HomeMediaLatest NewsThe Kemerovo authorities and Russian Railways did not agree on the cargo transportation figures

The Kemerovo authorities and Russian Railways did not agree on the cargo transportation figures

10 November 2023

Titov Alexander V. Head of the Global Oil Market Sector, Energy Department

Alexander Titov, Head of the Global Oil Market Sector at the Energy Department of the Institute for Energy and Finance, commented on the prospects for coal transportation through the Eastern Landfill to MASHNEWS portal.

The expert associates the friction between the Kemerovo region authorities and the Russian Railways management regarding the volume of supplies with high competition at the Eastern Landfill.

Now shippers of all industries are trying to export their goods from ports and border crossings of the Far East, closer to the end consumer, Titov explains. This will significantly reduce the transport leverage, because otherwise it is necessary to transport these goods by sea, which significantly increases the cost of logistics.

"For coal miners, now the difference between the price of coal in the Baltic and the Far East is $35-40/ton or 1/3 of the price. Therefore, they strive for the Eastern landfill, announce rather high production and loading plans in order to beat out a higher quota for themselves," Alexander Titov adds.

And he draws attention to another aspect: for Russian Railways, coal cargoes have the lowest profitability of transportation compared to metal, ore, timber, petroleum products and cargo in containers.

One of the most relevant topics for discussion in Kuzbass is alternative coal export schemes from the region.

"Alternative methods are shipping from the ports of the Baltic and the Azov-Black Sea basin, but it is much more expensive. There are options for delivery via land border crossings to China directly or through Mongolia, but the volumes cannot compete with ports yet. Also, border crossings have their own difficulties with infrastructure and the fact that the main consumers of Russian coal in China are located near ports in the Southeast," Alexander Titov lists the options.

Therefore, Russian Railways constantly talks about the desire to give preferences to higher-margin goods (both for export and import/transit). This is namely what causes controversy.
Titov Alexander V. Head of the Global Oil Market Sector, Energy Department
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