For most of 2018, global tanker market was demonstrating low freight rates with a steady recovery seen in the fourth quarter. Analysts expect the market to show an upward trend for the coming two years driven by a steady demand for crude oil and oil products, oil production growth in the USA, favourable fleet balance and IMO regulations. Russia’s Arctic projects also contribute to the growth of the demand for tanker transportation with a priority given to ships of domestic origin.

The situation in Russia’s Baltic ports showed mixed trends in 2018. Cargo traffic through the port of Ust-Luga decreased for the first time having fallen below 100 million tonnes. Meanwhile there is a general downward trend in the segment of crude oil transshipment, an upwards trend in handling of dry bulk cargo and certain redirection of container flows.

The construction of ice-class ships is a strong factor for the development of shipbuilding in Russia. New icebreakers are being built intensely, not without delays, though. Meanwhile, the launch of Shipbuilding Complex “Zvezda” will let Russia build ice-class supply ships and large tankers.

In 2018, allocations for state measures supporting construction of new fleet in Russia exceeded RUB 2 billion, which allowed private customers have more than a hundred of different vessels built by domestic shipyards. Many ships were laid down under state orders.

The year of 2018 was crucial for water transport, shipbuilding and port industries with its key personnel changes, unexpected events and important legislative amendments. A lot is to be done in 2019.

Russia is making much effort to upgrade its commercial fleet in most of segments: small-size ships, port fleet, tugboats, dredgers, icebreakers, Arctic tankers, supply ships and vessels of mixed sea/river navigation. To ensure multiplicative effect for the Russian economy this process should be based on the development of domestic manufacture of shipboard equipment.

The deficit of budget resources has expectedly lead to reduction of infrastructure projects. The state and the private business has focused on the priority projects. However, some plans are still “in the air” and their prospects are not clear.

Enormous investments in creation and development of port facilities is required for the development of shipping on the Northern Sea Route. Among key projects are the Utrenniy terminal, oil terminal of Taimyr, Northern Latitudinal Railway and its extension to Sabetta. However, financial and shipbuilding capacity of the country cannot cover all the plans as scheduled.

NOVATEK, key cargo shipper on the Northern Sea Route, has ambitious plans on creation of infrastructure for LNG shipments though state financing is lagging behind so far. The plans on construction of transshipment facilities in Murmansk and Kamchatka requiring application of unique technologies can be challenged by insufficient financing of the NSR infrastructure including that of Sabetta.

The future of Russian ports will be determined by the plan for core transport infrastructure development till 2024, corporatization of Rosmorport and legislative improvements. All of this is to raise overall annual capacity of Russian ports by 350 million tonnes minimum with their throughput to grow by one third.