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Along the New Silk Road – Bridging Eurasia: A look inside Małaszewicze

  • Written by  Charles Stevens
  • Published in Development
The freight terminals at Małaszewicze The freight terminals at Małaszewicze
19 Jul
2018
As part of our monthly series of reports looking at the impact China’s Belt and Road Initiative is having on the local infrastructure projects situated along its route, explorer and China scholar Charles Stevens visits a small Polish village feeling the effects of industrial growth

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THE NEW SILK ROAD PROJECT
Covering 10,000 miles and 18 countries The New Silk Road Project is an exploration of China’s emerging Belt and Road Initiative. Having departed from London in June 2018, it will travel along the full length of the world’s next great trade route – a nexus of power, culture and commerce that now sits at the heart of China’s foreign policy.

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Małaszewicze is an unassuming village in Poland sitting aside the highway 12km west of the Poland-Belarus border. It’s a traditional collection of small houses, has a single post office on a solitary main road, a local school, an onion-domed church and is home to roughly 4,000 people. It is also dominated on its northern edge by an enormous rail freight depot, a transhipment and logistics hub that, despite its size, is well concealed by the surrounding fields and an established covering of furs and pines.

‘Historically it was a very big area due to the needs of the army,’ says Krzysztof Szarkowski, intermodal manager at DHL Freight, one of the freight handling companies which has based its operations at the Agrostop terminal at the Malaszewicze site, one of the 17 terminals at the site. Now, this rail port no longer serves military requirements but the growing commercial demand for overland freightage between Europe and China.

Szarkowski greeted us with a seasoned smile as we drove through the entrance of the 12-hectare Agrostop terminal, our tyre tracks indenting the layers of soot across the ground. ‘Raw materials were historically key to Małaszewicze. Now our clients include Hewlett Packard, Volkswagen and Volvo. In the last two or three years we are receiving up to 40 trains a week from China,’ he states.

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Małaszewicze is an increasingly important node in the expanding transportation network connecting Europe and Asia and the concomitant growth of the new Silk Road. Its primary function has been to facilitate the necessary rail track gauge change between Poland and Belarus on the Northern Corridor. Onwards, the containers would be transferred to new trains compatible with the Russian gauge in place throughout Belarus, Russia and Kazakhstan as well as other former Soviet countries. Without this change, rail freight would be unable to continue across Eurasia in either direction. Nevertheless, Andrez Filipowicz, founder of The Polish New Silk Road Society, believes, ‘this is the most convenient way to Europe [from China] through Kazakhstan, Russia and Belarus.’

The Southern Corridor, traversing Turkey, South Caucasus and Central Asia is shorter. However, it presents greater logistical challenges given the variable topographies, frequent border crossings and incompatible tariffs along the route. It also requires the same switch to the Russian gauge in the South Caucuses followed by a return to the standard gauge on the Chinese border. The Mayor of Terespol Municipality, Krzysztof Iwaniuk says that the challenges other corridors face has helped Małaszewicze become, ‘not just a route between Europe and the East but also the Far East.’

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The  Agrostop site sits as a focal point of this expanding multimodal network. The quantity of cargo it handles annually (a million and a half tonnes) is tiny compared with terminals at  Duisburg or Port of Rotterdam, but its role remains targeted to China-Europe rail activities. Despite this, the eagerness of international logistics companies such as DHL to use the Belt and Road Initiative (BRI) as a springboard to further transportation networks is leading to incremental growth at Małaszewicze.

During our morning discussion with Mayor Iwaniuk he told us that: ‘Chinese business people who come here want to double the amount of goods sent every year.’ As part of the BRI, the Chinese government has been providing ongoing subsidies to Chinese companies using these overland solutions. This has been helping to drive up and perpetuate volumes. Thomas Kowitzki, head of China rail at DHL Global Forwarding, believes that these expanding volumes are ‘creating a value proposition not just glued to automative and technological products but increasingly applying to all sectors.’ This is helping to build the essential foundation from which transcontinental rail networks can operate as a sustainable point between the economy of maritime transportation and the speediness of airfreight.

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Radek Tarasiuk is responsible for the unpacking of shipping containers at the Agrostop warehouse. He has been working at the company for around a year and a half and sports a grey t-shirt with a faded US flag on its front. When we arrived he was removing pallets of Delphi Electronics boxes packed into midnight blue Cronos-branded containers. Obscured beneath the tightly-wrapped clingfilm you can just make out the ‘Made in China’ logo printed along the horizontal axis of each box. Radek can unload up to 24 containers a day and this ‘good quality and fast service’ is key to winning contracts. ‘At the Polish Railway Logistics Centre the limit is six hours for unloading trains. At Agrostop the limit is three hours,’ says Szarkowski.

The surrounding terminal is abuzz with activity among its 100 or so employees. Cranes manufactured in the Czech Republic transfer 40-foot long COSCO containers onto trucks attended by pot-bellied drivers who transport them regionally. The majority of containers are transferred onto more trains to continue onwards internationally. Overwhelmingly, the containers in both the terminal and in transit belong to Chinese companies; China Railway Express, China Railway Container Transport, ZIH and COSCO. As former ambassador and director of the Centre for Europe at the University of Warsaw, Bogdan Góralczyk told us: ‘Like it or not the Chinese are coming and we need to face it. Many in Poland are not ready to accept it.’

Indeed, despite interest from Chinese parties, many local Polish companies have been reluctant to accept Chinese investment in Małaszewicze to date.

MERICS Silk Road v8An overview of the full BRI plan (Image: MERICS - Click to enlarge)

Driving parallel to the railway, we pass the penultimate village of Kobylany before closing in on the Terespol border, an eastern gateway to the European Union. Here, 60-foot open wagons carrying 40-foot containers wait to move through customs clearance. Such organisational inefficiencies created by the Polish-Belarus border are perennial problems at Małaszewicze and Mayor Iwaniuk is working to address. His efforts to maintain good relations with Belarus is one way of achieving greater efficiency. However, it is not easy as companies in China only provide estimated departure dates rather than precise schedules for the China-Europe trains making onward planning a challenging exercise.

During the short return to Małaszewicze on the E30 expressway, a major east-west road through Poland, Szarkowski points out the initial phases of construction work across from Kobylany. Behind the recently opened Terespol Municipality Administrative Headquarters sit rows of green fields. They are the basis of Terespol’s development strategy which focuses on building a new city and economic district, one that will eventually be capable of absorbing up to 30,000 people. This number is over four times the current size of the municipality and it indicates Małaszewicze’s ambition to be more than just an expanding node in China’s vision, but an economic hub independently capable of attracting talent and investment.

Charles and Tom with Mayor IwaniukCharles and Tom with Mayor Iwaniuk

Work is just beginning to level and clear the ground for the first phase of development. Included in this will be a 20-hectare lake and recreation zone. Over 2,000 hectares of surrounding state land have been set aside for use if needed in the future. Warehouses will be constructed to attract new companies and high-quality detached houses are planned to be developed to attract people to settle and work in the area.

Iwaniuk’s vision for Małaszewicze and the surrounding district is ‘to be a global railway hub like Rotterdam or Hamburg.’ As China-Europe rail expands, Małaszewicze is strategically located to benefit from the growth of an important component of the new Silk Road. It is yet to be seen if the mayor’s plans will come to fruition to the full extent that is intended, but ultimately this may be secondary to the progress already resulting just from the advancement of his vision.

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