OREANDA-NEWS. December 15, 2009. An inter-regional round table called "Keeping Railway Freight Transport in Western Siberia Stable as Russian Railways (RZD) Undergoes Reform" was held in Novosibirsk.

The event was attended by representatives of the West Siberian Railway, the Federal Agency for Rail Transport, government agencies and executives of more than 100 companies working in the Novosibirsk, Kemerovo, Omsk and Tomsk regions, the Altai Republic and Altai Territory.

Also in attendance were representatives of shipping companies that load at stations of the West Siberian railway such as OJSC SUEK, Yevraz Holding, OJSC Gazprom Neft, OJSC Kuzbassrazrezugol, CJSC Raspadskaya, OJSC Southern Kuzbass, KOJSC Azot (Nitrogen) and others.

The round table was organized by Freight One.

The purpose of the meeting was to find a model of the freight transportation market that will be favorable to the region’s economy as OJSC Russian Railways (RZD) withdraws from the rail freight market as an owner in 2010 and a second freight company called Freight Two is created that will acquire its rolling stock.

During the discussion, freight owners, representatives of RZD, Freight One and the Federal Rail Transport Agency identified problems that companies may face because of the impending changes in the freight market and identified ways to overcome them.

The participants more than once noted that the joint efforts of the government, business, RZD and Freight One must be aimed at ensuring a stable workload during Freight Two’s formative period and prevent unreasonable increases in freight transportation rates.

"Freight One is facing a hard task today. It needs to maintain the balance that has been achieved in the hauling process, which will be disrupted during the transition period while Freight Two is being organized. In addition, Freight One, as one of the largest operators in the market, also has to assume responsibility for the pricing policy in order to preserve and further develop the system that the company managed to build in the two years since its creation," said Yuri Dushenin, president of SibirTrans Group LLC, during the discussion.

The experience of Freight One’s Novosibirsk branch is acknowledged as exemplary in terms of stability and meeting freight owners’ service quality requirements. "The Novosibirsk branch has achieved a loading volume of about 95,000 cars, an increase of 33% over last October. The branch dispatches more than 3000 cars a day on average. A year ago, the figure was less than 2000 units," said Yevgeni Dolzhenko, director of the Novosibirsk branch. "I think this is a good indicator of the branch’s well-coordinated work and that of its partners, which will enable us all to consistently meet our customers" needs, even in this difficult time.

Igor Asaturov, Freight One’s First Deputy General Director for Commerce and Production, said that Freight One has adjusted its prices twice. Specifically, rates were drastically reduced at the beginning of the crisis period, and Freight One’s rates have now returned to the pre-crisis levels. "The company is not planning to increase rates in the future," he said.

The panelists agreed that the emergence of Freight Two will help stabilize the market.

"As the rail sector is reformed, and as efforts are made to meet the growing demand for rail transport services, problems are being solved, including those related to ensuring the development of competition in freight transport, which can be achieved in part through the emergence and development of new freight companies," said Pavel Zakharov, Deputy Head of the Siberian Federal Railway Transport Agency.

Many believe that Freight One’s experience has shown that the emergence of large private operators has had a positive impact on the market. In particular, according to Dmitri Nekrasov, Deputy Chief of the West Siberian railway, the issue of the management of owners’ rolling stock is essential for that railway. "There are 48,000 units of its own freight cars currently assigned to the railway’s stations, of which more than 19,000 cars belong to Freight One. The creation of the company was a good impetus for the development of the freight transport and freight car markets. I think that competition will only increase with the creation of Freight Two, and there will be an additional reserve of rolling stock in the region, which will make it possible to be more responsive to the needs of shippers," said Mr. Nekrasov.

Freight owners agreed with the railway representatives that the market changed for the better with the advent of Freight One. "Our company is one of Freight One’s largest partners. We’ve been working well together for a year and a half. To create an entirely new system from scratch and implement it successfully while uniting and preserving the interests of all the stakeholders-I think this is Freight One’s big breakthrough as a market operator," said Claudia Kolmogorova Head of Transport and Freight Operations of OJSC Kuzbassrazrezugol Coal Company.

Freight owners noted that in two years of working with Freight One, many companies gained experience in the organization of work with major operators, which will be useful for companies planning to work with Freight Two.