Mongolia, a landlocked country between PRC and the Russian Federation, relies heavily on Corridor 4 for trade, with a strategic emphasis on the Zamiin-Uud–Erenhot rail and road crossing. Rail is the dominant mode for long-haul freight, particularly on the Tianjin–Ulaanbaatar corridor, while road transport supplements with time-sensitive trade shipments. Zamiin-Uud is the busiest BCP in Mongolia, and suffers from chronic congestion and limited transshipment capacity.
Cross-border shipments remain constrained by infrastructure bottlenecks, outdated cargo-handling equipment in Ulaanbaatar, and Mongolia’s dependence on Tianjin Port. Although the road BCP at Zamiin- Uud was upgraded in 2023, rail capacity remains a serious concern, with only 7 trains processed per day compared to 20 at Erenhot and 45 at Tianjin Port.
TFIs underscore this imbalance: road TFIs improved significantly in both time and cost, with TFI1 falling by 50% and SWD speed more than doubling. By contrast, rail TFI1 and TFI3 surged, with inbound clearance times tripling and costs rising due to delays and handling fees. SWOD for rail declined sharply to 14 km/h. To maintain trade reliability, Mongolia must expand rail capacity, diversify port access, and strengthen multimodal integration to balance road gains with rail reform.
Continuing Imbalance
TFI1 results for road transport indicate considerable improvement in efficiency. Average clearance time decreased by 50%, from 6.29 hr in 2021 to 1.99 hr in 2023. Inbound clearance followed the same trend, declining sharply from 6.60 hr to 1.99 hr over the same period. This improvement was realized due to the upgradation of the road BCP at Zamiin-Uud, financed by the Chinese government in 2023.
Rail transport presented mixed results. While outbound clearance time decreased from 20.08 hr in 2022 to 6.26 hr in 2023 (–68.9%), inbound clearance times deteriorated drastically from 9.34 hr to 22.39 hr (+140%). This long duration in inbound rail processing was caused by the relatively long change of gauge operation and waiting time at Zamiin-Uud.
Road clearance costs declined by 22%, from $36.81 in 2021 to $17.20 in 2023, suggesting more competitive pricing and reduced administrative charges. Again, only inbound costs were recorded for 2023, with outbound costs absent. The consistent reduction in inbound cost aligns with the declining clearance time, indicating synergy between time and cost improvements in road transport.
Table 6.5: Trade Facilitation Indicators for Mongolia (2021–2023)
| Trade Facilitation Indicators | Road Transport | Rail Transport | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2022 | 2023 | % change | 2021 | 2022 | 2023 | % change | ||
| TFI1 | Time taken to clear a border-crossing point (hour) | 6.3 | 4.0 | 2.0 | -50.05% | 11.8 | 12.2 | 16.0 | 31.22% |
| Outbound | 2.7 | – | – | – | 9.8 | 20.1 | 6.3 | -68.85% | |
| Inbound | 6.6 | 4.0 | 2.0 | -50.05% | 12.9 | 9.3 | 22.4 | 139.84% | |
| TFI2 | Cost incurred at border-crossing clearance ($) | 37 | 22 | 17 | -21.97% | 32 | 20 | 41 | 104.60% |
| Outbound | 12 | – | – | – | 5 | 5 | 25 | 387.80% | |
| Inbound | 37 | 22 | 17 | -21.97% | 42 | 25 | 41 | 63.29% | |
| TFI3 | Cost incurred to travel a corridor section | 1,632 | 1,455 | 1,242 | -14.61% | 360 | 440 | 982 | 123.26% |
| ($, per 500 km, per 20-ton cargo) | |||||||||
| SWD | Speed to travel on CAREC Corridors (km/h) | 20.8 | 31.4 | 41.1 | 30.77% | 13.0 | 12.6 | 8.8 | -30.25% |
| SWOD | Speed without Delay (km/h) | 35.4 | 52.2 | 57.3 | 9.68% | 21.9 | 21.2 | 14.1 | -33.54% |
Rail border clearance costs, however, more than doubled, rising from $20.04 in 2022 to $41.00 in 2023 (+104.6%). Inbound rail costs surged by 63%, while outbound costs jumped almost fourfold. This may reflect additional cargo handling charges, increased service fees, or inefficiencies in customs clearance processes at major rail terminals such as Zamiin-Uud.
TFI3 trends show improvement in road transport costs, which decreased from $1,631.71 in 2021 to $1,242.37 in 2023 (–14.6%), attributable to improved road conditions, better vehicle utilization, and increasing competition among logistics service providers. For rail transport, TFI3 surged from $359.94 in 2021 to $981.91 in 2023 (+123%), reflecting higher operational costs, possibly driven by fuel price volatility, wagon shortages, and limitations in multimodal transfer facilities.
Road transport speed improved significantly. SWD increased from 20.76 km/h in 2021 to 41.07 km/h in 2023 (+31%), while SWOD increased from 35.39 to 57.27 km/h (+9.7%). These improvements reflect reduced delays and better road infrastructure along key corridors such as Altanbulag–Ulaanbaatar– Zamiin-Uud. Digital traffic management systems and streamlined border protocols may have further contributed to this trend.
Conversely, rail transport performance declined. SWD dropped from 12.96 km/h in 2021 to 8.77 km/h in 2023 (–30.3%), and SWOD declined by 33.5%. The declines are indicative of congestion, inefficient yard operations, and possibly poor locomotive performance. The reduced rail performance contrasts starkly with the gains in road logistics.