cargoes enjoy decreasing coefficients in 2013?

- In 2013, such a coefficient was applied to transportation of ferrous metal. Besides, railways of Lithuania and Belarus are quite flexible and a ready to provide discounts if it is economically efficient. Unfortunately, Russian Railways is under stricter regulation and we cannot be flexible enough.

- What do you think about the future development of railway-ferry complex in Baltijsk as an alternative cargo canal without crossing the transit countries?

- In our opinion, it is an alternative and a certain instrument to regulate our relations with Lithuanian and Byelorussian colleagues. This instrument helps us in our negotiations on tariff component.

- What cargoes can be transported by Kaliningrad region by ferries?

- Potentially it can be containers and automobiles. However, certain discounts are now applied for road transportation and today it is not profitable. 

As for other cargoes, ferries transport vegetable oils of different companies.

- What is the stage of the project on introduction of digital signature?

- With port infrastructure featured by certain limits it is important to look for competitive advantages. In this context, it is would be good to use e-documents. However, there are transit territories and the documents should be acknowledged at all sectors of the route, otherwise it is meaningless. The legislations of the Europe, Russia and Belarus should be taken into consideration. It is a challenging task and Russian Railways is working with this. 

- What about unification of IT systems applied by the railway and port Kaliningrad?

- We try to work out the creation of a unified data exchange system. Unfortunately, Russian Railways and the port are regulated by different normative documents and that entails lots of problems. Last month we established a working group which is to find a technological solution so that their systems could see arriving trains and we could get information about approaching vessels. That would let us save time and minimize costs. It is difficult to say when this work is to be fulfilled. 

- What are your forecasts as regards transportation volumes in 2014?

- We hope for certain growth in Europe. In case of a considerable growth we count on higher cargo flows. As for our own loading, the volume of cargo produced by domestic manufacturers is growing. Besides, we participate in arrangement of container trains which also to facilitate the growth.

Interviewed by Vitaly Chernov