The Role of Russian Railways in Global Distribution and Transportation

This report examines the role of Russian Railways in global distribution and transport, highlighting its significant impact on the Russian economy. With the second-largest rail network in the world, Russia's railway system accounts for a substantial portion of the country's freight movements and contributes significantly to its GDP. The report identifies key stakeholders, including the Joint Company Russian Railway Company (RZD) and Alstom Transport, and discusses the involvement of international governing bodies like the United Nations Economic Commission for Europe and the Organization for Cooperation between Railways (OSJD). It concludes by emphasizing the importance of effective corporate governance, strategic partnerships, and government support in ensuring the continued success and modernization of Russia's railway infrastructure, which facilitates international trade and economic integration. Desklib provides access to similar reports and solved assignments for students.

Running head: GLOBAL DISTRIBUTION AND TRANSPORT 1
Global distribution and Transport
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Railways transport in Russia
Introduction
Russia has been spending billions of monies to ensure that the country has an effective
and efficient rail infrastructure capable of driving and growing its economy. Russia operates the
second largest rail network in the world after the United States of America (Petrova, 2015). The
rail transport has a span of an 85,000 km track, and it accounts for the country’s 90% of all
freight movements excluding pipeline transport. The Russian rail transport is divided into
seventeen geographical regional railways. The regional railway is being coordinated by the
Ministry of the Means of Communication, Joint Stock Company Russian Railways and
Rossiiskie Zheleznyie Dorogi (RZD). Economically, the Russian railway transport accounts for
approximately 2.5% of the total GDP, and a total of 800,00 people are employed working in
different departments and sections either as skilled and unskilled laborers.
Statistically, the public rail transport transported close to 1.3 billion people in 2007
(Chistik, Nosov, Tsypin, Ivanov & Permjakova, 2016). Railway transport in Russia has made it
easier for Coal miners to transport coal. With this kind of business activities, the money being
generated can be used to develop the economy of citizens. As an illustration, the revenue being
collected from the railway transport in Russia contribute a total of 2.5% to GDP growth of the
country. When it comes to employment, the railway transport can improve the standards of living
since they can get payment which can be used to take care of personal needs and expenses. With
the steady growth of transit goods from 22 million tons in 2009 to 22 million in 2012, the
revenue being generated will increase. Railways transport has opened an opportunity for foreign

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investment since Russia has been able to reach out to Europe for investment and partnership in
the development of its railway network that will able to generate numerous monetary benefits.
This can be evidenced by the recent Eurobond issues of RZD. Furthermore, the European
government has invested more than $1.6 billion in 13 Russian rail projects since the reforms that
took was launched in 2001 (Miroshnikova & Taskaeva, 2017).
Main stakeholders
The Russian railway transport has numerous stakeholders playing a key role in its
development. First, there is the Joint Company Russian Railway Company which is a fully state-
owned company. It provides a variety of services such as passenger service in which the
passengers are transported on domestic services and direct transit routes which include; Europe,
Asia, Czech Republic, Mongolia, French China, and Baltic countries (Razumovskaya, Lapidus,
Mishakin & Popov, 2014). When it comes to freight charges, the company provides the
following services; logistics and terminal warehouse services, providing rolling stock and
stevedore transportation. These services being provided are among the strengths of the
organization. Others include; the company can operate a large business. Some of its operations
include; 85, 000 kilometers of railway lines, being able to manage more than 750,000 skilled
employees, transporting a total of 1.3 billion people and over 1 billion freight annually.
Additionally, the company generates close to 1.5% of the country’s GDP (Berg, 2016).
Lastly, it has its presence in more than 40 countries. A major weakness of this stakeholder is lack
of enough resources such as monetary and human capital to launch developmental plans that will
lead improved transport efficiency. Inadequate resource is a problem related to management.
This results in the organization seeking funds from outside countries on loan.

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French rail giant Alstom Transport is also a major stakeholder in the Russian railway
transport. The organization invested a large stake towards the development of a modern rail
transport that will lead increased efficiency and faster delivery of raw material and also saving
time when it comes to passenger transport (Chemov, Butakova, Karpenko & Kartashov, 2016).
The partnership is aimed at manufacturing rails with an objective of introducing passenger
locomotives into the Russian market. The partnership has been able to produce the first series of
production labeled EPSON electric passenger locomotive to RZD. There is a total of their units
being delivered on a monthly basis.
Alstom has also been able to introduce new technologies where 80 Russian engineers are
being trained to design and test the new locomotives with the help of a modern computer system
that was not being used in the country. When comparing this company with RZD or the Joint
Company Russian Railway Company, it is clear that Alstom Transport has the resources and
capital that can be used to develop the railway transports towards achieving its efficiency and
increased productivity (Proskurina, Rimppi, Heinimö, Hansson, Orlov, Raghu & Vakkilainen,
2016). This will be transplanted to increased revenue collection by the government, and more
money will be injected into the economy.
International governing bodies
The international governing bodies include; the United Nations Economic Commission
for Europe which was established with an objective of encouraging economic cooperation among
its member states. The economic cooperation will be established through the creation of terms of
trade using the railway transport towards increased economic participation (Rodemann &
Templar, 2014). Secondly, there is the organization for Cooperation between Railways (OSJD)
which was formed with an objective of improving and developing international railways carriage

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for all passengers and goods. Additionally, the organization is also aimed at increasing the
competitiveness of railway transport in Eurasia (Burkov, Blazhko & Ivanov, 2016). This will be
achieved through strengthening regulatory framework. Through this, the organization will be in a
position to achieve efficiency in regards to railway transport. This organization will influence
Russian railway transport in the following ways; developing and improving international railway
transportation where there is traffic between Asia and other countries in regards to combined
transport with Russia railways (Bogoviz, Ragulina, Lobova, Zhukov & Stepanova, 2016).
Additionally, the organization will be able to develop transport policies when it comes to
international railway traffic, elaborating railway transport and OSJD strategies to member
countries in regards to combine transportation. Additionally, the organization will be able to co-
operate on the solution towards problems affecting the economic and scientific or technological
aspects of the railway transport (Macheret, 2015).
Conclusion
The success of rail transport in Russia will only depend on effective corporate
governance. The corporate governance can be improved by using the following strategies. First,
the Russian railway companies should standardize and regulate key management process. This
will be aimed at improving the quality of the decision that will be made when it comes to
strategic objectives and the success of the railway transport. The Russian Railway companies
should have a productive dialogue with the shareholders and investors. Through this, there will
be adequate resources that will be needed towards the introduction of a modernized train and
improving both organizational practices and services. Employees of the railway transport should
be given adequate social support to improve their job performance. Some of the social support
programs that could be offered to railways transport employees include; being offered mortgage

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programs, corporate system of private pension and motivational programs due to the nature of
work that they do on a daily basis.
The government plays a major role in the development of rail transport. With the help of
the government, the railway companies will be able to have capable investors who can invest in
the development of the railway industry. In this case, the government will seek funding from
international investors and also join trade blocs within the region with an objective of expanding
the rail transport. With the railway transport going beyond its borders, the country will be able to
generate money from the sale of coals and other business activities that will be achieved through
economic integration. This is a step towards improving the economic performance of the
country. Most importantly, the government should seek loans and partnership with countries
such as Europe and Asian countries. The partnership will lead to increased investment and
allocation of resources for efficient railways transport.

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