Lithuania’s Viking Train Eyeing Kazakh Involvement
Viking Train is a project initially dedicated to facilitating logistical links between the Baltic and the Black Sea by establishing a rail corridor in Lithuania, Belarus and Ukraine for cargo transport. The first concrete step to realizing this project came in 1999, when Lithuania and Ukraine signed a memorandum of mutual consent regarding the project. Belarus joined the project shortly thereafter and regular train service launched in 2003, transporting cargo between the Lithuanian port of Klaipeda and the Ukrainian ports of Odessa and Chornomorsk (formerly Illichivsk).
The project is characterized by innovative use of technology to improve efficiency and reduction of bureaucratic burdens on transport. Viking Train facilitated cross-border transport by taking various measures to minimize the time to clear customs at the Kena border crossing, which had been a source of long delays for rail transport. Prior to 2003, Lithuania utilized a CIM consignment note based on the regulations of the Intergovernmental Organization for International Carriage by Rail. Belarus used an SMGS consignment note based on the rules established by the Agreement on International Goods Transport by Rail. Because the two countries employed different standards, the consignment note would need to be rewritten by hand in the appropriate format at the Lithuanian-Belarussian border, contributing to unnecessary delays. In order to ameliorate this burden, Viking Train adopted a new CIM/SMGS consignment note which conforms to both systems, saving time and money with minimal associated cost. In 2016, Lithuanian Railways became an Authorized Economic Operator under the World Customs Organization, agreeing to maintain certain security standards and consequently being privileged with reduced inspections by customs officials.
Viking Train also spear-headed a modernization of equipment at Kena in a three-stage project completed in 2008. Project leaders installed additional rails, creating a total of 13 entrance routes to the station. A dynamic scale has been installed, allowing cargo to be weighed without stopping the train to take measurements. X-ray gates have also been constructed, allowing cargo to be screened without the delay associated with manual inspection.
As a consequence of these initiatives, Lithuanian Railways reports that Viking Train can clear EU/CIS border at Kena in 30 minutes, allowing the train to traverse the 1734 km between Klaipeda and Chornomorsk in 54 hours. This compares quite favorable with the route from Klaipeda to Istanbul, which covers about twice as much distance but takes 3-4 times as long, largely because of bureaucratic delays.
The Viking Train project attained a significant level of success in its first years, achieving high growth in the volume it transported and even receiving an award from the European Intermodal Association for Best Practice in an Intermodal Project, resulting in scholarly attention and case studies about the project. However, the project has faltered several times since its inception. A substantial decline in cargo volumes in 2008 led administrators to reduce transport tariffs by 15 percent. Cargo volumes grew steadily from 2009 to 2011, when they topped 55,000 TEU/year. There was a general decline after that, with Viking Train moving 38,173 TEUs in 2013 and 33,577 in 2016. More positively, Viking transported 43,233 TEUs in 2018 and projects that they will reach 49000 TEUs in 2019, but it remains to be seen whether this growth is sustainable.
What explains this lackluster performance? The economic crisis in Ukraine surely plays a role, but so does Viking Trains effort to expand rapidly. In 2011, a banner year for the project, the Viking brand was patented, and project leaders began to attract other countries to the Viking Train network, including Moldova, Romania, Bulgaria, Turkey, Georgia and Azerbaijan. In a recent comment to Trend, Lithuanian Railways mentioned that it is in negotiations to add Sweden and Kazakhstan to the fold. However, Viking Train has largely failed to replicate those factors that made its early years so successful. High costs of maritime transport from Ukraine long undermined the economics of expansion. If Viking Trains wants to replicate its initial success, it needs to return to its original business model focused on cutting costs and reducing bureaucratic delays.