Rail Transport

Shipments by Rail

Times for crossing borders by rail declined in 2022, while the costs increased. Total costs dropped, however. SWOD was up, and  SWD down.

Table 2.2: Trade Facilitation Indicators—Rail, 2021 and 2022

( ) = negative value, CAREC = Central Asia Regional Economic Cooperation, km = kilometer, km/h = kilometers per hour, SWOD = speed without delay, TFI = trade facilitation indicator.

^a Total cost estimates are derived by summing fees and payments for each border-crossing activity at the BCP. “Tea money” or “facilitation fees” beyond the official amount to be paid are included.

Source: Asian Development Bank.

Trade Facilitation Indicator 1: Average Border-Crossing Time

The TFI 1 rail average declined 21.7% from 2021, with the most time-consuming BCPs for outbound traffic located at Erenhot (44.4 Hours), Horgos (34.8 hours), and Alashankou (30.5 hours) in the PRC. All three were affected by restrictions on rail cargo movement ordered by the PRCgovernment after rail network terminals in the receiving country could not process rail traffic fast enough to allow the entry of more incoming trains. Horgos was also affected by Sanitation and Phyto-Sanitary  controls and requirements that regular CAREC corridor trains be side-tracked or give way to allow high priority Eurasian container express trains to pass. The time needed for gauge change at the border was further lengthened by the challenge in securing wagons[1]. 

[1] Kazakhstan has privatized the provisioning of wagons, so the shipper needs to separately communicate and negotiate with the private wagon owners instead of dealing with one single and centralized railway authority on wagon deployment, complicating the process of organizing rail shipments.

 The three most time-consuming rail BCPs for inbound traffic were Altynkol (82.6 hours) and Dostyk (76.1 hours) in Kazakhstan and the PRC’s Erenhot (54.9 hours). The wagon shortage was the main cause of delays. The gauge-change operation for incoming trains took an average of 3 hours to complete.

Trade Facilitation Indicator 2: Average Border-Crossing Cost

Border-crossing costs for rail were up by 20.9% in 2022. A surge in fees on Corridors 1a (30%) and 1b (17%) were driven by higher traffic.  Border-crossing costs for inbound shipments averaged $260 at Altynkol and $361 at Dostyk in Kazakhstan.

Costs can differ at BCPs depending on whether shipments move by road or by rail. A BCP with higher traffic volume generally also has higher border-crossing fees as observed from CPMM samples. Most of the road shipments go through Horgos—Nur Zholy, while most of the rail shipments go through Alashankou—Dostyk. This resulted in higher road border-crossing fees at Horgos—Nur Zholy, and higher rail border-crossing fees at Alashankou—Dostyk.

Trade Facilitation Indicator 3: Total Transport Cost

Total transport cost dropped 10.9% in 2022. The fact that TFI 2 results rose while TFI 3 (total transport cost)  fell suggested that competition in rail freight rates offset higher border-crossing fees to provide shippers with net cost reductions. The overall TFI 3 decline was led by drops on Corridors 1a (19%) and 4b (30%). Costs on Corridor 1b increased slightly by 0.5%. The lower overall transport cost in 2022 aligned with the reduced global maritime rates for shipping containers. Shippers who diverted goods to rail from ocean routes in 2021 and early 2022 switched back after maritime rates peaked in late 2022.

Trade Facilitation Indicator 4: Speed to Travel on CAREC Corridors

While SWOD increased from 41.6 km/h to 53.9 km/h in 2022, SWD dropped from 38.0 km/h to 12.4 km/h due to border bottlenecks.