Vietnam might connect to Kazakhstan with new terminals
Vietnam could potentially develop multiple new intermodal terminals in Kazakhstan, according to a recent Memorandum of Understanding (MoU) signed between Kazakhstan Railways (KTZ) and the Vietnamese investment group Sovico. Yerzhan Nauruzbayev, director of KTZ Business Transformation Centre, shared details regarding this cooperation with RailFreight.com.
The document was signed during Kazakhstan’s president’s visit to Vietnam. Nauruzbayev pointed out that it still remains on the conceptual level. Cities like Astana and Almaty could possibly host the new logistic hubs under the investment of Sovico, which is one of the largest Vietnamese investment groups. Investment in Kazakhstan could stimulate the country’s connection with Central Asia.
New terminals in Kazakhstan
Astana “has a perfect location, especially for traffic towards Russia”, Nauruzbayev stated. The city could become Vietnam’s new intermodal centre in the area, with air and rail connections. Those made-in-Vietnam air cargoes that are currently forbidden to transport to Russia due to sanctions could thus be consolidated in Astana and further reach Russia via rail. Almaty, on the other hand, is the closest Kazakh connection to China, which has the potential to become a new gateway and further be linked to Vietnam through the railway link across the three countries. Vietnam could benefit from new logistic services and routes along the investment. What does the current Vietnam-Kazakhstan rail freight volume look like?
Vietnam-Kazakhstan volume remains low
Dara Duong, marketing lead of Trustana, a Vietnamese rail forwarding company, underlined that the current volumes exchanged between Kazakhstan and Vietnam are still relatively low. According to their internal research, Kazakhstan is ranked fourth in Vietnam’s overall export rail freight volume, and Russia is third. They contributed 1,15 per cent and 1,86 per cent of the volume, respectively. “Direct trains remain expensive,” says Duong. Vietnamese shippers prefer intermodal services towards Kazakhstan, through the Port of Vladivostok in Russia and the Port of Qinzhou in China, for example.
The low volumes might result from the late start of the Vietnamese rail freight industry, which only moves less than one per cent of the overall freight volume in the country. As Vietnam is becoming the new global manufacturing hub after China, it needs to explore low-cost, but still efficient, logistic solutions that could fulfil the needs in Europe and Central Asia, and rail has this potential.
First Vietnam-Kazakhstan train
The first route from Vietnam to Kazakhstan was launched on 31 December. The train departed from Pingxiang Railway Station in Guangxi, in southern China, and reached the Xi’an dry port east of the country for consolidation. The train was then sent to Kazakhstan via the China-Europe Express. The main products transported by this vehicle are electronic parts produced in Vietnam. This new route cut the delivery time from 50 days by sea-rail intermodal to about 25 days.
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