Abstract

The case, set in January 2019, deals with how KTZ Express (KTZE), wholly owned subsidiary of National Company Kazakhstan Temir Zholy Joint-Stock Company (NC KTZ JSC or “KTZ”) which is the national railway company of Kazakhstan, handles its dry port operation.  KTZE provides logistics services and multimodal transport using its network of warehouses, terminals and airport infrastructure and operates the largest dry port in Khorgos, Kazakhstan. The dry port was designed to serve as a logistics hub between China and Europe that allowed sorting cargo coming from different origins to its destinations by trains. Following the introduction of the Belt and Road Initiative (BRI) since 2013, there has been significant increase in KTZE’s business in Khorgos.

Despite a general increase in business since the announcement of BRI in 2013, the dry port is only operating at 25% of its designed capacity of 540,000 TEUs (twenty-foot equivalent units of standard size containers) in 2018, and the momentum of traffic growth has been slowing down from the previous years. Students take on the role of Ms. Gaukhar Akasheva, Managing managing Director director of KTZE, to explore how the dry port could possibly impact supply chain management in the region, the possibility to change the pattern of logistic flows between China and Europe for some industries, and too firmly establish Khorgos as the major logistics hub in the region. Students are required to devise an action plan on how to attract new traffic and business, and to develop an operating model for optimizing the utilization of the facility in the next four to five years.

Learning Objectives

1. To provide students with a basic understanding of the BRI and business opportunities and challenges associated with it.

2. To explore the opportunities and challenges associated with train transportation versus other modes of transportation as well as dry port operations, in particular, from perspectives of time-cost trade off, capacity and frequency issues, operational issues and geopolitical issues.

3. To discuss about opportunities and challenges associated with cross-country cooperation.

4. To consider different options for business development.