Commenting on the beginning of Lithuania's presidency of the European Union last year, the director of the Institute of Political Analysis and International Studies, Serhii Tolstov, said that Vilnius was very interested in the signing of the EU-Ukraine Association Agreement because it was lobbying for the Viking international container train project (which runs between the Ilyichevsk seaport and the port of Klaipeda). According to him, the Lithuanians are linking the Viking issue specifically to European integration of Ukraine.
Ukraine signed the association agreement with the European Union in 2014, but it is too early to say that this has resulted in an increase in the cargo turnovers of international container trains. On the contrary, the Viking train’s cargo turnover is falling. Since the association agreement between Ukraine and the European Union also contains a provision on development of combined and multimodal transport, we can expect an increase in the container turnovers of the trains in the near future. However, Ukraine needs to regulate this mode of transportation and bring it into line with European standards.
A general increase in total freight turnover According to the State Railway Administration (Ukrzaliznytsia), container and combined trains transported 44,200 containers on all kinds of routes in the first half of this year, which is 7.9 percent more than they transported in the same period of 2013. Most containers were transported domestically – on the Nikopol-Ilyichevsk-Nikopol route (9,104 containers, which represents an increase of 96.3 percent). Internationally, trains increased container transportation on the Slovakia-Russia route (7,824 containers or an increase of 17.3 percent), and the Romania-Russia-Romania route (7,224 containers or an increase of 82 percent).
For the other international trains, Ukrzaliznytsia does not publish comparative figures for turnover. However, according to Vasyl Zubkov, an adviser to the president of the Plaske transport company, the cargo turnovers of the two most prominent international container trains – the Viking and the Zubr – fell by 40 percent and 60 percent, respectively, in the first seven months of this year.
According to him, the main reason for the fall in the freight turnovers of the container trains is economic decline. Another reason is the reform of the railway rolling stock management system, which resulted in the disappearance of the so-called inventory rolling stock and the general fleet. The entire railcar fleet became private. This was attributed to external factors – a game change on the market. However, the main argument was the fact that the fleet was worn out and needed repair. According to Zubkov, this measure did not yield a commercial effect or result in repairs. However, the simple transfer of the fleet from one state to another resulted in a 50-percent price increase for cargo owners because of the appearance of "layers" in the chain of reception and use of railway rolling stock.
The collapse of the Viking and the Zubr 2012 was the most productive year for the Ukrainian side in the Viking international project. According to Zubkov, until then a train departed only after accumulation of 15 platforms. However, since January 2012, trains began departing twice a week regardless of the number of platforms, as a result of which the train’s freight turnover increased. The train began operating regularly three times a week from mid-February 2012. However, the Viking train’s freight turnover reduced by more than 11,000 TEU or 22.4 percent to 38,173 TEU in 2013. The margin of this reduction in freight turnover exceeded the margin of the reduction in 2012, when it reduced by 6,750 TEU or 12.1 percent. Since then, the margin of the reduction has only increased - the freight turnover of the Viking train reduced by about 40 percent in the first seven months of 2014.
The period of delivery of a container from Klaipeda (Lithuania) to Turkey will be eight days (through Bulgaria by land) or 10 days (through the offshore segment), and the cost of delivery will be EUR 1,700
Representatives of the Lithuanian Railways also note the fact that the Viking train’s freight turnover has reduced. However, according to Simas Garuolis, an advisor to the director of the Lithuanian Railways’ freight transportation directorate, Lithuania expects the Viking train’s freight turnover to also increase as a result of Bulgaria joining the project last year.
In addition, Garuolis said during the 2014 Black Sea Container Summit that the Viking train was expected to transport the first trial batch of containers to Turkey in September. The batch is small (10 containers) and it is intended for testing the route. The head of the directorate’s tariff department, Vladas Ambrozevičius, said that the period of delivery of a container from Klaipeda (Lithuania) to Turkey would be eight days (through Bulgaria by land) or 10 days (through the offshore segment) and that the cost of delivery would be EUR 1,700.
"Ukraine, for its part, has long been promoting the idea of adding Turkey to the Viking train project through the sea, via a direct rail ferry service to Turkey," said Zubkov. "Unfortunately, despite the fact that Turkey is the most rapidly developing country in the region, it has a high level of bureaucracy. Suffice it to say that an intergovernmental agreement on a direct service was signed as far back as January 2011."
Transportation of containers via the Zubr international train has been taking place for only two years. Its direct competitor is the train Viking train, which has been running through Ukraine since 2003. However, despite the fact that Ukraine joined the Zubr train project relatively recently, it still had a promising freight turnover in 2012, and Ukrzaliznytsia expected the freight turnover to increase further. After Estonia and Ukraine signed the protocol on joint development of a corridor between the Black Sea and the Baltic Sea, the Ministry of Infrastructure’s former head Volodymyr Kozak said he expected the freight turnover in this transport corridor to increase by 50-60 percent in 2014. However, the situation turned out to be the exact opposite – the freight turnover of the Zubr train fell by about 60 percent to 1,253 TEU in the first seven months of this year, compared with the corresponding period of 2013.
The prospects against the EU backdrop Against the backdrop of the signing of the Ukraine-EU association agreement, container transportation by rail is an important area of development for Ukraine. Rail transport is being stimulated in Europe because of its environmental impact and its higher energy efficiency compared to road transport, among other things. Definitely, this was also the reason for such rapid development of containers transportation by rail. This helps to relieve the load on automobile roads and reduce the number of traffic jams in densely populated port and industrial areas. In addition, transportation of containers by road is restricted by weight and time periods in many European countries.
The association agreement that was signed between Ukraine and the European Union contains a provision on development of combined and multimodal transportation. However, Ukraine needs to regulate this mode of transportation and bring it into line with European standards.
To attract additional cargo volumes, Ukrzaliznytsia introduced a 20-percent discount on the rates for transportation of large-tonnage import/export containers through the territory of Ukraine on Viking and Zubr trains in 2014. In addition, the common reduced rates that are used in conjunction with the other participants in the project (the railway administrations of Belarus, Lithuania, Latvia, Estonia, Moldova, and Bulgaria) have been prolonged.