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2019 July 24
Containers stumbling but going up
In the first half of 2019, Russia’s container market grew by 8.5% to 2.98 million TEUs. The industry experts say the growth can be as high as 9%, or 6.1 million TEUs, by the end of the year. However, certain macroeconomic and geopolitical conditions as well as development of outer ports on the Baltic Sea are required to ensure further stable growth.
In the first half of 2019, Russia’s container market grew by 8.5%, year-on-year, to 2.98 million TEUs (loaded), says analytical review of InfraNews. Import containers handled in the ports account for 14.8%, export – 9.87%, transit – 0.55%.
This figure is clear of dual accounting of short-sea traffic and takes into consideration loaded containers carried by road transport to/from the ports of Finland and the Baltic states. In the first half of the year, it totaled 161,000 TEUs, up 8.2%, year-on-year.
According to InfraNews, the annual growth of container traffic in Russia can reach 10% provided that the price of raw materials is stable and US dollar rate is within 70-75 roubles.
As Alexander Goloviznin, Director Analytics and Logistics, Morstroytechnology, said when commenting on the prospects of Primorsky MRC, further growth of container shipping is possible in case of lifting sanctions and counter sanctions and consequent revival of foreign trade.
Baltic horizons
Meanwhile, certain amount of containers continues to flow via the ports of the neighboring countries (Baltic state and Finland) despite the excessive container facilities in the Baltic Basin of Russia. However, container throughput of Russian port in the Baltic Basin is approaching the records of 2012-13 when they handled more than 2.6 million TEUs. According to Administration of Baltic Sea Ports, container handling in the region in the first half of 2019 grew by 7.5% to 1,342,680 TEUs.
The persistence of container flow via the foreign ports should be attributed to customs and stevedores activities (the range and gap of customs value, difference of storage conditions, etc.) and to structural features of Russia’s stevedoring market services. Most of container facilities are located in the overloaded part of Saint-Petersburg adjacent to the city center while container facilities in Ust-Luga with their large ‘transportation leg’ are being converted for handling other types of cargo.
The situation can be improved through the development of outer ports, the concept having been under discussion from the beginning of 2000s. A successful example of it is Bronka located outside the city and providing convenient transport approaches bypassing main city districts.
Another outer port – Primorsky MRC – can appear on the opposite (northern) shore of the Gulf of Finland. The project foresees the construction of container facilities and a private road linking up with the Scandinavia highway.
Besides, the development of such outer ports creates conditions for appearance of industry and logistic zones around them. Such zones can generate additional cargo flows since the development of the global container market is driven primarily by industrial goods.
Also, it is not a secret that shifting of port facilities outside the main city territory has long been under discussion in Saint-Petersburg. The development of outer ports will naturally contribute to this through internal competition.
In our opinion, the authorities of Saint-Petersburg and the Leningrad Region should integrate their efforts and elaborate a joint strategy for further development of port facilities in the mid- and long-run as well as for creation of industrial and logistic zones.
Vitaly Chernov
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