Issue 32 Freight Tracks

FrT FEATURES 2023

In 2023, Freight Tracks issues will contain a series of monthly in-depth feature articles on rail freight business topics.

Our writers will look at the subject from different angles to give a 360o oversight. These will be perfect places for advertisements to reach your customers.

editor@freight-tracks.com

May

Rolling stock design

June

Rolling stock leasing

July

Automotive

August

EU rail freight

September

North American rail freight

October

UK & Ireland rail freight

November

Freight locomotives

December

Prospects for 2024

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Canadian Pacific Kansas City (CPKC) and Knight-Swift Transportation have agreed a new multi-year agreement to provide truckload intermodal transportation service on CPKC's new single-line north-south corridor connecting Mexico, the US and Canada. Knight-Swift is one of North America's largest and most diversified freight transportation companies, providing multiple truckload transportation and logistics services.

"This agreement creates compelling new transportation solutions for Knight-Swift's

current and future customers looking for optionality and increased capacity in their supply chains," said John Brooks, CPKC Executive Vice-President and Chief Marketing Officer. "As Knight-Swift transition their Mexico-U.S. traffic to CPKC starting in mid-May, we will focus on growth between Chicago, Texas and Mexico markets."

Knight-Swift's established Mexico customer base will be able to leverage CPKC's broad network of rail lines, terminals, and cross-border efficiency and expertise to improve service reliability and competitiveness.

A new multi-year agreement to provide truckload intermodal north-south corridor connecting Mexico, the United States and

CPKC AND KNIGHT-SWIFT INK MULTI-YEAR AGREEMENT

intermodal transportation service on CPKC's new single-line and Canada

"Our agreement with the CPKC will provide another differentiated solution for our customers and their over-arching supply chains," said Adam Miller, Knight-Swift Transportation CFO and Swift President.

"The Knight-Swift team is looking forward to engaging with the CPKC railroad on service offerings, customer solution design and demand planning to help facilitate growth on the first single-line railroad connecting Mexico, the United States and Canada.

"Our Transmex team and growing LTL offering will also benefit from the newly created

railroad and will allow us to continue supporting our customers in new and different ways by providing thoughtful solutions with a solid underlying service product."

CPKC's International Railroad Bridge over the Rio Grande River at the US-Mexico border at Laredo, Texas, offers a reliable alternative to congested highway ports of entry. A second span to expand the bridge's capacity and further increase the efficiency of cross-border train movements is currently under construction and expected to be completed by the end of 2024.

Sanctions, what

what sancations?

Russian railways play key part in boosting the country's economy in the face of increasingly ineffectual sanctions

BY JONATHAN WEBB

When the West imposed sanctions on Russia, following the start of the Ukraine war, it supposed that it would bring the country to its knees – instead it has sought out new markets – boosting its economy while western residents face crippling energy bills and a reduction in the standard of living.

Politically, Western governments are known to be uneasy about continuing to pump money into the conflict for fear that it will damage them at the polls.

This is especially evident in America, where there has been a rapid decrease in support among republicans.

Russia's defiance would not be possible without the aid of its rail freight network. Last year, eastbound rail shipments exceeded westbound shipments for the first time – with some 80 million tonnes heading east compared to 76 million tonnes heading west.

The figures being revealed by Russian Railways chairman Oleg Belozerov during a meeting with Russian President Vladimir Putin.

Such figures should come as no surprise, least of all to the European Union which has reduced Russian access to its markets – it does, however, illustrate just how much much Russia has pivoted towards Asia in only 12 months.

This in itself is a remarkable achievement.

This transformation has been made possible by the Trans-Siberian and Trans-Mongolian rail networks, which span from European Russia to the Russian Far

East port of Vladivostock and via the Mongolia spur, to China.

Trans-Siberian Rail Export Hub

The China-Russia increase in trade is no secret, but is often dismissed as being purely energy related. In reality, there has been a significant upsurge in China's non-energy trade with Russia too.

This has been particularly noticeable in the areas of agriculture, automobiles, plus raw materials such as metal ores and timber – which China needs to supply its ever-hungry and diverse manufacturing base.

The export of unfinished goods from Russia's Far Eastern Federal District to China, accounts for 91% of exports. Without this supply of Russian origin energy and ores, China would not be able to maintain its impressive production rates and this would in turn impact on the export of finished goods across the globe – including those western countries that have imposes sanctions on Russia.

2023 has already seen an increase in imports to China from Russia – the International Moneytry Fund believes that China and India will be this year's primary global drivers – adding significant freight traffic to the Russian rail network, which is linked with China at various points and new bridges.

In January this year Russia reported a 210% in crease in the export of soya to China – a commodity that is expected to see further increases this year.

The Vladivostock Maritime Export Hub

This massive seaport located on Russia's east coast has become of pivotal importance in boosting the Russian economy – being responsible for an ever increasing amount of trade with South Asia.

Regarded as a vital part of the Asian supply chain, Vladivostok is well connected by rail to vast swathes of Russia's heartland. Food products in particular have seen an upward trend in both imports and exports via the seaport. Imports of Vietnamese seafood have rocketed, as has the export of Russian pork to China.

Such is the demand for Russian goods in China, direct shipping services now operate between Vladivostok and Ho Chi Minh City. Vladivostok's excellent rail connections mean that Russian companies from across the country can reach the seaport relatively easily –opening up access to Asia's booming economy.

India is also proving to be a valuable trading partner with Russia, with Russia rising from 25th to 7th place in 2022 in relation to India's most significant trading partners – with it importing large volumes of Russian raw materials, vital for its ever growing economy. In addition to importing metal ores and timber, India is also a major buyer of Russian wheat.

Such a boom in business has led to plans to create additional warehouse facilities at the seaport. This is as a direct result of Russian freight flows pivoting from supplying Europe to supplying Asia.

In a separate move, Russia's railway operators are making robust strides to increase freight traffic using a new RZD Logistics service that travels along the 7200 km (4500 miles) International North South Transport Corridor (INSTC) through Turkmenistan, Kazakhstan and Iran from Moscow's Agrohub terminal.

RZD Logistics CEO Dmitriy Murev said: “We have been successfully cooperating with this terminal [Agrohub] for several years. It has proved a reliable and effective platform for enhancing exports from Moscow, and in the reverse direction. We have no doubts regarding the prospects of a new route via the INSTC, because of the increasing role of this corridor.”

First Beijing to Moscow freight service

A further boost to Russia's economy came on 16 March when the first freight train departed between Beijing

and Moscow. This marked the start of a new service of the China-Europe Railway Express, connecting the capitals of the befriended countries.

The train consisted of 55 40 foot containers, departing China at the Manzhouli border crossing, where it entered Russia and travelled to the country's capital. Goods on the train included car parts, building materials, home appliances, clothing and home furnishing. Trains take approximately 18 days to make the 5500 mile (8850 km) journey.

Post pandemic Russian railways was the natural choice for European companies wanting to send goods to Asia – especially as the pandemic had put pressure on shipping capacity and forced container prices to record highs. Shorter transit times, compared to sea, was also another advantage.

The Ukraine war put an end to such traffic almost overnight – with European businesses that want to use rail facing increased insurance premiums and the risk that their goods may be confiscated. "The insurers fear they wouldn't be able to enforce claims if loads are damaged or lost while in Russia.” according to Julia Pfeil, a partner at the Frankfurt office of the Dentons law firm.

CPKC announces multi-year Schneider deal

CANADIAN Pacific Kansas City (CPKC) has agreed a new multi-year agreement with Schneider National, a premier multimodal provider of transportation, intermodal and logistics services, to provide new single-line intermodal transportation service on CPKC's northsouth corridor connecting the United States and Mexico.

"The CPKC combination creates compelling new transportation solutions for Schneider's current and future customers looking for more reliability and increased capacity in their supply chains," said Keith Creel, CPKC President and Chief Executive Officer.

"Our team is eager to deliver truck-competitive services to Schneider on our newly-created, cross-border single-line network from Mexico into the United States.

"For many years, we've built trust with customers through our industry-leading east-west services across Canada and the northern US. We look forward to expanding that success to the vital north-south trade corridor on the newly-combined CPKC network," Creel added.

Schneider will transition their Mexico-US traffic to

CPKC starting in mid-May and will serve as an anchor domestic intermodal customer on CPKC's north–south flagship intermodal service between Chicago and all major destinations in Mexico.

Natural fit

Schneider's growing customer base will be able to leverage CPKC's broad network of rail lines and terminals. These services, supported by Schneider's drayage capabilities and expertise in the US and Mexico, will create service reliability in lanes that until now lacked single-line, truck-competitive intermodal options.

"It is a natural fit to pair CPKC's rail operating excellence and Schneider's superior dray execution to provide unparalleled service," said Schneider President and CEO Mark Rourke.

"Our 30-plus years operating in Mexico and broad portfolio of services will bring an intermodal service offering into and out of Mexico that is comparable to the speed and efficiency of shipping over the road, but with the added benefit of sustainability."

RAIL TRANSPORT: A ROADMAP

The first phase of the AERRL study on alternatives

THE conclusions of the study, launched by the Association of European Rail Rolling Stock Lessors (AERRL), Akiem, Beacon and Cargounit, with support from Crédit Agricole CIB, ING, KfW IPEX-Bank and Societe Generale, show that the entire rail sector needs to design a common strategy to address the challenge of transitioning from fossil diesel. AERRL is proud to share an initial roadmap of technology alternatives for the years to 2050, based on results of a study conducted by eolos.

In terms of climate challenges, the European Commission’s Green Deal sets a clear target: by 2050, transport emissions must fall by 90% compared to 1990 levels. Responsible for less than 1% of total European CO2 emissions, rail is part of the solution and is committed to growing its market share.

Indeed, freight traffic is forecast to rise 100% by 2050. But rail also needs to design a process for phasing out diesel fuel if it is to remain the most sustainable form of land transport.

Launched in July 2022 and carried out by eolos, an industrial consulting company that helps the rail sector to embed environmental sustainability into business operations, the study examines the EU regulatory framework and certain national strategies, providing a preliminary assessment of technology alternatives.

The qualitative and quantitative research –including extensive stakeholder consultations and workshops with AERRL members – produced unique insights into technological maturity as well as infrastructure and supply chain readiness.

Green production

Extract from the report AERRL Study on Alternatives to fossil diesel use in railways, December 2022: “While electrification remains the most efficient solution from a holistic perspective, complementary solutions can help to accelerate decarbonisation. HVO is rated as an immediate candidate.

It can reduce CO2 emissions by 85 to 90% and is easy to implement.

Obstacles due to higher taxation can and should be adjusted by future regulation. RNG and Ammonia ICE are considered short- to medium-term options, though several operational challenges remain. Hydrogen has a high energy density (per kilogram), but "green production" is still very limited and requires high expenditure. It is an option for applications where no other solution is available (such as long non-electrified routes) and after substantial infrastructure improvements are achieved. Though major problems remain, battery technology is a solution for the rail sector.

ROADMAP FOR DECARBONISATION

to

supply chain, the rail sector can increase its freight market share and provide safe and reliable low carbon-emission energy to today’s most emissive industries.”

Fabien Rochefort, AERRL chair, says: “An ambitious and aligned roadmap for near-term decarbonisation is currently the missing link in European policy. HVO can contribute very easily to short-term decarbonisation of existing diesel-powered fleets. Battery-electric technology seems to be a likely game-changer for the medium and long term. Hydrogen, and potentially ammonia, could be later alternative solutions for heavy freight trains where infrastructure electrification, even partial is not available and batteries not suitable. Working from this initial roadmap, we hope to hold further discussions, leading to a common project with all rail stakeholders and pushing policy makers to support our willingness to promote green transportation furthermore.

Carole Coune, AERRL secretary general, adds: “Our webinar on 4 May is the first step in a process we hope will lead to a common roadmap, supported by a deliverable action plan. We believe that decarbonisation of rail rolling stock should be on the sector’s policy agenda for the coming years, but also on its research agenda.

Especially Dual-Mode battery/electric trains combined with partial electrification for the longer term could become a game-changer.

To enable the sustainable transition of the rail sector, the different stakeholders need to come together in a “freight transport system for efficiency” organised either by the Commission or an appointed actor in the field. The investments between rolling stocks and infrastructure need to be balanced.

To achieve maximum leverage for industrial decarbonisation, the rail sector should be, after pipelines, the first choice for green hydrogen transport. With such a position in a new

"The game-changing possibilities of battery-electric technology should be prioritised for further study because of the positive impact for the future of rail rolling stock and infrastructure.”

Robert van Duuren, ING, representing the supporting banks, concludes: “The banks have supported this initiative by rolling stock leasing companies because we share their determination to continue to drive down emissions in the rail industry.

"We anticipate a combination of solutions will be needed to make progress in the real world, and I therefore find it interesting that the study describes multiple alternative technologies. We hope this initiative will motivate many actors to begin their transition.”

fossil diesel use in railways is now at an end.

BECAUSE NOT ALL FREIGHT ON A TRAIN MOVES IN A BOX

SAR INVITES EXPRESSIONS OF INTEREST FOR 900 TANK WAGONS

will be increasing its wagon fleet by, in the order of 10,000 freight wagons by 2030. SAR is actively working on enhancing local content and manufacturing and will give preference to supplier proposals, which include and present a plan to build/assemble wagons in the Kingdom of Saudi Arabia, making this a significant aspect of the assessment process. The suppliers will also be asked for long-term maintenance agreement of the Wagons’ fleet. The terms and duration of the agreement will be agreed at the contract stage.

The contract is expected to be awarded to the preferred supplier in Q4 of 2023, with the release of the tender being as soon as June 2023.

The first batch of wagons is expected to be delivered in Q1 of 2026.

Saudi Arabia Railways (SAR) also invites expressions of Interest for mainline locomotives

Saudi Arabia’s national railway company, Saudi Arabia Railways (SAR), has called for expressions of interest for supplying 25 mainline locomotives with options for additional locomotives. The locomotives will be primarily used for hauling tank wagons, with the target performance of hauling up to 140 tank wagons with four linked locomotives.

In line with the Kingdom’s Vision 2030, continued rail growth in the country has led to a requirement for additional freight rolling stock and, as a result, the Saudi network will be increasing its locomotive fleet size to support expanding demand in the country and the wider region. SAR is actively working on enhancing local content and manufacturing, and will give preference to supplier proposals, which include and present a plan to assemble, repair, and overhaul locomotives in the Kingdom of Saudi Arabia, making this a significant aspect of the assessment process. The suppliers will also be asked for long-term maintenance agreement of the locomotives’ fleet. The terms and duration of the agreement will be agreed at the contract stage.

The contract is expected to be awarded to the preferred supplier in Q4 of 2023, with the release of the tender being as soon as June 2023. The first batch of locomotives is expected to be delivered in Q1 of 2026.

SAUDI Arabia’s national railway company, Saudi Arabia Railways (SAR), has called for expressions of interest for designing, building, and supplying approximately 900 tank wagons for the transportation of molten sulphur and merchant grade acid.

In line with the Kingdom’s Vision 2030, continued rail growth in the country has led to a requirement for additional freight rolling stock and, as a result, the Saudi network

GB Railfreight invests in two new health

GB Railfreight (GBRf), operator of rail freight service across the UK and employer of over 1,300 staff, is pleased to announce the opening of new health and wellbeing centres in its London and Doncaster offices.

GBRf aims to be the safest and most supportive rail freight business in the industry. Today’s announcement delivers preventative, convenient healthcare for all employees helping to create a safer, healthier and happier work environment.

The centres cost £22,000 to build and are equipped with the latest technology to check hearing, vision, blood pressure, and complete electrocardiograms (ECGs) as part of GBRf’s industry-leading health and wellbeing onboarding for all Train Managers and Rail Operators.

The same health checks will also be offered to all existing drivers as part of their annual checkup, and will be made available to HQ staff undergoing their Personal Track Safety training. All medical tests will be overseen by GBRf’s Chief Medical Officer, Dr Manuel Fernandes, who brings with him over 30 years of medical experience.

Health & Wellbeing is core to GBRf’s sustainability strategy. The introduction of two new will deliver the important

checkups needed to ensure the health and safety of GBRf’s frontline staff are supported and prioritized, confirming they are fit to operate locomotives and ultimately decreasing the number of accidents caused by ill health.

John Smith, CEO of GB Railfreight, said: “We’re delighted to be delivering further on our commitment to the health, safety, and wellbeing of our employees.

“The introduction of these two medical centres is about more than just new healthcare facilities – it signals our continued commitment to keeping the physical and mental wellbeing of our employees at the forefront of what we do –ultimately protecting our pople and our services.

"We have intentionally invested in providing accessible, convenient healthcare solutions that make it easier for all staff to receive the medical attention they want.”

Dr Manuel Fernandez, Chief Medical Officer for GB Railfreight, said: “These new centres provide state of the art equipment allowing us to bring more preventative medical care in house than ever before. This means reduced waiting times, greater convenience and more flexibility for our people – helping to put them in the driver’s seat of their own health and wellbeing, no matter what journey they’re on.”

health and wellbeing

India report

The formation of a South Asian Rail Agency : more than a pipe dream?

RAILWAY EXPERT AND COMMENTATOR

Lalit Chandra Trivedi

THE European Union Agency for Railways ( ERA) based in France, is helping to integrate European railway systems by making trains safer and able to cross national borders without stopping.

Since 2006, the ERA has worked to develop economically viable common technical standards and safety measures and targets in co-peration with the rail sector, national authorities, EU institutions and other bodies; reported on rail safety in the EU; and, led efforts to create uniform signalling standards throughout Europe.

The map of British India Railway shows the rail network connectivity that existed in British India which largely comprises today’s South Asia. Major cities in Pakistan and Bangladesh were having through connectivity. With Kabul in Afghanistan close to Peshawar, Kathmandu capital of Nepal close to Raxaul in Bihar and Ledo (where Lord Mountbatten commanding officers of the British Indian Army were based) in Nagaland and south east tip of Bangladesh Rail network at the door step of Myanmar

Lots of additions to this rail network post-independence have taken place in all the countries. If ERA type coordination forum for a rail system connecting old British India rail network system is revived it will be a major booster to trade among countries of Indian subcontinent. During

British rule in India. the whole rail network of these countries, in spite of belonging to several private and government companies, used to be governed by a single central authority with uniform codal provisions.

If Myanmar Rail network gets connections to Pakistan via Bangladesh and India with feeder lines to Nepal and Afghanistan sub-continental trade will get a major boost paving the way to ultimate rail connectivity from Hanoi in Vietnam to Istanbul in Turkey.

In fact if the rail network at Rameshwaram in Tamilnadu is connected via a 20 km rail cum road bridge with the Sri lankan network, then the Indian subcontinent too can boast of rail union as it exists in European countries.

Similar advantages can be reaped in our subcontinent too. Like Euro Rail pass a similar authority can be made available to permit seamless travel among subcontinental countries .

Some may call it a pipe dream based on the geopolitical situation of today. These people only need to peep into pre-holocaust days of European continent when enmity level among European countries were at a peak.

Today, the same countries have formed a formidable seamless rail network helping the Eurozone economy to forge ahead.

'Robust infrastructure' key to new DP World launches double-stack train services from Mundra

DP World, a leading global provider of smart end-toend supply chain, has launched a new double-stack freight train facility to improve efficiencies and connectivity between its inland terminal at Ahmedabad and the Mundra port.

The maiden train was flagged off from Mundra in early April with a full payload.

The double stack train service will further boost the connectivity of Ahmedabad and will drive better efficiency and significantly lower the overall logistics cost for cargo movement on the route even with fewer rakes, owing to the lower haulage rates and lesser or zero port ground rent (PGR) resulting from the faster evacuation of containers from the port.

Speaking on the launch of the new service, Adhendru Jain, CEO Rail and Inland Terminal, DP World Subcontinent said, “Robust infrastructure and efficient logistics are crucial for boosting economic growth and exports.

"We are committed to strengthening our supply chain and enabling seamless connectivity to help our customers move their goods quickly and reliably to global and domestic markets. The new double stacked rail freight service will boost cargo carrying capacity substantially and will open new markets for MSMEs in and around Gujarat by leveraging DP World’s world-class integrated multimodal logistics infrastructure.”

Situated about 40 km from Ahmedabad, DP World’s Ahmedabad Inland Terminal is well-connected to the state highway and the rail network.

It has a container handling capacity of more than one lakh TEUs per annum, and it offers a host of services and features, including a customs-notified warehouse, inventory management services, and specialised equipment to handle steel cargo.

The terminal follows global safety standards and offers several value-added features such as a container repair facility and electronic weighbridges.

intermodal servuice ex Mundra

Mundra port to its Ahmedabad

Inland Terminal

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