Our latest branch in Silk Road: Keep Going Global

Anna Palluch 29.06.2018

Trans.eu has continued on tremendous growth outside Europe. We have opened our 12th branch in Almaty – the potential and strategic destination to expand our operations through the Eurasia Region. Kazakhstan plays a crucial role in the road transport due to fast growing  production economies in South Asia, China and Russia. Bordering with Caspian sea in the west, Kazakhstan provides big opportunities to access easily middle east region as well.

FDI has continued to increase since 2010, top five investors are Netherlands, USA, Switzerland, France and China respectively. Almaty City is one of the most attractive cities which takes FDI inflow with $4,675.8 milion. Economic growth has been increased from 2.4% to 3.7%, highlighting positive impact on external capital inflows. Government supports foreign investment projects, involving tax incentives, employing foreign labour without any permit, small registration fees for middle and small size enterprise.

Kazakhstan started implementing large infrastructure plan by setting up transport project in 2014. Main purpose of this is to create transport routes from East, West, South and North to economically robust cities like Almaty and Astana, where economic wealth is intensified. Economic integration and connectivity with neighbor countries are also aimed through this plan. Furthermore, Western Europe – Western China International Transit Corridor Project, is another example of implying the country’s potential in the transport industry. One of the biggest advantage of this project is that travel time of transportation goods from China to Europe is expected to decrease from 45 days (sea route) to 10 days (rail or road). Moreover, freight volumes is also expected to increase 2.5 times reaching 33 mln tons annually by 2020.

According to International Finance Corporation of World Bank Group, if the country can improve logistic infrastructure and implement advanced technologies in transportation, transit freight volumes from China to Europe via Kazakhstan might growth 10 times, reaching at 300.000 twenty-foot equivalent units (TEUs) – Currently, approximately 32.000 TEUs which is the 0.2 percent of freight volume between Europe and China.

Outstanding changes in LPI

Apart from economic growth and infrastructure program supported by government to improve transport industry, the logistic performance index is another important point that should be taken into consideration on how industry evolves and changes during years, in  comparison to other countries. Overall performance is positive which ranked Kazakhstan on 77th place among 160 countries in the world with the score of 2.75 (1 to 5 scale). There is also dramatic increase of efficiency in the clearance process, moving the country 121st to 86th place. Government supported infrastructure plan has a direct positive effect on score with the +41 change.

Kazakhstan is also the part of Eurasian Customs Union, WTO, Central Asia Regional Economic Cooperation since recent years. Therefore this economic integrations trigger trade economies between countries which results domino effect on international transport industry.

The New Silk Road: “One Belt, One Road”

Economic prosperity of China in this region is impressive, the country has taken many important steps forward. One of the step is to recreate the old Silk Road by making new strategic transport routes with countries of Eurasia. Integration of Chinese economy into Europe and Globe will be feasible by crossing roads of Central Asian states to the Caspian region.
Flourishing of The New Silk road will definitely increase volume of road transport transactions. For instance, Khorgos is the production and export hub of China bordered with Kazakhstan. This duty free zone has been booming since last year. As a result, road transport transactions have been dramatically increased during last year

Positive impression in market evaluation as we discussed above, Trans.eu Platform has initially focused on the opportunity in Kazakhstan market due to geographical advantage on New Silk Road. Moreover, being closer to production hubs such as Khorgos, Trans.eu Platform will directly access on potential targets, shippers, forwarders and carriers, even in the Far East. We are so proud to inform our customers as well as our newest branch has been established January 2018 in Almaty. With the great interest and demand from Kazakh transport companies, our branch in Almaty has 8 new subscribers as monthly net growth. Successful cooperations with local authorities already created the brand awareness and the newest branch targets to bring more than 80 new companies in 2018 to Trans System as new subscribers.