Port slowdown

Transport Minister of RF forecasts cargo turnover of Russia’s port complex to reach the level of 420 million tons in 2006.  This slight growth of just 3% looks meager compared to a 12% increase of 2005.

According to the information provided by the Ministry of Transport, Russian seaports increased cargo transshipment by 2.8% in the 11-month period of 2006. It totaled 383.3 million tons. Alexander Davydenko, head of the Federal Agency of Sea and River Transport, thinks it is to reach 420 million tons by the end of the year against 406.972 million tons in 2005. Forecast of the Association of Commercial Seaports is a little bit less optimistic – the ports are not to exceed 416 million tons.

Liquid bulk cargo

The highest growth has traditionally been demonstrated by export liquid bulk cargo. In the 11-month period, transshipment of liquid bulk cargo (including oils and liquid chemicals) totaled 223.6 million tons (+4.6% against January-November 2005). In 2005, annual result totaled 233.744 million tons (57.5% of all cargo handled by stevedoring companies). It was 13.2% higher compared to the results of 2004. Considering that of the previous year by about 10 million tons.

Russia’s North-West region handles 48% of all Russian oil cargo. It enables Russian ports of Baltic and Barents Seas stay leaders in growth of liquid cargo volumes. In the 11-month period, they handled 106.66 million tons (+9% against January-November 2005). This result is close to that of the whole year of 2005 - 106.71 million tons. Cargo turnover of the Far Eastern ports grew by 3.8% to over 14.23 million tons in January-November. In 2005, stevedoring companies of the Far East region handled 14.954 million tons of liquid bulk cargo. The ports of the South region had the lowest growth – just 0.2%. Total transshipment of Southern ports amounted to 102. 66 million tons of liquid bulk cargo.

Dry cargo

Transshipment of dry cargo grew by 0.4% in Russia. In the 11-month period Russia ports handled 159.7 million tons of export and import dry cargo. In 2005, annual result totaled 173.227 million tons (+10% against 2004). The leaders are still the ports of the North-West region, which handled 67.8 million tons in January-November (+3.4% against year-on-year result). The results of the Southern Basin grew by 1.8% to 43.2 million tons, while the Far Eastern ports  handled 48.7 million tons of dry cargo (-4.5%).

By rivers

There was no decrease in transportation by inland waterways though it was predicted by many analysts. Volume of cargo transported within the summer navigation is similar to that of the previous year regardless the fall out of Volgotanker, Russia’s largest river shipping company. According to the Ministry of Transport, 133 million tons of cargo was transported by Russian rivers in 2006 (100.1 % against 2005). Cargo turnover decreased by 14.6% to 73.5 billion tons-km. The figure includes 10.7 million tons of oil cargo (-37.8 % against 2005), 95.8 million tons of dry cargo (+7.4 %), 1.3 million tons of timber (-31.5 %). Construction materials make 67.2 % of all cargo transported by inland waterways, oil and oil products - 9.9 %, timber - 5.6 %, metal - 2.0 %, grain - 2.2 %, fertilizers - 1.6 %.

The two largest inland waterways of Russia demonstrated the decrease in transportation volumes. Volga-Baltic waterway transported 15.1 million tons of cargo (-13.5% against 2005). Transportation of oil products fell 2-fold to 2.7 million tons (against 5.5 million tons in 2005). Volga-Don canal transported 8 million tons of cargo (-9% against 2005) including 4.1 million tons of oil products (-20% against 2005).

The Far North regions and similar territory especially dependent on river transportation, received 13.7 million tons of different cargo in navigation 2006 (+16 % compared to 2005), including 2.4 million tons of oil cargo (+1.2 %), 10.8 million tons of dry cargo (+27.3 %) considering 1.1 million tons of coal (+11.9 %). Transportation to Arctic regions continued to grow owing mostly to development of oil and gas fields. 

In conformity with law

The decrease in growth rates should be partly attributed to the absence of a number of basic laws in the branch. The law On Ports has not been introduced into the State Duma yet, nor was it approved by the Government. It entails complicated legal and property disputes, which sometimes are brought to the court. The most sensitive issue is the lease of sea berths in the port of Saint Petersburg. The agreements between stevedoring companies and Rosmorport FSUE (the body managing the state-owned property) have reached the prosecutor’s office of Saint Petersburg and the issue is being considered by the court. In summer, the issue was discussed at the Marine Board under RF Government. Rosmorport FSUE and stevedoring companies failed to agree on the terms and the form of lease agreements. Of course, it prevents development of investment process in the ports and hinders capital inflow into marine project.

Since Russia intends to enter WTO, Federal Tax Service of RF raises tax rates for transportation of cargo in the direction of ports by almost 11% from the beginning of 2007. FTS also considers new provision on port charges, which is to make calls into some Russian ports more expensive.

Obviously, Russian port Klondike has been exhausted already. Russian stevedoring companies are now to face severe competition with the ports of neighbor states, which intend to take over part of Russian cargo. The quality and handling period is not the last issue to consider in the ports since cargo owners vote in volumes for this or that port.