BARENTS LOGISTICS AND THE ROLE OF THE RAILWAY IN THE YEARS TO COME

BY STIG NERDAL, MANAGING DIRECTOR, TRANSPORTUTVIKLING AS BEATA WEBINAR, APRIL 29-2021

www.transportutvikling.no THE BARENTS RAILWAYS

ASIA

✓ IMPORTANT FOR REGIONAL TRANSPORTATION AND DEVELOPMENT

EUROPE ✓ POTENTIAL TO DEVELOP AN

NORTH IMPORTANT SECTION OF A AMERICA GLOBAL EAST-WEST TRANSPORTATION ROUTE

www.transportutvikling.no Anadyr • BARENTS REGION: SEVERAL RAIL CONNECTIONS Vostochny LINKED TO A GLOBAL NETWORK OF RAIL AND SEA AMBARCHIK

SHANGHAI • POTENTIAL FOR A FUTURE GLOBAL LOGISTICAL

TIANJIN TRANSIT CENTER ? HONG KONG BEIJING SHENZHEN

CHITA ZABAIKALSK

Xi’an NEW YORK ULAN UDE LANZHOU BOSTON

Dikson HALIFAX Dudinka

ST. JOHNS VARANDEI URUMQUI

NARVIK MURMANSK REYKJAVIK

ASTANA

PERM Legends: YEKATRINBURG

ST.P. VOLOGDA Railway 1520/24 m.m. Moscow

SARATOV Railway 1435 m.m. BREST OLYA ROTTERDAM Sea connections:

Break of gauge: MUMBAI ASTARA TEHERAN

Lacking infrastructure:

www.transportutvikling.no BANDAR ABBAS RAILWAYS IS GOOD FOR THE ENVIRONMENT, - BUT WE DO ALSO NEED TO IMPROVE COMMERCIAL COMPETITIVE ADVANTAGES

WHAT ABOUT THE RAILWAYS ?

www.transportutvikling.no BEING COMPETITIVE IS ALWAYS THE BEST

“CARGO IS LIKE WATER: IT WILL TAKE THE PATH OF LEAST RESISTANCE”

SEATTLE PORT COMMISSION PRESIDENT GAEL TARLETON

www.transportutvikling.no SIMPLIFIED ILLUSTRATION A LOT OF KILOMETERS, - BUT SEVERAL THE BARENTS RAILWAYS MISSING LINKS ( ),DIFFERENT STANDARDS AND GAUGES (=/=)….

© TRANSPORTUTVIKLING AS 2021 ….AND CONSEQUENTLY, LESS EFFECTIVE KIRKENES INTERNATIONAL EAST-WEST CONNECTIONS.

NARVIK MURMANSK

INDIGA BODØ KIRUNA KOLARI

BODEN ROVANIEMI

OULU BELOMORSK ARKANGELSK

KARPOGORY

VOLKOVSTROY VOLOGDA ST.P.

MOSCOW

www.transportutvikling.no IMPROVING THE FUTURE FOR THE BARENTS RAILWAYS BY INTEGRATION: TWO POTENTIAL STRATEGIES

1. HUGE INVESTMENT ✓ MANY MISSING LINKS, DEAD-ENDS, GAUGE AND STANDARD DIFFERENCES PROJECTS ✓ IT IS PROBABLE NOT COMMERCIAL VIABLE TO COMPLETE ALL MISSING-LINKS TO BUILD SEAMLESS LOGISTICAL CHAINS (NEW LINES)

✓ INTERMODAL IMPROVEMENTS: CONNECTING RAILWAYS BY USE OF OTHER MODES ✓ REDUCE COST AND IMPROVE BORDER CROSSING PROCEDURES 2. IMPROVE ✓ IMPROVE COOPERATION AMONG THE RAILWAY (COMPANIES AND MANAGERS) EXISTING SYSTEMS AND PROCEDURES AND 3 OTHER EXAMPLES THAT MAY IMPROVE THE RAILWAYS ----→

www.transportutvikling.no 3 BRIEF EXAMPLES

➔ MINOR INFRASTRUCTURE INVESTMENTS CAN BE IMPORTANT 1. MINOR INVESTMENTS AND HUGE POSITIVE IMPACTS

➔ INITIATE AND SUPPORT TECHNICAL INNOVATIONS 2. DON’T UNDERESTIMATE TECHNICAL INNOVATIONS

➔ CHANGE MARKET FOCUS TO MINIMIZE GAUGE BREAK CHALLENGES 3. THE GAUGE-BREAK “PROBLEM” CAN BE A MINOR CHALLENGE

www.transportutvikling.no NARVIK-FINLAND IS AN ELECTRIFIED, END ENVIRONMENTALLY FRIENDLY, RAILWAY CONNECTION EXCEPT A FEW KILOMETERS BETWEEN TORNIO AND LAURILA IN FINLAND Sea connections to Barents Sea the Far-East, through IN JUNE 2019 THE FINNISH GOVERNMENT CONFIRMED ELECTRIFICATION OF THE the Bering Strait “MISSING LINK” BETWEEN TORNIO AND LAURILA

THE CONSEQUENCES ARE: • LOWER ENVIRONMENTAL • 100% ENVIRONMENTAL TRANSPORTATION BETWEEN NARVIK AND COSTS (DIESEL) EASTERN MARKETS (FINLAND, RUSSIA ,EUROPE AND ASIA) Tromsø • LOWER TRANSPORTATION Nikel • LOWER TRANSPORTATION COSTS DUE TO NO NEED TO CHANGE OF Skibotn TRACTION IN TORNIO Murmansk COSTS (INVESTMENTS) NARVIK TERMINAL • INCREASED COMPETITIVE STRENGTH OF THE Ivalo Narvik NARVIK CORRIDOR (NEW)

Kiruna Sea connections to NAEC Rovaniemi White Sea North Sea/Atlantic Boden Laurila Sea Luleå connections Oulu to Europe

Umeå

Vaasa FINLAND RUSSIA NORWAY SWEDEN

©Transportutvikling AS Connections to Russia and Asia 2019 Connections to Norway (south) Connections Connections to and Europe to Europe Europe/Baltics DO NOT UNDERSTIMATE THE IMPORTANCE OF TECHNICAL INNOVATIONS

US LAND BRIDGE (EXAMPLE 1984):

A SINGLE ACTION ALLOWED US RAILS TO TAKE A 70% PLUS MARKET SHARE AWAY FROM THE SHIPS AND THE TRUCKS.

THIS WAS THE TECHNOLOGY (AND THE SCIENCE) THAT DID IT

WHAT WILL BE THE IMPORTANT TECHNICAL INNOVATIONS FOR THE BARENTS REGION?

www.transportutvikling.no THE GAUGE BREAK CHALLENGE

1520-1524 mm Russia/Finland

1435 mm Norway/Sweden

www.transportutvikling.no SOURCE: TRANSPORTUTVIKLING AS GAUGE DIFFERENCES ALL OVER THE WORLD (MADE FOR UIC)

❑ THE WORLD RAILWAYS HAVE DIFFERENT GAUGES ❑ RAIL GAUGE IS THE DISTANCE BETWEEN THE INNER SIDES OF THE TWO PARALLEL RAILS THAT MAKE UP A RAILWAY TRACK. ❑ SIXTY PERCENT OF THE WORLD'S RAILWAYS USE A 1435 m.m. GAUGE OF 1435 MM (STANDARD GAUGE) 1520/24 m.m. ❑ GAUGES WIDER THAN 1668 m.m. STANDARD GAUGE ARE CALLED BROAD GAUGE 1676 m.m. ❑ GAUGES SMALLER THAN 1065/67 m.m. STANDARD ARE CALLED NARROW GAUGE. 1050/55 m.m. ❑ SOME STRETCHES OF 1000 m.m. TRACKS ARE DUAL GAUGE ❑ THE TERM BREAK-OF-GAUGE <1000 m.m. REFERS TO THE SITUATION AT A PLACE WHERE No railways DIFFERENT GAUGES MEET

Note: Several countries have more than one gauge. The figure shows the main gauges and country borders. For some countries two colors are used, indicating two, or more; main gauges. www.transportutvikling.no Source: GAUGE CHANGE COSTS & SOLUTIONS © TRANSPORTUTVIKLING AS

COSTS Brest (Poland/Belarus) TIME CONSUMPTION PHYSICAL PAYMENTS & INVESTMENTS

INCREASED RISK

Ussuriisk = LOSS OF INCOME (Russia/China) SOLUTIONS

RANS LOADING ANTRY FORK LIFT REACH STACKER ETC 8 T (G , - , )

CHANGING AXLES 6

GAUGE CHANGE DEVICE 4

BUILDING NEW RAILWAYS

2

Haparanda/Tornio CHANGE MARKET FOCUS (Sweden/Finland) www.transportutvikling.no GAUGE CHANGE CAN BE A MINOR PROBLEM

THE COST AND TIME CONSUMPTION RELATED TO GAUGE CHANGE IS FIXED:  SAME TIME/COSTS INDEPENDENT ON A SHORT OR A LONGER DISTANCE TRANSPORT • A LONG DISTANCE TRANSPORT COSTS MORE THAN A SHORT

• A LONG DISTANCE TRANSPORT TAKES MORE TIME THAN A SHORT

NORTH NARVIK AMERICA

BODEN LONG DISTANCE: NAEC-FAR EAST COST: 1% OF TOTAL COST OULU TIME: 0,1% OF TOTAL TRANSPORT TIME RUSSIA/ SHORT DISTANCE: BODEN-OULU FAR EAST COST: 25-30% OF TOTAL COST TIME: 8% OF TOTAL TRANSPORT TIME www.transportutvikling.no ”DEAR MR. STIG

REMEMBER THAT RAILWAYS ARE BUILD ON POLITICAL WILL, AND THIS WILL STOPS AT THE

BORDER» ADAM TAMOU-TABE COORDONNATEUR DU PROJET INTERCONNEXION FERROVIAIRE DE LA CEDEAO (SENEGAL)

www.transportutvikling.no THANK YOU FOR YOUR ATTENTION

FOCUSED CONSULTANCY SERVICES

TRANSPORT & LOGISTICS

Transportutvikling AS, P.O.Box 26, N-8501 Narvik, Dronningensgt. 33, Tlf. +47 958 71905 Contact person Stig Nerdal ([email protected])

www.transportutvikling.no