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2017 March 14
Transcasipan cargo logistics
Over the recent years, the Caspian Sea Basin of Russia has been showing a downward cargo transshipment trend while the throughput of other basins is permanently growing. The weakness of transcaspian logistics is in its customs administration, closeness of the Caspian Sea as well as poorly developed transport and logistic infrastructure.
Geopolitical help
The ports of the Russia’s Caspian Basin have been showing a steady decrease of throughput starting from 2012. From 2005 to 2016 cargo traffic via the Caspian ports has dropped by 42.3%. The share of the Caspian Basin in total throughput of Russian ports has plunged to a minor level of 0.8%. In January February 2017, the results of the Caspian Basin have reduced more than 2 times totaling only 540,300 t.
The key prospects of the ports in the Caspian Basin are associated with the markets of Iran and India, which provide really huge opportunities taking into account the size of population in those countries. However, in this direction the Caspian ports should compete with those of the Black Sea Basin featuring a well developed logistics as well as port and related infrastructure. The Caspian ports cannot win in this competition so far.
Currently, ad hoc ministries and agencies of Russia are developing different plans to improve the Caspian transport hub. The project of the South-North transport corridor goes back to 90-ies. In particular, the project foresees the transshipment of transcaspian cargoes at the Caspian ports of Russia. Yet, no special effect of this project is seen so far.
According to the estimates announced by the Ministry of North Caucasus Affairs in 2016, redirection of cargo flows to India/Iran and back via the proposed Caspian hub will let decrease the transportation costs by 10−15%, while the transportation time can be reduced 1.5 times.
The findings of the related survey were presented by the Analytical Center for RF Government in early March 2017. Svetlana Ganeeva, Deputy Head of the Analytical Center, says it is necessary to deploy new large capacity boxships (from 1,700 TEUs) to make the project viable as this will let decrease the cost of transportation to $100 per container, thus ensuring the competitiveness of the route.
However, Victor Olersky, Deputy Minister of Transport – Head of Rosmorrechflot, believes that deployment of such ships in the closed sea without an opportunity to use them in other regions cannot be afforded by any private investor.
“Of course, logistics scheme of the North-South corridor is a complex one with its different types of transport. It is much more complex as compared with the simple scheme being practiced for years, i.e. the seaborne transport. Therefore, a single transport document and optimization of customs formalities is important here ... It is a real challenge, a real struggle as today the costs of transportation by the North-South corridor are comparable to those by a conventional way via Novorossiysk, the difference of up to 10 days does not destroy this way. Those who need a faster way will use a plane. So it is necessary to work towards adequate customs costs and towards elimination of shipper’s “headache” (at North-South corridor – Ed.)...”, says Victor Olersky.
According to him, state support measures are required for the development of North-South transport corridor. Discounts for railway transportation and organisation of a regular transcaspian service is needed. This will require subsidizing which can be reduced later.
Besides, budgetary financing will be apparently required for construction of container carriers with sufficient capacity or other state measures to support private investments into such shipbuilding projects.
As regards cruise shipping in the Caspian Sea, Victor Olersky also sees the need of state support since investment into construction of large cruise terminals will not pay back on their own as cruise tourism is primarily beneficial for cities and municipalities rather than for the terminals.
When speaking about for the prospects of the Basin it should be taken into consideration the location of port Astrakhan which is not very favorable due to the city territory around it. As early as in 2011 they started looking into transition of its facilities to port Olya. It was acknowledged that such a transition would be reasonable when the throughput of port Astrakhan is 5 mln t (in 2016, the port handled about 2.6 mln t). That will also require more investments.
In view of all these factors, the development of the Caspian Basin will be possible only with the political will because it is not very attractive economically for investors and shippers. Geopolitically, the Caspian Basin is significant for diversification of Russia’s routes to such promising countries as Iran and India amid the politically specific routes via the Black Sea straits, the Mediterranean Sea and the Suez Canal.
Vitaly Chernov
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2021 April 15
https://www.reuters.com
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