RAILMARKET NEWS: Our last conversation was two years ago and we focused mainly on China. But since then the logistics map of the world has changed. How do you see the developments of the last few months?
Petr Rozek: The most significant change is the situation in maritime transport. Ships have stopped using Suez and are sailing around South Africa. This has a number of consequences - the voyage is longer, more expensive and less safe. There are frequent storms around the Cape of Good Hope, so containers fall into the water and losses have increased enormously. Shippers were worried about not using the capacity of their new ships, but now they are busy.
RAILMARKET NEWS: Can we expect a resumption of traffic via Suez or will it take some time?
Petr Rozek: I'm afraid it won't resume immediately. Until the situation in Gaza is stabilised and rebel activity in the area is eliminated, Suez will remain a risky route. It will probably continue indefinitely. Unless we can eliminate: firstly, the Israelis in the way they operate in Gaza. Of course, nobody is able to stop them now. Besides, it is a matter that does not even seem to concern us very much. And secondly, and this is the most important thing, how to stop these insurgents, or whatever they are - rebels or terrorists. They crawl into the desert and are invisible. There was a lot of interest from the Saudis to somehow stop this, because it's a competition for them, but it hasn't been done. If there's an aircraft carrier out there firing a dozen fireworks at them, it's probably not going to do much good. It's about stopping them from arming themselves. It's just that, and this is probably the biggest change, the arms trade is growing. They flow through channels we've never heard of before - and often end up in the hands of completely different actors than they were intended for. And nobody really knows how the weapons got there.
RAILMARKET NEWS: Is there any way to specify these channels that nobody knew about before?
Petr Rozek: They don't even talk about it today, but for example Russian exports. That was basically frozen, or should have been frozen, by all the embargoes. But Russian goods are still on the market, Russian oil is on the market, Russian gas is on the market, even their nickel is on the market. It just works, everything still works, it's just that it's not Russian anymore, it's maybe Azerbaijani or somebody who's still a little bit involved there. I don't know myself how to recognize Russian gas from Azerbaijani gas, I don't care, it just comes from somewhere. And it is the same with weapons. I think these times, whatever they may be, show one thing: business just works in all conditions, business finds a way, and even sworn enemies trade with each other, because there is no other way.
RAILMARKET NEWS: Is it at all possible to trace where the goods come from?
Petr Rozek: The business behind all this is possible because the margins are growing. I think somebody is making a hell of a profit today. For example, logistics through the Middle and Far East. At first they said that we would stop transporting goods through Russia altogether, that there would be an alternative route. One was found, but it was bad, so the goods were quietly returned to the Russian railways. <A little goes through Azerbaijan, but not much.
RAILMARKET NEWS: How is logistics in Ukraine changing in this situation?
Petr Rozek: It works, but with limitations. The Russians are deliberately trying to destroy Ukrainian infrastructure - railways, junctions, stations. Surprisingly, they are not attacking the wheat export infrastructure, part of which belongs to US companies. For example, most of the port in Odessa belongs to the American company Cargill. And so far not a single bomb has fallen there. We know that the ship goes out and is hit 30 metres from the port. But the port itself runs smoothly, so I think there are some agreements, and it's been divided and decided a long time ago how it's going to be.
Rebuilding or reerecting what is needed to be able to transport goods in Ukraine is going to be essential. I have seen pictures of the Ukrainian railway being completely destroyed. There is no electricity on the railway, the stations are destroyed. But the big transport hubs, which can be used to transport weapons, will have to be repaired. And the European Union is trembling at this, the European Union wants to spend a lot of money in Ukraine. There have even been suggestions of switching to a European gauge, but that's more science fiction - such a big country would have to maintain two systems in parallel. They tried it in the Baltic States - they built a main line with standard gauge so that goods could come from Europe. But otherwise everything there runs on this Russian gauge because there's no other way. And they are small countries - Ukraine is ten times bigger.
RAILMARKET NEWS: Talking about ports in Ukraine - Turkey is close by. Do you think its role will grow?
Petr Rozek: It is definitely already growing. Turkey is now a key logistics player not only in the region. It is a transshipment point to Europe. It is close, has good road and rail connections and has excellent agreements with the EU. Many manufacturers are returning to Turkey because of the cost, quality of labour and availability. Unfortunately, there is a lack of political will for even closer cooperation.
RAILMARKET NEWS: Do you think Turkey still has a chance to become an EU member?
Petr Rozek: I hope so. It does not make sense to push Turkey away - we are geopolitically dependent on it. If Turkey gets angry, there could be consequences. It has a huge diaspora in Europe, great manufacturing potential and is a member of NATO. I would love to see Turkey joining the EU. We would give it a bit of a chokehold, we would give it a bit of political guidance, so maybe there would not be these pointless border wars with the Kurds.
RAILMARKET NEWS: Finally, the world is now facing new trade wars, especially between the US and the rest of the world. What impact do you think this will have?
Petr Rozek: Trade wars always lead to a downturn - less trade means less logistics. Trump's threat of fines for Chinese ships entering US ports could mean a rise in shipping prices. If there are restrictions, companies will pull out, and America may soon have to figure out how to import goods at all. The situation is unprecedented. The question is whether there is the will to act - on both sides.
