Port of Arkhangelsk strives to become a hub for Arctic project cargo flows
By the year-end results of 2021, the Port of Arkhangelsk shows strong growth in dry cargo segment. At the same time, the port is currently busy handling project cargoes intended for the Arctic projects, gradually becoming a real gateway to the Arctic. As before, the exports from the region still do not flow through the Arkhangelsk terminals, bypassing currently St. Petersburg as well, going directly to the Trans-Siberian Railway, which entails a shortage of railway wagons.
According to the Russian Ministry of Transport information, available to PortNews, the volume of dry cargo handled at the Port of Arkhangelsk in the first eleven months of 2021 increased by almost 2.5% reaching 2.07 million tonnes. The port is entirely busy handling project cargo intended for numerous infrastructure projects located in the Gulf of Ob, the Yenisei Gulf, Novaya Zemlya, etc. This is project cargo the port is focused now implementing different programmes aimed at the development of port infrastructure.
The port set out on building terminals and sites for handling and storage of steel structures delivered for Vostok Oil project. Viktor Ikonnikov, Deputy Prime Minister of the Arkhangelsk Region and Minister of Economic Development, Industry and Science told on the sidelines of the 9th International Forum Arctic Projects, Today and Tomorrow that the regional terminals are expected to transship pipes, steel structures, tank farm structures, auxiliary metal components.
“The project promises large volumes of loads, and today our companies are preparing to build new terminals, berths, and purchase handling equipment,” said the regional minister.
TLC Solombala Terminal (Arctic Consulting Service) is among those who work with project cargo. Mikhail Tolstikov, head of Solombala Terminal told at the forum that its company plans to build a new concrete berth by the end of 2022. The 174-m long berth will be able to receive and handle vessels with a draft of 8.2 meters. The terminal operator expects that commissioning of the berth will increase the terminal’s annual cargo throughput to more that 500 000 tonnes. The company also plans to replace the existing wooden berth with a concrete one with new cranes.
However, similar to other regional ports, the development of railway infrastructure lags behind the needs of shippers in the Arkhangelsk region.
“There is a discrepancy between the development of the infrastructure of our monopolists and the tasks that we face... For example, the Solombalsky with its average capacity of slightly over 2 million tonnes, is planned to transship some 4.5 million tonnes a year. The rail yard has already reached 80% of its maximum utilization. Obviously, this railway network’s bottleneck needs overhaul. Our general message is that the plans of our large monopolies, such as RZD, Gazprom and electricity transmission and distribution grid company RSTI need to be synchronized with plans for the project implementation,” said Viktor Ikonnikov.
According to experts, earlier and now, the main export cargo flows bypass the port. Before it went through the Greater Port of St. Petersburg. Today, due to a surge in ocean freight rates, the export freight is partially carried by rail to the border crossings with China (Zabaikalsk). Logistics, at first glance, looks surprising, since the transportation leg from Arkhangelsk to China is a lot longer than from Arkhangelsk to St. Petersburg, but those are the realities of the freight market.
Transport expert Sofya Katkova comments: “Last year, it was about timber cargo in containers, which were delivered from the North-West region (Arkhangelsk region, Komi, Karelia) according to the traditional logistics through the Greater Port of St. Petersburg to European ports and then by sea to China. It was efficient then thanks to cheap freight rates. The loaded containers were shipped to Europe (from China - Ed.) by sea-going vessels, and the freight rates for the return loading of ships were very favorable. This year, due to the high freight rates in this direction, part of the freight traffic "turned around": transit through Russia by rail from Europe to Asia increased, and the prices of rail transport in the direction of Asia from Russia became more attractive, despite the significant haul distance. Therefore, direct railway timber exports from the Northern regions to Asia have tripled compared to 2018.”
This situation has as one of its consequences a huge increase in the turnover time of railway wagons and container platforms, which entails their shortage. This is about a 8000-km transport leg in one direction. The Republic of Komi and Tatarstan have complained about the lack of wagons for the transportation of socially significant goods within the country.
Taking this into account, it is not yet very clear how, in particular, the logistics of the new timber processing project of the Ustyansky Timber Industry Complex in Karpogory will look like, which will produce annually more than 1 million tonnes of cargo. After all, it was conceived back in the era of the traditional supply chain through St. Petersburg.
Be that as it may, the Port of Arkhangelsk itself is not yet able to handle the export cargo traffic (estimated at about 1 million tonnes per year). Firstly, due to the maximum utilization of capacity for handling project cargo, and secondly, due to the underdeveloped infrastructure of the Northern Sea Route. In the longer term, especially in summer, this is likely to be possible.
