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  • 2008 July 14

    Andrei Karpov about development of foreign trade cargo transportation in Russia

    The forecast for the development of Russian foreign trade cargo transportation by sea routes between the North West, Black Sea and Far East regions has been provided to PortNews IAA by Andrei Karpov, Head of analytical agency Dorn.

     

    - The development of Russian ports is often looked at through the prism of Europe-Asia transit. Besides, it relates to perspectives of Far Eastern ports.

     

    What are the facts?

    Transit from the Middle Asia via Kazakhstan makes some 3 million tonnes per year today (including freight delivered to Russia, which accounts for the majority of this transit).

    Railway transportation by Kazakhstan-China route has reached 18 million tonnes per year including 15 million tonnes transported to China (mainly Kazakh natural resources). Net transit by Transsib makes some 40,000 TEU. Total transportation by Transsib is from 420,000 TEU to 620,000 TEU for 2007 according to different sources. Unclear statistics does not change the situation: core transportations are not transit but cargo satisfying foreign trade demands of Russia’s Siberian regions. The potential net transit is 200,000 – 500,000 TEU (according to different sources).

    Thesis of Europe-Asia transit is not confirmed by statistics

    Export-oriented production of China is concentrated in a 200-mile coastal zone to be exported by sea. The decisions on change of routes are made not in China but in New-York, London, Paris, Berlin etc. Export potential of Central and North-West China, which could become a part of Europe-Asia transit consists of mainly non-containerized cargoes like metal and agricultural goods.

    Actually, China is more likely to develop Kazakhstan direction, which is supported by Kazakhstan government as well.

    Besides, transit is only profitable for regions participating in transshipment of transit cargo from one transport to the other. So the development of sea transport via the Far East is be an advantage for the Far Eastern port regions, while railway transit is to be profitable for Russian Railways alone.

    In practice, Transsib will to be used mainly for satisfaction of Russia’s demands rather than for transit.

     

    Therefore, the conclusion as regards the contribution of the Far East into Russian marine foreign trade is to be as follows: the region will service foreign trade interests of the Far East and Siberia with gradual expansion to hinterland. The development of the Far Eastern ports will be limited by transit initiatives of Russian Railways OJSC.

    The main role in Russia’s marine foreign trade is to be played by the North-West and the Black Sea regions in the mid-term and long-term perspective.

     

    The role of the South region in Russia’s marine foreign trade

    It is an actual rival of the North-West region. However, in the nearest future (till 2020-2025), its development will be slowed down due to implementation of 3 extremely costly projects.

     

    Sochi Olympics

    Sochi Olympics will surely give an impulse to the development of transport infrastructure in Krasnodar region. However it will only cover the Olympics-related facilities.

     

    Transfer of Russia's Black Sea fleet base

    I do not see any political opportunity to extend the lease for the use of the Sevastopol base beyond 2017. Russia will have to transfer its Black Sea fleet to Novorossiysk, which is to hinder the development of commercial facilities.

     

    The third mega-project

    To create a transport hub at the Black Sea similar to that of Ust-Luga Russia will have to carry out large-scale dredging works as well as to upgrade and develop railway and highway infrastructure of the Southern region.

    In the nearest future, part of Russia’s foreign trade cargo will be handled by Ukrainian ports.

     

    As for the North-West

    I am sure that Murmansk and Archangelsk may not strategically compete with Russian Baltic Sea ports in terms of dry cargo transshipment.

    The port of Murmansk and partially Archangelsk are economically promising only in terms of hydrocarbons transportation from the shelf the northern seas, Northern Delivery and transportation Arctic ports’ cargo including that of Norilsk Nickel OJSC. Other cargoes may be attracted to the above ports only through the governmental support measures (railway tariffs). However, Murmansk and Archangelsk will have additional chances in case of EU limits as regards transportation of Russian crude and oil products via the Dutch Straits. As for the development and support of railway routes to Murmansk, we should remember that part of attracted cargo flows may be redirected to the Norwegian port of Narvik.

    As for the port of Kaliningrad, it is not to become a hub, neither Vostochny port will.

    I think either Gdansk-Gdynya or Klaipeda is likely to become a hub at the Baltic Sea.

    In the North-West region of Russia the development of railway infrastructure is limited by the state of Vologda-Volkhovstroi section. Russian Railways plan its upgrading as well as the development of alternative routes(Sonkovo-Mga), which is to solve the problem of approaches to Ust-Luga.

    I suppose that in the middle of the next decade the development of the South region will slow down due to the above reasons and the second wave of port development will involve the Gulf of Finland. By that time the issue of a new railway may arise to transport freight to Finland and Russia’s Karelian ports along the North side of Ladoga lake.

    Dry cargo segment of Primorsk port is likely to develop during the same period. Besides, a large container terminal may appear in Primorsk-Vysotsk region. As for ro-ro cargo segment, its fastest development is to be in Big Port of St. Petersburg and the southern side of the Gulf of Finland.

    Andrei Karpov, Head of analytical agency Dorn

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