New EEU transportation route

The biggest challenge to implementing the FTA is transportation, according to enterprises. Kazakhstan has proposed transporting goods via a new route, through China's Lianyungang Port as a solution.

It took this 720-tonne wheat shipment one month to travel from Khorgos in Kazakhstan to Cat Lai Port in HCM City. This was a pilot route to connect Kazakhstan and Vietnam from Khorgos to Lianyungang Port and then ports in Ho Chi Minh City.

“This is the first shipment to Vietnam via the pilot route. The goods are wheat. We're happy to provide Vietnam not just wheat but also meat, sunflower oil among other made-in-Kazakhstan products”, Kazakh Ambassador to Vietnam Beketzhan Zhumakhanov said.

Khorgos is a border town trade gateway on the Kazakh-Chinese border. 49% of its stake belongs to Kazakhstan Railway Company. Cargo is shipped from here to China's Lianyungang port on railway. The cargo then travels to Vietnam via seaway.

“This provides an opportunity for not only Kazakh enterprises but businesses in the EEU to enter Vietnam. This also opens a door for exporting certain Vietnamese products which can't be found in Kazakhstan”, ambassador Beketzhan Zhumakhanov added.

Goods from Vietnam to EAEU member countries are currently shipped via sea from Haiphong or HCM City to ports in Europe such as Saint Petersburg in Russia, Klaipeda in Estonia, Hamburg in Germany. This takes from 45 to 60 days. Then the goods are transported to Belarus and Kazakhstan via railway or highway. The pilot Khorgos - Lianyungang - Vietnam route can save half of the usual transport time.

“The new route from Kazakhstan to Lianyungang port and then Vietnam incorporates multiple means of transportation. It brings huge benefits to enterprises as well as contributes to trade between Kazakhstan and Vietnam”, Bui Van Quy from Cat Lai Port, Saigon Newport Corporation said.

Vietnamese and EEU enterprises believe that the route is especially beneficial for perishable goods such as fruits, vegetables, dairy products and semi-processed food. It is expected to solve the transportation problem which is considered the biggest challenge when implementing the EEU Free Trade Agreement.