International Container Forum ESC Asia-2024

International Container Forum “ESC ASIA - 2024”

On April 24-26 in Almaty (Republic of Kazakhstan), in the congress center of the hotel “RIXOS 5* Almaty”, the International Container Forum “ASIA - 2024” was held, organized by the United Network of Forwarders (UNF) in partnership with the Royal Institute of Logistics and Transport CILT Central Asia. The event was attended by more than 300 delegates from different countries, including Russia, Kazakhstan, China, Uzbekistan, Kyrgyzstan, Tajikistan and others. The business program, the key topics of which were the issues of formation and expansion of trans-Asian transport corridors, actual directions of container transportation development in the post-Soviet space and prospects of transport integration of Asian countries and Russia, consisted of three days. We share with you the brief results of the forum.

On the first day of the forum there was a field trip to the transport and logistics center “Zhetygen”. This is a modern technological container terminal of Istkomtrans LLP, located 30 km from Almaty. The participants of the tour were told about a wide range of opportunities for export, import and transit transportation on the basis of TLC, the history of the terminal and plans for its further development.

On the second day, the international conference “ASIA-2024” was held, which could be followed online. The key topics for discussion were economic prerequisites for transport integration in Russia-Asia, transport policy of regional states, opportunities for cooperation; potential of countries in the development of container logistics, realization of transit potential of Central Asia and others.

Daria Yelfimova, the Director of the EEU Forum, addressed the conference participants with a welcoming speech. She noted the demand for the forum and the relevance of the announced topics. “It is very pleasant to see at the forum not only our regular participants, but also a large number of new companies, representatives of the Republic of Kazakhstan, Central Asian countries, China,” she said.

The conference began with the panel session “Global Containerization”.  It was moderated by Yerkhat Iskaliev, chairman of the subcommittee of transport logistics and transportation of Atameken NPP, member of the presidium of the Union of Transport Workers of Kazakhstan “Kazlogistics”.

“Today it is important that we all, the CIS countries, move in a coordinated way. The trend should be observed. So that all countries, all players only make money on it. My favorite expression: there is no competition of countries, types of routes, types of transport. There is only competition of logistics products. I think each of the players is trying to create these products, but they are not made without some kind of collaboration,” said Yerkhat Iskaliev.

The opinion that the global market of container transportation is undergoing changes and going more into the regional market was confirmed by Timur Karabaev, Chairman of the Board of PTC Holding. “It is no secret that you and I are facing serious global challenges. The trends of today's geopolitics, economic development of many countries have changed a bit. Those routes that have been working there for decades are no longer working or are working with major failures. We are witnessing a decline in the global trend of cooperation in the world economy. The world has begun to divide into yours and ours, into friendly and unfriendly countries. And this has had a very strong impact on logistics. In our understanding it is necessary to develop trade relations in any case", - he said, noting that ‘global containerization, in particular, Kazakhstan, has not even passed the middle’.

The topic was further picked up by Vyacheslav Sarayev, General Director of JSC “Russian Railways Business Asset”. “The level of containerization is probably quite low both in Russia and Kazakhstan. And there is definitely something for all of us to seriously work on together. We stand, let's say, at the very beginning of the way, despite the fact that containerization and container transportation is the fastest growing segment of railway transportation. We, our colleagues and our partners have a lot of plans for containerization, so I urge everyone to invest actively in this direction”.

The next speaker was Alexander Kakhidze, General Director of LOGOPER LLC. He expressed the opinion that Russian business despite external pressure actively cooperates with partners from other countries, it succeeds due to consensus and compromise. “Container transportation is the most dynamically developing market. And today, no matter what difficulties we have with all transportation, still containers are the driver and are growing. We find consensus, and where we don't find consensus, we try to find compromises”.

In turn, Alexey Radchenko, Chief Operating Officer of FESCO TG, spoke about market prerequisites for the development of CIS countries in the containerization segment. He noted that the CIS countries have a high potential for containerization, as the structure of production in these countries is focused on non-raw materials products, most of which are suitable for transportation in containers. In addition, this potential will be supported by the projected sustainable economic growth of the CIS countries in the period up to 2025.

Deputy General Director for Commerce and Development of LLP “Istkomtrans” (Republic of Kazakhstan) Victor Ivanov predicted that in 2024, transportation in containers in all directions in Kazakhstan will be about 2.3 million TEU. Also in the horizon of two years will add about 150 thousand TEU container transportation of export products of agro-industrial complex, primarily in the countries of Southeast Asia and China.

The speakers also discussed in detail the issue of infrastructure deficit and tariff formation. In particular, Timur Karabayev noted that Kazakhstan continues to lack logistics assets. Many transportation companies today began to make a serious bet on assets in the field of logistics: terminals, rolling stock. “I think that over the past five to seven years and in Kazakhstan built a lot of terminals. But, nevertheless, logistics assets continue to be in short supply,” he said. - Sometimes we record a deficit in rolling stock, equipment. And, unfortunately, today there is a huge deficit of warehousing capacity in major regions of the country”.

The second session “Transportation Integration of Russia - Asia” continued the international conference “EEU ASIA-2024”. It was held in a question-and-answer format. The moderator of this session was Marianna Ozherelieva, industry journalist, analyst and TV presenter of Russian Railways TV. The speakers discussed several topics, in particular, the main factors contributing to the growth of freight transportation by rail and priorities in the development of railroad infrastructure of international transport corridors, as well as the prospects of debottlenecking in transit through Central Asian countries.

Zeinollah Akhmetzhanov, Deputy Director of the Department of Transport Policy and Infrastructure of the Ministry of Industry and Infrastructural Development of the Republic of Kazakhstan, shared the results of transit rail transportation through Kazakhstan. “A total of 32.3 million tons were transported. Of these, 5 million - by road transport, this is a very important and record-breaking figure, 27.3 million tons were transported by rail. Transit has shown very good results, and here we see growth and prospects,” he said, noting that 13 international transit corridors pass through Kazakhstan, of which 5 are railroad and 8 - road. According to Zeinollah Akhmetzhanov, the impetus for even greater growth in transit rail transportation will be given by the creation of infrastructure. The discussion included the construction of additional railroad tracks on the Moyinty - Dostyk branch, adjacent to the Alashankou border crossing on the border with China.

Anthony Chong, Vice President of ISACO Group, spoke about the problems in sending container trains from Europe to China. “We cannot say that we are achieving a good rate. In general, we should say that the container train Europe-China meets with special problems - there are some sanctions, restriction restrictions. If this trend does not change, plans have to be adjusted. If we meet such a problem, for example, in relation to Russia, in relation to the Far Eastern ports, I mean the container train Europe - China, including the railway network of the Republic of Kazakhstan or the bypass route through the port of Bandar Abbas - it is not a global problem.  In any case, the goods are like water, it must necessarily find its way, and it will definitely be delivered,” he said.

Radjabmurod Odinaev, head of the transportation department of the Tajik Railway, said the partner countries are trying to work in the same strategy. To avoid train idling, it is necessary to adhere to common criteria. As the speaker emphasized, there is no train idle time in Tajikistan, “because with Uzbek colleagues clearly developed technological process, interaction and order of acceptance of wagon transfer."

General Director of Temiryulkargo JSC Abdusamat Muminov said that road transportation in Uzbekistan has multiplied. “In 2023, about 100 million tons of cargo passed through Uzbekistan's railroads, of which more than 50% are intra-republican cargoes. We have more than 12 million in transit. This is plus 10% in relation to 2022,” he said. - However, road transportation has become a competitor to railway transportation. The overflow of cargo from railroads in Uzbekistan is due to the door-to-door nature of road transportation. High-liquidity cargoes went by road, while cargoes with average value remained on the railroad.

Volumes of railway transportation in Kyrgyzstan in 2023 amounted to 9.3 million tons, which is 16% more than in 2022. Russia, Kazakhstan and China are the main partners of Kyrgyzstan. Dastan Usubakunov, Deputy General Director of Kyrgyz Temir Jolu NC, told about it. He noted that the key request for the business community is accelerated terms. This criterion allows to increase the cargo flow as well. The speaker reminded that Kyrgyzstan, China, Uzbekistan and Afghanistan signed an agreement on the development of multimodal route China - Kyrgyzstan - Uzbekistan - Afghanistan. The term of cargo delivery along this corridor under the project was set at 14 days, but thanks to the efficiency of the national railroad administrations, it was reduced by 9 days.

The speaker sees prospects in the development of multimodal transportation and in the development of domestic infrastructure of the countries. We plan to start construction of the China-Kyrgyzstan-Uzbekistan railroad. This will be the southern branch of the Trans-Caspian Bridge. It will give a big stimulus for Kyrgyzstan's access to seaports.

The speakers also highlighted the factors that constrain the growth of transportation in the Eurasian space and in the countries of Central Asia. First of all, it is the lack of container terminals, the shortage of rolling stock, as well as containers of various modifications, the production of which can be launched in the CIS countries.

Among the drivers of growth in containerization and the market as a whole, the experts highlighted digitalization, investment in rolling stock, and expansion of logistics centers.

The third, practical session was called “Railway transportation and customs declaration. Actual tasks and practical solutions”. The session was moderated by Alexander Ovanesov, Managing Partner of Arthur Consulting.

Opening the session, Alexander Ovanesov spoke in detail about the shifts in the structure of Russia's trade turnover with different countries against the background of the geopolitical situation. In addition, he dwelt in detail on the significant barriers to trade and logistics potential of the CIS and Central Asian countries, one of which he called infrastructure deficit.

Larisa Korshunova, Director for Interaction with Public Authorities of OTLC ERA JSC, shared her opinion on this matter. “We always talk about infrastructure, its finiteness and the fact that infrastructure does not always keep up with volumes. As a rule, experts say that to be able to develop flexible supply chains, to be able to respond quickly to the challenges that occur periodically, to these “black swans” that arrive periodically, the infrastructure must have a 20% plus margin. In order to be able to operate safely in the directions that the economic situation requires,” she said. - We have a task to use this infrastructure as efficiently as possible - it is to increase the level of technological efficiency of various operations, from which, in fact, any turnkey transportation and any transport and logistics service is built”.

The conversation was continued by Nikita Zhukov, Chief Operating Officer of PTC Cargo. He noted that Russia has excellent examples of infrastructure development, and not only transit infrastructure, but also terminal infrastructure. “These are TransContainer and Logoper, which are developing infrastructure across the entire space, across the entire infrastructure of Russian Railways. Still, a specialized container terminal is the entrance to this market. No terminal - no containerization”.

Daniyar Duisemaliev, Managing Director of TIS Service, noted that digitalization and the introduction of paperless technologies are linked to increasing the efficiency of customs control. The speech was also about national cooperation. “We need to agree on common standards and then move to digitalization,” he stressed.  

Problematic issues on customs legislation of the CIS countries are becoming less and less. This is the opinion of Nurlan Bainazarov, Deputy Director of the EEC Department of Customs Legislation and Law Enforcement Practice. In the EAEU space, the level of digitalization on customs declarations is 90%. “This shows that national customs administrations are working in a positive way. The most important thing is that goods do not stand at the border. This is the results of digitalization - seamless document flow on a larger perimeter,” he said.

He also touched upon the issue of tariffication of services of national customs operators for tracking navigation seals and related information integration solution.

Dauren Mustafin, Deputy Head of the Department of State Revenue for the city of Almaty, in turn, noted that the current trend is to speed up the passage of goods through border checkpoints. This is facilitated by modernization of customs checkpoints, automation of information processes, and updating of customs infrastructure.

The speakers of the third session came to the conclusion that while CIS countries develop digital technologies separately, each has its own systems, and there is no single end-to-end standard for document exchange, so now this component is at the top of the agenda.

The program of the third day of the business program included a study tour “Altynkol-Khorgos border crossing”. The tour participants visited Altynkol station, Nurly Zhol checkpoint and KTZE-Khorgos Gateway dry port.

The forum partners were PTC-Holding TOO, Istkomtrans LLP, TIS service LLP, VAY GROUP JSC, KEME Company LLP, ISACO GROUP, GE Logistic LLP, Innovations in Logistics.