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  • What are Sources of Container Traffic Growth in Russian Far East

  • According to SeaNews’ data, during the first seven months of 2017 the Russian Far East ports handled 815.2 thousand TEU, 27% more than during the same period in 2016.

    Import traffic grew the most with a 45% plus year-on-year up to 250.1 thousand TEU. Export also increased by 32% to 241.5 thousand tons. Transit surged 31% amounting to 36.5 thousand tons.

    While cabotage traffic growth was comparatively low, just 11%. However, cabotage makes the bulk of the entire container traffic via the Russian Far East ports.

    We asked industry experts to comment on the reasons for such explosive growth in the region.

    Retail as the Main Driver

      What are Sources of Container Traffic Growth in Russian Far East Marat Zainetdinov, Managing Director, NAWINIA RUS:

    The development of the Far East region and its infrastructure is in line with the general economic growth, which results in higher consumer demand. The major retailers have at last entered the Far East market. Traditionally, they have been expanding from the center eastwards, although some of the players, such as DNS, were present in the region, they still were lagging behind. Now the situation is improving and the region is catching up.

    Cargo Types and Currency Rates

    What are Sources of Container Traffic Growth in Russian Far EastDmitry Zotov, Managing Director, TransFin M:

    Different timber products, seafood and mackle paper could be the growth drivers in the export segment. Import-wise, spare parts for vehicles, machinery, metal hardware and foodstuffs grew the most.

    Generally, import/export balance depends on the current dollar exchange rate. With a high USD rate, export will be growing, and vice versa. Container traffic via ports will depend on the service cost and convenience. The rather insignificant traffic volume via the Russian Far East ports means that at the moment operators are not quite happy with the service and its cost.

    Freight Rates and Logistics Costs

    What are Sources of Container Traffic Growth in Russian Far EastDmitry Sukhoversha, Head of Multimodal, FM Logistic:

    Ocean freight from Asia to the Far East ports is three times as cheap as to St. Petersburg. This is the reason why many clients choose the first route. The more so, as importers often find an advantage in further transporting their goods to the Central region overland, as this reduces the transit time 30-40%. The overall logistics costs when shipping to a port in the Russian Far East and further transporting overland are comparable with those when shipping to a port in the European part of Russia and then delivering to the final destination overland. Transit time reduction is especially important for importers, who use loans for buying goods.

    It is also important to take into account direct block trains from China via the Zabaikalsk border crossing, which are quite a competitive offer as they put pressure on the tariff growth for shipping to the Far East ports.

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