The Trans-Siberian Land Bridge – The Top 20 Key Cities Linking Vladivostok To Europe

Op/Ed by Chris Devonshire-Ellis

Trade and Logistics Opportunities Await Entrepreneurs & Businesses All Along The Trans-Siberian Routes – If You Know Where To Look

Russia has announced the opening of the so-called “Trans-Siberian Land Bridge” with a successful first test run of cargo from Yokohama to Europe. Essentially the route covers a dual maritime-rail link that initially sees products travel by ship from ports on the Japanese west coast, travel to Vladivostok and connect with the trans-Siberian express through to Moscow and onto Brest in Belarus, right on the border of the EU and Poland. From there they enter the EU market and be dispersed as required.

Although the concept is not entirely new, it is a new commercial route being operated by Russia’s Far Eastern Shipping Company (FESCO) in a venture with RZD Logistics. The crucial point about the route is that it cuts down the journey time in shipping goods from Japan to the EU by 50%, taking about 20 days, saving considerable amounts of time and money.

I wrote about the increasing role Russia has in terms of cross-border transportation between China and the EU before in the article “Transshipping China Trains and Ships To Europe” and this new Japan route is an extension of the same thing. While the shipping of Chinese goods to Europe is responsible for the largest single national volume of goods using the trans-Siberian, the new Japan route will usher in a significant increase in transit cargo passing from both Japan and South Korea through Russia. It is also a route that offers plenty of growth potential – the total current volume of containerized freight between Japan and South Korea with Europe is about 5 million 20-foot containers (TEU) per annum. FESCO and RZD have eyes on that increasing to 200,000 TEU plus each year.

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There are other dynamics at play that will also see, in time, an explosion of transit freight across Russia from Asia to the EU. One is the development of the China-Eurasian Economic Union Free Trade Agreement, which has been signed off but at present does not contain provisions for a reduction in tariffs. But that is on the cards, with the Chinese and Russian Presidents Xi and Putin stating at the recent SPIEF conference in St.Petersburg that tariffs were being worked on between the two sides. As and when a significant agreement is reached, tariff reductions on Chinese goods and Russia will see Chinese goods turning up at Ports like Brest, essentially duty free. While the EU will still be imposing their own customs duties, it will usher in developments such as warehousing infrastructure and repackaging facilities at ports bordering the EU. The use of Blockchain by both Russia and China in terms of cargo and containers will also speed up delivery times. That has implications for Russian, Japanese and Chinese fishing grounds in north-east Asia and Far East Russia, as well as to a vast array of other products from electronics and IT to fashion in reaching out to affluent consumer markets in the West.

In this article we explore the cities most likely to benefit from the development of these new, upgraded and faster routes.

Vladivostok 
Vladivostok is the regional capital of Russia’s eastern Primorsky Krai, and is developing as a major eastern city in its own right with a huge sea port, free trade and special economic zones. Vladivostok is the end of the trans-Siberian express train – a 6 day journey to Moscow, or a 9 hour flight. Flights from Shanghai are 3 hours. Vladivostok enjoys a low tax regime and fast track 8 day visas upon arrival as it looks to become the primary city for administering Far East Russian regional development. The city includes a Free Trade Zone, Export Processing Zone and is home to the Eurasian Diamond Exchange where buyers and gem stones processors globally do business. The region as a whole is also an important fisheries area and supports related industries in machinery, processing, refrigeration and shipping. Vladivostok is also the destination of the Primorye-1 road corridor which terminates at the Port from Harbin, aimed at opening up China’s landlocked Heilongjiang Province with import-export access to Vladivostok and the Pacific Ocean. The population of Vladivostok is 600,000, the population of Primorsky Krai is 2 million.

The population of Heilongjiang Province is 38 million.

Khabarovsk / Fuyuan
Khabarovsk is the capital of Khabarovsky Krai, and lies about 800km north of Vladivostok, to which it is connected by the Trans-Siberian Rail, the M58 and M60 highways, and an international airport. The border with China is just 30km south, with Fuyuan just across the other side of the Amur (Heilongjiang) River. Citizens of both are allowed passage to each others cities but not beyond them without possession of respective full visas. Fuyuan is connected by train to Harbin, and has a relatively small population of 130,000. Much of that processes trade and services destined for Russia via Khabarovsk. Given the proximity of Khabarovsk to Fuyuan, there are development opportunities both sides of the River to expand this, and get Japanese and Vladivostok goods into Harbin (population 5.5 million) and onto the massive national China rail networks.

The population of Khabarovsk is 620,000, and Khabarovsky Krai 1.5 million.

Chita / Tarskaya / Manzhouli / Mudanjiang
Chita is the next major Trans-Siberian Rail city to the West, and is the capital of Zabaykalsky Krai. It has long been a service centre for the Trans-Siberian, and is also home to the Trans-Manchurian route from Tarskaya just a few Km from Chita itself. The Trans-Manchurian heads to Harbin and Mudanjiang before linking with the network to Beijing, and thus serves an important region of China’s landlocked Heilongjiang Province, which along with the Primorye-1 road corridor https://www.russia-briefing.com/news/russia-china-agree-primorye-1-corridor-opens-heilongjiang-asia-pacific-markets.html/ aim at opening up Heilongjiang Province with access to Vladivostok and markets in Japan, Korea, and the North American west coast. The Trans-Manchurian also serves Manzhouli, an important processing lumber processing centre in China, just across from the Russian border. Chita has an international airport with direct links across Russia as well as to Beijing.

The population of Chita is 350,000, with a total of 1.1 million in Zabaykalsky Krai and 38 million in Heilongjiang.

Ulan-Ude / Ulaan Baatar
Ulan Ude is the capital city of the Republic of Buryatia, about 100km south of Lake Baikal. It is on the Trans-Siberian rail network and also serves as the junction for the Trans-Mongolian rail, with connections through to Ulaan Baatar in Mongolia and Beijing. Ulan-Ude also has an international airport with connections throughout Russia as well as to Ulaan Baatar, Beijing and Seoul. Traders from Ulan-Ude use the link with Ulaan Baatar to access premium consumer brands that arrive there duty free from Hong Kong (which has direct flights to Ulaan Baatar) that would not otherwise be available without a long trip to Moscow. Consequently Ulaan Baatar services Ulan-Ude and the regional Russian market with high priced items such as luxury bags, watches and clothes and is a significant trade hub on the Trans-Mongolian for the Russian market.

Ulan Ude has a population of 450,000, and the Republic of Buryatia 1 million. Ulaan Baatar is the capital of Mongolia and has a population of about 1.3 million.

Ulaan Baatar, the capital of Mongolia, is a Trans-Siberian source of luxury products imported duty free from Hong Kong, where import duties are lower than mainland China and Russia.

Krasnoyarsk
Krasnoyarsk is the capital city of Krasnoyarsk Krai and also on the Trans-Siberian rail. It is an important regional Siberian hub, with direct air connections to most Siberian and Far Eastern Russian cities, as well as an important pan-Russian outreach and international connections to Baku and Tashkent. Krasnoyarsk is Russia’s largest producer of aluminum. It is redeveloping itself as a Central Siberian Belt & Road hub  while the Krai itself is one of Russia’s most important metallurgy centres with significant deposits of nickel, cobalt, copper and gold.

The population of Krasnoyarsk is 1.1 million with 2.8 million in total throughout Krasnoyarsk Krai.

Irkutsk
Irkutsk is the capital of Irkutsk Oblast and is on the Trans-Siberian Rail and on Russia’s main M53 and M55 highway network. It is an important link through to Lake Baikal, which has a sizeable fishing industry. Other industries include mining, energy, logging, oil and fuels, machine-building, chemicals, food industry, and hydroelectricity. Irkutsk is one of Siberia’s main cities, and is well known for its aviation industry, best known as being the home of the Su-30 fighter aircraft. It is a significant stop on both the Trans-Siberian and Trans-Mongolian rail networks, the former of which heads east to Vladivostok and latter south, across the Gobi Desert to Beijing and the Chinese state network. Irkutsk is served by an international airport with links across Russia and also to Ulaan Baatar in Mongolia, Shenyang, Harbin, Shanghai and Chengdu in China, Seoul, Tashkent, Dushanbe and Bishkek.

The population of Irkutsk is 630,000 with about 2.5 million within the Oblast.

Novosibirsk
Novosibirsk is Russia’s third largest city, and capital of Novosibirsk Oblast. It is on the Trans-Siberian and is also a major hub for the Trans-Turkestan Railway, which links through from Tashkent in Uzbekistan, via Almaty in Kazakhstan and onto Urumqi in China’s Xinjiang Province. It heads north via Barnual to Novosibirsk from Aktogay.
It has a large international airport, which as Novosibirsk is situated in the middle of the route from some important cities in East Asia such as Seoul, Shanghai and Hong Kong en route to Europe makes it attractive for cargo airlines to use it for refueling stops. Novosibirsk as a whole is an important region in Russia, known for its forestry in addition to oil, gas and coal reserves and major hydro-electric and thermal power, the region has an energy surplus. Because of this it has a significant amount of FDI, especially in related support industries. The region is also heavily invested in manufacturing, including steel and other non-ferrous metals, in addition to a large manufacturing and electrical products base. It is home to Novosibirsk Aircraft, which manufactures the SU range of jet fighters among others.

Novosibirk has a population of 1.6 million, and the Oblast in total about 2.9 million.

Omsk
Omsk is the capital of Omsk Oblast and also on the Trans-Siberian rail. It also sits on the main Irtysh River, which connects by Port access to various cities in Kazakhstan and Western China and consequently is a trading link with Kazakhstan and Central Asia. The Irtysh River Port in Omsk is the largest Siberian inland Port, and carries tankers, passenger and freight craft. The international airport has connections to the Kazakhstan capital of Nur-Sultan as well as most Russian cities.

The city population is 1.2 million while the Omsk Oblast has a population of 1.9 million.

Omsk has a River network large enough to conduct significant inland Port trade deep into Kazakhstan

Yekaterinburg
Yekaterinburg is the capital of Sverdlovsk Oblast, and on the main Trans-Siberian rail. It is one of the largest economic centres in Russia and is included in the City-600 list (the 600 largest cities in the world, collectively producing 60% of global GDP), compiled by the McKinsey Global Institute. Yekaterinburg’s GDP is about US$30 billion, based on its status as a major industrial base and its geophysical position as being a services and trade hub for many of the larger Russian cities in the Urals. The city is a major transport and logistics hub, with 7 main rail arteries, 6 federal highways and an international airport servicing destinations throughout Russia, Europe and Central Asia.

The population is 1.5 million with 4.5 million throughout Sverdlovsk Oblast.

Perm
Perm is the capital city of Perm Krai, and is on the Trans-Siberian rail network. It sits on the Kama River, a major tributary of the Volga River, giving Perm river access to the many Volga cities across Russia, and access to the White Sea, Black Sea, Azov Sea, Baltic Sea and Caspian Sea. The river connects the city with European waterways, and it is possible to ship cargo from the Kama river area to the sea ports mentioned without reloading. Eleven of Russia’s top 20 largest cities, including Moscow, are linked to Perm via the Volga. The city therefore acts as an collective river trading hub for products to be distributed along the Trans-Siberian and vice-versa. Perm also has an international airport, with extensive connections throughout Russia.

The city population is 1.1 million with 2.6 million throughout Perm Krai.

Kazan
Kazan is the capital city of Tartarstan, and one of the largest religious, economic, political, scientific, educational, cultural and sports centers in Russia. It is not on the Trans-Siberian but is connected to both Moscow and Yekaterinburg by rail, thus making a southern loop from the main Trans-Siberian line. Kazan also sits on the main Meridian planned route through Russia to China via Kazakhstan. It has an international airport serving most major Russian cities in addition to destinations in Europe and Central Asia.

Kazan’s population is 1.3 million while Tartarstan has a population of 4 million.

Nizhny-Novgorod 
Nizhny-Novgorod has long had a reputation as being one of Russia’s main trading cities, and is on the main Russian M7 highway linking directly to Moscow as well as Kazan and Ufa. It is also on the Volga River, Europe’s largest, linking it to the Caspian Sea. In summer it is possible to navigate the Volga from St.Petersburg through to Astrakhan. 11 of Russia’s largest cities border the Volga River, while it is also on the Trans-Siberian Rail and the high-speed Moscow-Kazan Rail itself the centre of speculation over direct high speed links to Beijing. This makes Nizhny Novogorod a central logistics regional hub. It has a large airport serving mainly domestic but some international flights.

Population: 1.3 million.

Nizhny-Novgorod provides access to 11 of Russia’s 20 largest cities through the Volga River – the largest in Europe.

Smolensk
Smolensk is on the main Russian M1 highway with Moscow and the Moscow rail, while it also has an underused city airport although that will shortly change in line with its Meridian Highway destiny. The city is an engineering hub and also has aviation, electronics, IT and agricultural industry sectors. It is also a river port for the Dnieper River, one of Europe’s largest, reaching to the Black Sea via the Ukraine, where it remains an important logistics route. From here the Trans-Siberian runs through to Moscow and then onto Minsk in Belarus.

The population of Smolensk is 330,000.

Minsk – Minsk is the capital city of Belarus, and trains from Moscow run through here on the way to Poland at the border city of Brest. Minsk is located at the junction of the Warsaw-Moscow railway running from the southwest to the northeast of the city and the Liepaja-Romny Railway running from the northwest to the south. The first railway connects Russia with Poland and Germany; the second connects Ukraine with Lithuania and Latvia. They cross at the main Minsk railway station. There are also three intercity bus stations that link Minsk with the suburbs and other cities in Belarus and the neighbouring countries. Frequent schedules of bus routes connect Minsk to Moscow, Smolensk, Vilnuis, Riga, Kiev and Warsaw. The population of Minsk is 2 million with a total of just under 10 million for Belarus as a whole.

Brest – Brest can be expected to develop a significant transportation and logistics hub with goods to and from the EU, Russia and China, and this development is already underway. Brest is a major artery for EU goods entering Russia with many EU businesses having relocated to Belarus to get around the EU sanctions. It is linked by road and rail to the capital, Minsk and directly to Moscow. The population is 350,000. Beyond Brest is the Polish city of Terespol and routes onto Warsaw and Berlin.

Brest Railway Yard. Beyond Lies The Markets Of The European Union

As can be seen, the cities along the Trans-Siberian land bridge offer a wealth of differing opportunities. Each of them are catchment areas in their own right, others offer access to other, nearby cities and regions that can also be expected to be part of the land bridge basin. Others still offer access to extensive river networks, even to Russia’s multitude of Rivers, Seas, and Oceans. The development of the Trans-Siberian rail network was well thought out in its day – over 100 years ago – providing access to key resources from fishing, timber and minerals. Many of these have now gone on to develop as industry leaders and global competitors in their own right.

The development of the Trans-Siberian land bridge, with its promise of fast track cargo from Europe to Japan across Russia, also fits in with the recent Russian announcement that it will develop the Meridian Highway linking from Russia’s Ural Mountains through to Kazakhstan and overland to China. That has been featured in the article Key Logistics Hubs Along Russia’s Meridian Road.

These cities will rediscover their importance as logistics and distribution hubs to service both road and rail across Russia to Europe and China and beyond. Foreign investors involved in logistics and the related supporting industries should be aware of the opportunities that these cities provide to assist Eurasian trade routes.