Russian Railways (RZD) has said this week that French transport provider Gefco, in which it bought a 75% stake in October for €800m, will play an integral part in a new rail freight corridor linking Europe with Asia via a new common rail enterprise being planned between Russia, Belarus and Kazakhstan.

In an interview this week with French business paper Les Echos, RZD’s president Vladimir Yakunin said that one its priorities for developing the Gefco business was to build its activity between Asia and Europe, part of the RZD’s ambition to increase its role as a transport provider between the two regions and reinforce its activity at the ports.

 
Gefco would only say that it confirmed the statements of its shareholder.

Currently the ocean route through the Suez Canal serves as the main trade artery between Asia and Europe but a rail route through Kazakhstan and Russia would cut the time in half according to RZD.

RZD runs freight rail in Russia and has a controlling stake in Transcontainer for moving containers by rail and with RailTransAuto for finished vehicles. Gefco also uses Transcontainer to move freight from Asia by rail on the Trans-Siberian railway for Peugeot production in Kaluga.

Yakunin also indicated in the interview that there were recently more positive signs of a possible collaboration between Gefco and rival French transport provider SNCF; RZD already works closely with SNCF.

The Russian provider is eager to diversify its business model and its geographic reach in an effort to secure a long-term position in the logistics market. The company has set itself a strong target of increasing cargo turnover by around 28% on both Russian and foreign markets by 2015 (compared to 2009) and the majority stake in Gefco is likely to promote transit cargo flows for the automotive trade along the Europe-Asia transcontinental route.

It will also help it make up the revenue lost through its sale of its freight subsidiary PGK (Freight One).

In the interview with Les Echos Yakunin explained that it had been focusing on Gefco for some time following the sell off of PGK which it was forced into ahead of planned liberalization in the Russian economy. RZD was challenged by Russia’s Federal Antimonopoly Service for abusing market dominance in 2011 and sold 75% of that company to Nezavisimaya Transportnaya Kompaniya (NTK), a rival rail freight transport and logistics provider covering Russia, the CIS and Baltic states.

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