Once considered slow and a relic of the past, Russia's mighty Trans-Siberian Railway has come to life in the 21st century to play a pivotal role in cargo transport, connecting economies from Europe to the Asia-Pacific region.
In the Troitsa port in Zarubino of the Primorsky Territory, the Trans-Siberian Railway offers a direct benefit to Japanese companies.
The port has a container terminal for the Trans-Siberian Railway and cargo block trains can transport up to 300 cars in one delivery. Each rail car holds 10 automobiles stacked on two decks. One train run consists of 30 such rail cars.
In 2008, Mazda Motor Corp. became the first Japanese automaker to use the Trans-Siberian Railway. Mazda still accounts for 98 percent of the Japanese cars transported on the railway, but Mitsubishi Motors Corp. and Fuji Heavy Industries Ltd., which manufactures Subaru cars, have also begun using the railway to transport some of their vehicles to the various nations that made up the former Soviet Union.
"South Korea's Hyundai Motor Co. also uses the railway, and we are also negotiating with Toyota Motor Corp.," said Sergej Karmanov, a vice general manager of a harbor management company.
The automakers who use the Trans-Siberian Railway are attracted by the speedy delivery times. Although Moscow is located about 9,000 kilometers away, it takes about 11 days to reach the Russian capital by train. In total, it takes about 20 days for vehicles manufactured in Japan to reach Moscow car dealerships.
If the same vehicles were shipped via the Indian Ocean and the Suez Canal to Europe for transport to Russia, it would take about 60 days.
With the Russian economy enjoying the fruits of rising prices for natural resources, new car sales have increased rapidly, and Russia is approaching the number being sold in Germany.
In the last fiscal year, Mazda shipped about 30,000 vehicles to Russia.
"There is a huge benefit to being able to quickly resupply popular models to the market," a Mazda official said.
Cargo transport over the Trans-Siberian Railway peaked in the 1980s, before transport volume fell drastically due to the outdated equipment that was being used. However, the railway has recovered to become a major distribution artery connecting Russia to Asia.
In 2011, total transport volume, including not only imports and exports to Russia but also transit cargo shipments between two other nations, reached 102.7 tons, a 30-percent increase over 2008. Ninety percent of that volume is taken up by export of natural resources because of the transport costs that are deliberately kept low as part of state policy. However, Russian Railways compiled a plan last year to increase the ratio of revenues for the transport of such cargo as industrial products and daily necessities from the 4.2 percent of 2010 to 7.5 percent in 2020.
At a container terminal next to BMW AG's modern plant in Leipzig, Germany, yellow vehicles carried containers to two rail lines with close to 20 rail cars each. The trains were bound for BMW's plant in Shenyang, China. China and Europe are separated by about 11,000 kilometers of railways, which takes about 20 days to traverse. The distance and time required is about half of shipping routes.
In the first six months of 2012, BMW's sales in China reached about 159,000 vehicles, an increase of 30 percent over the same period in 2011. That rate of increase is much higher than the 8 percent increase in global sales.
"There is a need to support the new plant by sending it parts as quickly as possible," an official at the Leipzig plant said.
On the return trips, a liquid-crystal panel manufacturing company affiliated with LG Electronics Inc. transports parts from its Dalian, China, plant to a factory in Poland.
Anatol Kuzhel, the director of the central control division at Russian Railways, said, "The speed and accuracy of the Trans-Siberian Railway exceeds international standards."
The introduction of cargo block trains from the 2000s is a major factor behind that development because it allows for quick transport of huge volumes of cargo.
In an ordinary cargo rail configuration, rail cars destined for various locations are connected together and the cars have to be disconnected and reconnected a number of times along the way. That leads to delays in delivery as well as resulting in additional jolts to the cargo.
However, cargo block trains involve connecting at least 30 rail cars and no change in that configuration is needed before reaching the destination. This means trains can reach Moscow from the Russian Far East in as short as seven days.
In Vladivostok in the Russian Far East, ships carrying cargo from Asia await their turn to anchor at the port. The Russian shipping company FESCO, or Far Eastern Shipping Co., has routes to Japan, China and South Korea. It also operates almost daily runs of cargo block trains to Moscow.
"There are no problems with delays or damage to the products," said Dmitriy Kurdakov, the director of FESCO Integrated Transport's Far Eastern regional center.
INVESTMENT TO ERASE BAD PUBLICITY
The extensive presence of the Trans-Siberian Railway is evident outside of Vladivostok where there is a railway crossing that is known locally for only being open for very short periods of time.
A long line of cargo rail cars moved slowly past, taking about 10 minutes for the entire configuration to pass. However, no sooner had that train gone by when another long cargo train came in the opposite direction.
Cargo trains on the Trans-Siberian Railway make about 60 round trips daily, including on branch lines. Some connect up to 100 rail cars, extending for about 1.5 kilometers.
There is a total of about 85,000 kilometers of rails in Russia and Russian Railways employs 970,000 workers, the largest workforce of any Russian company. That makes the company a valuable source of jobs outside of major urban centers.
The Russian government began privatizing cargo transport from about 2003 and in 2008 decided on a plan to spend at most about 13.8 trillion rubles (about 33 trillion yen, or $422 billion) over a 30-year period to renew engine cars and rails.
The extensive railway network has also led to the birth of new businesses in the Russian Far East.
About 70 kilometers north of Vladivostok near the border with China lies the city of Ussuriysk. The home appliance company Ocean has a plant there that manufactures refrigerators.
"This area is most suited for transporting parts from South Korea and China by train and shipping out finished products," said Alexandr Zaikin, Ocean general director.
Through a cooperative relationship with a South Korean company, Ocean has expanded production of products based on models first manufactured by the partner company. It now produces about 200,000 refrigerators annually and also has begun manufacturing liquid-crystal flat screen TV sets and washing machines.
"We want to expand sales in western Russia, including Moscow," Zaikin said.
Still, the Trans-Siberian Railway is not without its problems.
For one thing, the cargo block train setup requires enough cargo to fill at least 30 rail cars. But there is a chronic shortage of rail cars because production has not kept pace with the sudden increase in transport volume.
There are also unexpected costs involved, such as escort fees that are delineated by law for cargo as well as complicated customs procedures that have to be cleared.
The railway also received bad publicity in the 1990s when the overall Russian economy was mired in a confused state. At that time, the railway was criticized for using outdated equipment, the rough handling of cargo by workers and delays in the train schedule.
Some Japanese companies, such as Mitsui & Co. and Kintetsu World Express Inc., came up with transport plans to use cargo block trains. However, cargo has not accumulated due to economic stagnation arising from the collapse of U.S. investment bank Lehman Brothers in 2008.
In addition to the relatively higher expense of shipping products to the Russian Far East, officials of Japanese companies also held concerns that cargo would be damaged along the way.
Russia has implemented measures to respond to such concerns.
In addition to seeking even faster transport, efforts are also being made to reinforce the transport capability of the Baikal-Amur Mainline (BAM), which is often referred to as a second Trans-Siberian Railway.
In the future, plans call for having BAM handle the transport of natural resources while the Trans-Siberian Railway would concentrate on passenger travel and cargo block trains.
There are also efforts in other nations to create a multilayer railway network linking Europe with Asia.
For landlocked nations, getting a foothold into such a network provides an opportunity for economic development.
In May, Nursultan Nazarbayev, the Kazakhstan president, said, "We have to become the largest distribution connecting point in central Asia in order to become a bridge connecting Europe and Asia."
In 1990, operations began on a railway line from Almaty, which was the Kazakhstan capital at the time, extending for about 500 kilometers in a northwesterly direction to the Chinese border. Cargo transport lines began operating on that line from last year reaching to Chongqing in western China.
However, that line is still not up to the speed of the Trans-Siberian Railway because of a difference in rail gauge. That means cargo has to be transferred to a different train at the national border. For that reason, cargo trains have to wait their turn due to an increase in transport volume.
About 50 kilometers north of Almaty lies the small town of Jetygen. A rail line of about 300 kilometers has been laid connecting the town to one near the Chinese border. Plans call for operations to begin next year, and the new line could become a second route linking central Asia and Europe with China.
"We will protect the safety of cargo transport that is spreading around the world," said Alimkulov Berik Ryskulovich, the station master at Jetygen. "Although this is a small station, its role is important."
Mongolia, which is sandwiched between Russia and China, has also begun investing in railway construction.
From the capital of Ulan Bator, a day's drive south over the steppes leads to Sainshand, the central city of Dornogovi province. On the outskirts of the city, construction of a new railway line was proceeding on an embankment of between five to 10 meters.
Far off to the west lies the Tavan Tolgoi coal mine, one of the world's largest for which companies of various nations are competing to gain development rights. In the other direction, the embankment leads to a town in eastern Mongolia, which is connected to Russia by rail.
Plans call for connecting the Trans-Siberian Railway with the huge coal mine in a few years.
Although the coal mine is actually closer to the Chinese border, the strategy among Mongolian officials is to utilize the Trans-Siberian Railway to export the coal to Russia, Japan and South Korea.
While maintaining a delicate balance between China and Russia, Mongolia is also seeking an exit to the Sea of Japan for its enormous reserves of natural resources.
Railway engineers in Mongolia also pointed to other geopolitical factors behind the move.
Mongolian officials are wary about Beijing's motives because China in 2002 cut off rail lines from Mongolia for more than a day because of a visit from Dalai Lama XIV.
The construction of the new railway line means that in the future Sainshand will serve as an intersection for transport.
P. Gankhuyag, the governor of Dornogovi province, said, "We will create jobs for 300,000 people by constructing a heavy industry complex."