LOGISTICS OF EXPORTING TO
EURASIA SERIES
Transportation, Distribution and Warehousing
Services in Kazakhstan
November 2006
Author: Beibit Yerubayev, Bisnis Representative in Kazakhstan
INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S.
DEPARTMENT OF STATE, 2006. ALL RIGHTS RESERVED FOR USE OUTSIDE OF THE UNITED
STATES.
Located
in the heart of Eurasia, Kazakhstan has good potential to become a
transportation hub for the region. The country is rich in natural resources, has
abundant farm lands, educated labor force, and substantial industrial potential. The Kazakhstan 2006 per capita GDP reached
$5,100, which is about the current level of GDP in the Czech Republic, Hungary
and Poland. By 2015, it is targeted to
reach $ 9,000. According to the World Bank rating, Kazakhstan currently is
classified as a middle-income country.
Economic activity remains strong in Kazakhstan, with 2006 marking the seventh consecutive year of real GDP growth in excess of 9 %. Throughout 2006, key social indicators continued to improve and unemployment continued to decline.
The following table shows the foreign commerce of Kazakhstan
with the NIS and other countries of the world.
Foreign Commerce of the Republic of Kazakhstan
(In millions $)
|
2003 |
2004 |
2005 |
Total sales turnover - |
21,335.4 |
32,877.5 |
45,201.2 |
Including: |
|
|
|
- NIS |
6,912.8 |
10,215.1 |
12,200.7 |
- Other countries |
14,422.6 |
22,662.4 |
33,000.6 |
Total Export |
12,926.7 |
20,096.2 |
27,849.0 |
Including: |
|
|
|
- NIS |
2,980.5 |
4,097.2 |
4,066.8 |
-
Other countries |
9,946.2 |
15,999.0 |
23,782.2 |
Total import |
8,408.7 |
12,781.3 |
17,352.2 |
Including |
|
|
|
-
NIS |
3,932.3 |
6,117.9 |
8,133.9 |
-
Other countries |
4,476.4 |
6,663.4 |
9,218.3 |
Source:
National Statistics Agency, Republic of Kazakhstan
1.1 Transport
Infrastructure
Kazakhstan’s transport sector includes railways, air, maritime, and river transport, pipelines, and automobile routes.
Motor and railway routes account for a major share of the total aboveground transport routes, approximately 88,400 km and 14,000 km respectively. There are 3,900 km of navigable waterways and 61,000 km of air routes. Density per 1,000 square km is 5,100 km for railways, 32,400 km for hard-surfaced automobile routes, and 1,500 km for inland navigable waterways.
The airline sector consists of the national airline, Air Astana, and a number of smaller airlines. Regular flights link Kazakhstan to Turkey, UK, China, India, Germany, Austria, and several other countries. Kazakhstan’s largest airports are Astana, Almaty, Karaganda, and Aktobe.
1.2 Market
peculiarities
Kazakhstan’s
huge territory, its land-locked position, and its unbalanced distribution of
population and natural resources makes the economy of the country highly
dependent on its transportation system.
Three main transit routes cross the country’s territory:
· Europe to China via the territory of Russia
· Europe to China via the territories of the Economic Cooperation Organization (ECO) countries: Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan;
· Russia to Central Asia.
The central geographical location of Kazakhstan, Russia and other Post Soviet countries makes attracting a significant portion of all cargo transit between the EU and Asia. According to the IMF the cargo transit is worth more than $ 600 billon.
According to research conducted by Kazakhstani government agencies, Kazakhstan has a basic transportation network and skilled labor force; a lot of investment will be required in future years. Infrastructural investment requirements for the next 30 years are expected to total more than $ 25 billion. Of that, 40 % will be needed for railway transportation, 23 % for highways and motor transport, 25 % for telecommunications, and 12 % for the air and water transport systems.
Kazakhstan’s railway system plays a significant role in the transportation-communication network. It provides up to 70 % of cargo and 50 % of passenger turnover in the overall transport operations. Total railway mileage exceeds 14,000 km. The system connects all Kazakhstan’s regions and is suitable for international transit.
Kazakhstan’s transit potential has the possibility to increase its capacity through five international railway transport corridors. The principal among them is the Trans Kazakhstan Route project from China to Europe through Kazakhstan, Turkmenistan, Iran and Turkey. One advantage of this route is that the railroad track width will be in line with the international standards so that it will be unnecessary to change railroad wheels at the borders. The length of the Kazakh portion of the route will be 3,070 km. The route will allow delivering cargo from the ports of China to the port of Rotterdam within 18 days, resulting in significant cost savings for cargo transportation from the Asia-Pacific Region to Western Europe. The two-stage project has a 15-year implementation period and is set to transport up to 110 million tons of cargo a year through the territory of Kazakhstan.
Water transportation is the third most important element in Kazakhstan’s transportation system with both state and private companies operating in this field. The Irtysh River and the Caspian Sea present outstanding opportunities for development of this area.
Rail and auto transport are the
two most popular modes of transportation for importing goods into Kazakhstan,
followed by sea and air transport. The following table shows the transportation
turnover of goods on each type of transport.
Transportation of cargo and turnover of goods
|
2003 |
2004 |
2005 |
|||
Million of tons |
Billion tonne- kilometre |
Million of tons |
Billion tonne-kilometre |
Million of tons |
Billion tonne-kilometre |
|
All types of transportation |
1,687.5 |
258.4 |
1,840.5 |
283.1 |
1,926.9 |
296.3 |
Including |
|
|
|
|
|
|
Railroad1 |
203.2 |
148.4 |
215.6 |
163.4 |
222.7 |
171.9 |
Pipeline2 |
164.4 |
69.7 |
179.4 |
75.6 |
192.0 |
77.1 |
Water |
0.5 |
0.07 |
0.7 |
0.08 |
0.8 |
0.09 |
Motor |
1,313.0 |
40.0 |
1,444.8 |
43.9 |
1,511.1 |
47.1 |
Air (Thousands of tons) |
23.5 |
0.09 |
18.2 |
0.07 |
20.7 |
0.1 |
Source: National
Statistics Agency, Republic of Kazakhstan
1) Before 1997 – outbound freight, since 1997 – carried.
2) Since 1995 – oil and gas delivery included, since 1997 – transit of
natural gas included.
Express delivery companies, such as DHL, UPS, and FedEx, are present in all major cities of Kazakhstan. The services might include customs clearance formalities and provide a number of convenient transportation and logistics solutions for customers.
2.1 Waterways and Ports
As stated on the Prime Minister of the Republic of Kazakhstan’s website, The International Merchant Seaport of Aktau is the only seaport in Kazakhstan that can facilitate international flows of bulk-cargoes, crude oil, and petroproducts. Commissioned in 1963, it is now a part of the international transport corridors TRACECA and North-South, which ensures access to the ports of the Caspian, Black-Mediterranean, and Baltic basins, ports of the Gulf countries, and Southeast Asia. Cargoes from the seaport of Aktau are mainly transported to the following destinations: Anzali, Amirabad, Neka, Nowshahr, Astrakhan, Olya, Makhachkala, Baku, and Turkmenbashi.
Source: http://www.portaktau.kz/trkor.shtml
|
2003 |
2004 |
2005 |
Oil and oil products handled |
2,500 |
4,845.4 |
9,000.0 |
Dry Cargo |
1,150 |
1,300 |
1,400 |
Including metal |
800 |
993 |
1,070.0 |
Source: The Port of Aktau
TRACECA
http://www.portaktau.kz/trkor.shtml
The seaport of Aktau (http://www.portaktau.kz) is a major entity within the Aktau Seaport special economic zone established in January 1, 2003. Currently, the port possesses three multi-purpose berths to handle general and bulk cargoes and grain export. The total length of the berths is approximately 550 m and four vessels can be handled at a time. A railway-ferry complex is in operation that transports cargo directly to the rail lines. The grain terminal is capable of processing 600,000 tons and storing of up to 24,000 tons of grain at a time.
During a period of eight months in 2006, the International Merchant Seaport of Aktau handled 1,347 vessels, which translates into 7,576,700 tons of general and oil cargoes.
2.2 Rail
Kazakhstan has a low population density and a vast inland territory located far from any ocean. Therefore, internal transportation is of vital importance and the leading role falls to the railway sector.
The rail system is in high demand due to its ability to cover vast distances and it’s comparatively low cost for moving passengers and freight.
Out of the 14,203.2 km of railway lines in operation in Kazakhstan, 877.6 km belong to foreign countries. In addition, 336.3 km railways are located in foreign countries. Kazakhstan's railways include 3,997.3 km of electrified lines and 4,801.7 km of dual-track lines and multi-track railways.
In Kazakhstan, the density of trunk railways is 5.5 km per 1,000 sq km. The main transcontinental routes connecting the countries of the Asian-Pacific region, the Middle East and Near East, and Europe cross Kazakhstan. The main railway corridors of the Trans-Asian Trunk Railway connecting Europe with Asia, the Northern, Southern, Central Asian, North-South and TRACECA corridors, also pass through Kazakhstan.
Astana, new capital of Kazakhstan, as well as the large industrial hubs, such as Karaganda, Zhezkazgan and Balkhash, are located in the Northern Corridor. In the west, the railway routes are integrated with the Pan-European Transport Corridor, and in the east, with the highly economically active regions, such as the Korea peninsula, eastern and western China, and countries of Central Asia and the Persian Gulf.
According to National Railway Company (Kazakhstan Temir Zholy) at the end of 2004, Kazakhstan's rolling stock included 1,711 locomotives (34 steam locomotives, 595 electrics, 1,082 diesel and other locomotives), with a total capacity of 6,578.4 MW, as well as 301 railcars, 1,922 passenger and 100 goods wagons. In addition, there were 60,792 freight cars owned by the state railway companies and 26,688 owned by private companies and enterprises.
According to research conducted by Kazakhstani government agencies in 2004, the volume of transportation in Kazakhstan was 1.8405 million tons and cargo turnover was 283.1 billion ton-km. The railways were used mainly for transporting coal (38.7% of the total volume), iron and manganese ores (11.6%), and oil (11.3%). As compared with 2003, transportation volumes of almost all goods increased. For instance, transportation of oil increased by 2,589,000 tons (11.9%), building materials by 2,514,000 tons (17.0%), iron and manganese ores by 2,234,000 tons (9.8%), and timber by 600,000 tons (35.6%).
2.3 Roads
Roads are main element of Kazakhstan's transportation infrastructure. They are the most efficient means of transportation for cargo and people. In 2004, 78% of cargo and 85% of passengers were transported on vehicles using the roads.
By the end of 2004, the total length of public roads was 90,018 km, including 84,112 km of surfaced roads (93.4%). The public surfaced roads are of two types: state roads (22,859 km) and local roads (61,253 km). By the beginning of 2005, surfaced road density in the country was 30.9 km per 1,000 sq km, up from 30.7 km in 2003.
In 2004, the Astana-Karaganda road was commissioned and in 2005-2006, Almaty-Bishkek road was also commissioned. Under reconstruction are the following directions Aktobe-Kazabutak road and the West Kazakhstan road network.
The country's road network is to be further modernized and developed in such way as to benefit from the county's geographic location between Europe and Asia.
According to Kazakhstani statistics agency in 2004, motor transport carried 1.4448 billion tons of cargo, including transportation by non-carrier companies and estimates of commercial cargo carriage by private entrepreneurs. This was a 9 % increase over 2003 estimates. In 2004, motor transport of passengers, including commercial carriage by private entrepreneurs, totaled 9.3903 billion persons, a 5.6 % increase from 2003 figures.
In 2004, 22,167 enterprises operated 212,830 motor vehicles (13.9% of total motor vehicles), including trucks (42.6%), automobiles (27.6%), specialized vehicles (17.7%), and buses (12.1%). The total number of trucks (90,750 vehicles) included 31,901 dump trucks, 21,487 platform trucks, and 11,958 tank cars, 12,121 vans. 6,900 truck tractors and 6,383 other vehicles.
2.4 Airways
and Airports
There are 22 airports in Kazakhstan, including Astana and Almaty International Airports and 14 other airports that provide international transportation on short-term bases. Recently, two new international terminals in Astana and Almaty were put into operation. Modernization of radio and air-navigation equipment enabled the number of international air corridors to increase to 72. Eighteen countries in Europe, Southeast Asia, Central Asia, and Russia carry out transit traffic through Kazakhstan airspace. Forty-seven airlines operate in Kazakhstan, including Lufthansa, KLM, British Airways, Turkish Airlines, and others. Kazakhstan is convenient for international flight connections between West and East. Air Astana is currently the largest airline in Kazakhstan and carries out 21 international and 17 domestic flights.
Major Airports:
· Almaty International Airport http://www.almatyairport.com
· Astana International Airport http://www.astanaairport.kz
· Karaganda "Sary-Arka" http://airport.karaganda.kz
· Shymkent International Airport http://www.airserver.kz
· Aryrau International Airport http://www.atyrauairport.com
Kazakhstan's airspace is attractive for transit fights from Europe and Russia to Southeast and Central Asia.
Major transit corridors in Kazakhstan's airspace:
· ARISA-SARINE: from Europe to China and Southeast Asia;
· ARISA-ODIVA: from Europe to South Asia;
· AZABI-TIROM: from Europe to South Asia, the Middle and Near East;
· SARINE-BAEOON: from the Near East to China and Southeast Asia.
List of air companies operating cargo aircrafts in Kazakhstan
|
3.1 Shipping
and Freight forwarding
The shipping and freight forwarding market is represented relatively well. As stated before there are many Kazakhstani and foreign companies perform services such as, export-import, international air and sea shipments, door-to-door delivery, logistics, warehousing, packing, customs clearance, insurance, and assistance in goods supply.
3.2 Distribution
(wholesale/retail supply networks)
a) Wholesale networks
The major wholesale network is “Skif” LLP with “Cash&Carry”, operates in major cities of the country. “Anvar” big supermarket chain http://www.anvar.kz/ operates mainly in the western part of Kazakhstan. Also in major cities of the country there are a lot of small and medium companies work on the wholesale market and distribute different type of goods among retail companies and shops.
b) Retail
Kazakhstan’s retail market is one of the most rapidly developing sectors of the country’s economy. Local chains currently dominate, but the situation can be changed with the entry of global retail companies.
c) Retail food sector
Major players:
· Ramstore (supermarket chain) http://www.ramstore.kz
· Gross (supermarket chain)
· Pyatorochka (Russian supermarket chain) http://www.e5.ru
· Astykzhan (supermarket chain) http://www.tsesnaastyk.kz
·
S.mile (convenience store chain)
http://www.s.mile.kz/
·
Pyatorochka (Russian supermarket chain)
http://www.e5.ru
d) Retail non-food sector
Major players:
e) DIY sector
Major players:
Do-it-yourself stores recently appeared on the Kazakhstani market, but have quickly gained popularity. Currently, local operators dominate the market with the major retail chains being:
f) Distribution
Trucks belonging to individual entrepreneurs and independent transportation companies distribute most of the ready products or supplies of assorted commodities to food shops in Kazakhstan’s cities. Large trade companies mostly have their own distribution infrastructure with their own fleet of trucks.
3.3
Warehousing
Warehousing market in Kazakhstan is relatively young and has several problems. The lack of Class A and Class B warehouses and the oversupply of low class warehouse makes it challenging to find a warehouse with satisfactory specifications for size, height, microclimate, and additional services.
3.4 Supply chain management (third-party logistics (3PL), consultants and IT solution providers)
The following is a list of leading operators in warehouse logistics (3PL and supply chain management):
·
LP JV “ Kazakhstan Logistics service,” www.kls.kz
· International Transport Logistics Services (ITLS), http://www.itls.kz
· Panalpina World Transport LLP, http://www.panalpina.com
· Globalink ALMATY, http://globallink.com
3.5 Other Services (Security, Insurance, Equipment and Vehicle
Leasing)
Services provided for transportation companies:
Kazakhstan’s transportation system is rapidly developing and requires investments in different areas such as:
However, the above mentioned is only a small part of the investment opportunities that can be found in Kazakhstan’s transportation system.
5. USEFUL RESOURCES
5.1 Government
Organizations (i.e., Mintrans, RosAvtodor, etc.)
Ministry of transport
and communication of the republic of Kazakhstan
Head office country: Kazakhstan
Astana, 010000
Address: 49,Abay Ave.,
Tel: 7 (3172) 326277, 322994
Fax: 7 (3172) 321058
Web site: www.mtk.gov.kz
Joint-stock company «National company «Kazakstan temir zholy», (National railway company)
Astana, 010000
Address: 98 Pobedy Ave.
Tel: 7 (3172) 93-01-13, +7 (3172) 93-01-49
Fax: 7 (3172) 93-45-50
Web site: http://www.railways.kz/ (The website does not provide any information in English.)
5.2 Trade associations and
information portals
Alamaty, 050010
85 Dostyk Ave. office 519
Tel: 7 (3272) 613551
Fax: 7 (3272) 728310
E-mail: paltasheva@nursat.kz
Web site: http://aaekz.com
Almaty, 050000
45/91.Tole bi St.
Tel: 7 (3272) 610187, 613226, 611572, 611934, 611624, 612295
Fax. 7 (3272) 610301, 611404, 611453
E-Mail:alcci@mail.kz
Web site: www.almatycci.kz (The website provides all information in English.)
Almaty 050020
12 Chaikinoy St.
Phone/ Fax: 7(3272) 915616
Email: marketingkam@nursat.kz
Web site: http://www.marketingkam.kz (The website provides
information in English.)
Association of National Fright Forwarders
Almaty 050000,
127 Fyrmanov St.
Tel.+7 (3272) 61-01-38, 61-02-95
E-mail: info@kffanek.kz
Web site: www.kffanek.kz
5.3 Trade
consultants, lawyers, etc.
Consultants:
Almaty, 050000
531 Seyfulina St. office 421
Tel: 7 (3272) 2582252
Fax: 7(3272) 2582388
E-mail: ia_scc@nursat.kz
Web site: http://www.scc.kz
Astana, Kazakhstan:
Telephone: +7 (3172) 31 55 06
E-mail: info@kazconsult.com
Web site: http://www.kazconsult.com
Almaty, 050059
Address: 240-v Furmanov St.
Tel: 7 (3272) 2581340
Fax: 7 (3272) 2581341
E-mail, almaty@deloitte.kz
Web site: http://www.deloitte.com/kz
KAZCONSULT REGCON-ASIA
Almaty, 050000
Address: 177 Makatayev St. 4th floor, office # 401
Tel/Fax: + (3272) 795298, 343987
E-mail: office@regcon-asia.kz
Web site: http://www.regcon-asia.kz
Legal:
Almaty, 050012
Address: 57 Amageldy St.
Tel: 7 (3272) 2581400, 2581197
Fax: 7 (3272) 2581444
E-mail: Gregory J. Vojack, Managing Partner, Kazakhstan
(greg.vojack@bracewellgiuliani.kz)
Denton Wilde Sapte
Almaty, 050022
96 Baitursinov St.
Tel: 7 (3272) 2581950
Fax: 7 (3272) 2581905
E-mail: almaty@dentonwildesapte.com
Web site: http://www.dentonwildesapte.com
McGuireWoods Kazakhstan
Almaty, 050010
41-a Kazybek bi St. Казыбек би, 41-а
Tel: 7 (3272) 2596100, 2596114
Fax: 7(3272) 2596116
E-mail: akalyakina@mcguirewoods.com
Web site: http://www.mcguirewoods.com
Almaty, 050051
"Samal-1", 36, floor 5
Tel: 7 (3272) 2501570, 2584890
Fax: 7(3272) 2501575
E-mail, mwp@nursat.kz
Web site: http://www.mwp.kz
international and local transportation companies in Kazakhstan:
MAXX INTERMODAL SYSTEMS
Almaty, 050059
95 Al-Farabi Ave.
Tel: 7 (3272) 668174, 668175, 695120, 695121, 695122
Fax 7 (3272) 668173
E-mail: joachim.hanssen@ritel.be
Web site: http://www.maxx.be
Almaty, 480091
86 Gogola St., office 716
Tel: 7(3272) 95 28 65
Fax: 7(3272) 95 28 66
Email: polfrost.almaty@polfrost.kz
Web site: http://www.polfrost.com
Almaty, 050050
5 Tabachnozavodskaya St.
Tel: 7 (3272) 507171
Fax: 7 (3272) 509385
Email: info.kazakhstan@panalpina.com
Web site: http://www.panalpina.com
STS Logistics
Almaty, 050000
5 Valikhanov St., mailbox 158
Tel: 7(3272) 34-78-04, 34-78-05, 34-77-81
Fax: 7(3272) 34-77-80
Email: stsala@stslogistics.net
Web site: http://www.stslogistics.net
Almaty, 050010
52, Kabanbay Batyr St.
Tel: 7 (3272) 588880
Fax: 7(3272) 588885
E-mail: info@globalinkllc.com
Web site: http://globallink.com
BEST LTD. Shipping &
Marine Services.
Kazakhstan, Aktau, 130000, P.O.Box 152
Tel: 7 (3292) 502122
Fax: 7 (3292) 522555
Telex: 94072139 BEST (via UK)
E-mail: Best.shipping@mail.ru, Best.shipping@nursat.kz
050002 Almaty
64, Kunaev St., office 21
Tel.: 7(3272) 73-70-89, 73-38-67
Fax: 7(3272) 73-25-79
E-mail addresses:
The director: shestakov@kls.kz
Customs department: customs@kls.kz
Web site: www.kls.kz
International Transport
Logistics Services
ITLS
Almaty, 050016
18 Konayev St., 3rd floor.
Tel: 7 (3272) 713351, 710590, 734462, 711774
Fax: 7 (3272) 506188
E-mail: lilian@itls.kz, alexey@itls.kz
Web site: http://www.itls.kz
Kaztransservice JSC
Astana, 473021
63 А Zhubanov St.
Tel.: 7 (3172) 58-03-12, 58-03-10, 34-54-42
Fax: 7 (3172) 58-03-11, 37-24-64
E-mail: kts_ktzu@kepter.kz
5.4 USG
Resources (local offices)
Astana, 010010
Ak Bulak 4,
Str. 23-22, building #3
Phone: 7 (3172) 70-21-00
Fax: 7 (3172) 34-08-90
Email: info@usembassy.kz
American Chamber of Commerce in Kazakhstan
tel.: 7 (3272) 587938, +7 (3272) 587939, +7 (3272) 587940
fax: 7 (3272) 587942,
Email: info@amcham.kz
US Embassy Almaty
U.S. Commercial Service
Samal - 2, 97 Zholdasbekov St. - 11th fl.
050099 Almaty, Kazakhstan
Tel: 7 (3272) 50-49-50, 50-48-50
Fax: 7 (3272) 50-49-67, 50-48-74
Email: almaty.office.box@ mail.doc.gov
For more information on Kazakhstan, visit BISNIS online
at http://www.bisnis.doc.gov/bisnis/country/kazakhstan.cfm
BISNIS (www.bisnis.doc.gov) is
part of the U.S. Commercial Service (www.export.gov)