To catch up and overtake
World Bank's 2012 Logistics Performance Index rated Russia as low as the 94th, behind such “Third World” countries as Niger, Tanzania, Namibia and others. In the context of Russia’s plans to redirect her foreign trade cargoes to national ports and become a mighty transit power, this status is unacceptable.
In search of unity
Russia has a unique system of seaports and inland water ways, the potential of which is not fully used so far. The competitiveness of transport facilities is primarily hindered by a low logistic level reflected in bureaucratic delays during passing border checkpoints and customs procedures as well as in insufficient level of infrastructure (mainly railway and automobile approaches to ports).
One of the main inhibiting factors is, in our opinion, absence of a single master here. For example, the state control activities at the checkpoints are in the competence of several controlling authorities guided by their own internal regulations. Hence, there is no single policy or general management of their activities.
To reduce the situation at checkpoints to a common denominator, RF Transport Ministry has developed and approved a Standard plan for handling cargo at sea border checkpoints serving a basis for Technical plans to be developed and introduced at different ports with consideration of their specific features. Their major feature is commission-free processing of vessels.
Nevertheless, state controlling authorities (SCA) are still guided by the internal regulations and orders. So there are still unsolved problems though the situation improved considerably with the introduction of the Standard plan.
For example, there is no general port checkpoint in Big Port St. Petersburg. Only one of its 15 branches is opened – small-size vessels are processed at fort Konstantin. In practice it means that the maintenance of the checkpoint’ buildings “de facto” occupied by SCA lies on private companies while they should be maintained by Rosgranitsa.
As Dmitry Bezdelov, head of Rosgranitsa, said at the meeting of Rosmorrechflot Council in Moscow, SCA often impose steep requirements on checkpoints’ outfitting while Rogranitsa is not empowered to determine such demands. That means that the problem is again in the absence of sole management. According to Dmitry Bezdelov, the requirements to checkpoints’ outfitting should be standardized at the level of the RF Government so that SCA couldn’t act here basing solely on their own views. He suggests that the issue should be discussed at the Marine Board of the RF Government headed by Dmitry Rogozin. However the agenda of the last Board meeting held in Novorossiysk on March 28 did not include this issue. In Novorossiysk, Dmitry Rogozin and the Board members discussed mainly geopolitical ambitions of Russia at the Black Sea.
Besides, the legislation demands that the buildings of the checkpoints should be built and outfitted by private investors and handed over to Rosgranitsa on a non-repayable basis and this method makes it impossible to exclude depreciation losses from tax base which again leads to the losses of private companies having such buildings on their balance sheets. In this respect, Association of Commercial Sea Ports intends to pursue its activities to make the RF government introduce amendments into the Tax Code, as we wrote earlier >>>>
The improvement of the situation at sea border checkpoints by the example of the Baltic Basin was discussed in St. Petersburg in late February by SCA and business representatives at the meeting headed by Victor Olersky, deputy Transport Minister of the Russian Federation. At the meeting it became clear that not only SCA are to blame. The “Granitsa”, remote data supply system of Rospotrebnadzor (Russian Agency for Health and Consumer Rights), was launched by Rospotrebnadzor as early as in November 2012 but only 27 FEA participants of almost 10,000 enterprises within the area of the Baltic Customs responsibility have used it by February 2013. Meanwhile, the “Granitsa” system lets to save time on trips to the office of the Authority located at the Basil Island of St. Petersburg.
According to Victor Olerski, one of the key measures to speed up cargo clearance in seaports is the unification of an electronic digital signature (EDS) making it possible to submit documents to SCA in electronic format. “EDS, which seems to be a trifle, will actually allow saving almost half of the time spent for cargo clearance,” Olerski said.
In the opinion of Ruslan Davydov, Deputy Head of the RF Federal Customs Service, a unified EDS accreditation center should be set up by the Ministry for Communications. At least, all SCA should have an opportunity to use each other’s EDS to relieve the market players from the necessity to effect EDS in all authorities, Ruslan Davydov noted.
Besides, Victor Olerski thinks it is reasonable to consider the possibility to introduce new terms for BL submission.
Meanwhile EDS is planned to be introduced within the framework of the Customs Union. According to the media, this was announced by Nikolai Strukov, deputy Minister of Communications and Informatization of the Republic of Belarus, at IT-Forum of Kazakhstan and Belarus.
“The project we are implementing within the framework of the common economic space is a very important project – in conjunction with Kazakh and Russian sides we are forming a unified automated system which will let us solve the issues of customs-related movement of cargo and electronic document flow. We have now approached EDS operations between our countries. It will not only let to transfer documents but will also encourage cargo transfer. In our opinion, this system will make it possible to integrate all the processes between our countries on a new technological level,” Nikolai Strukov said.
He added that the EDS work with the Russian side is to be completed in 2013. However the open question is if this signature will be accepted by all SCA.
In March 2013, Baltic Customs reported that average time spent by cargo in Big Port St. Petersburg made 6.5 days in 2013. According to the report, customs procedures related to declarations in respect of 93% of the goods took 1.1 day which is 17% of the average time spent by cargo in the seaport.
The rest of the time spent by goods in the seaport relates to commercial storage conditions (about 5 days of ‘free storage’ on the average), availability of approach and technological infrastructure of the terminals, weather conditions.
The statement announced the reserves for the reduction of customs clearance terms like subject-focused approach when determining the measures to be selected for risk minimization; application of pre-informing technology in seaports; automated supply of reports on goods being stored.
To summarize, it can be said that low logistic attractiveness of Russia is caused by a combination of factors – outdated methods of SCA work, low qualification and information awareness of many FEA participants.
Experts also note that. According to Marat Zainetdinov, Director General of BM Logistics, it is necessary to take into consideration that in our country logistics in its direct meaning is hardly more than 20 years old.
“We are still learning. Many Russian companies are now at the initial stage of development in terms of logistic procedures. Each company should pass a long way before it achieves a desired level of quality. When introducing advanced logistic procedures it is important not to “skip” natural maturity stages, which should be passed by any company,” Marat Zainetdinov told IAA PortNews.
According to him, an essential factor to enhance the competitiveness of Russian seaports is the creation of special economic zones in ports in order to attract extra investments into the development of hi-tech port infrastructure and put into practice logistic principles of cargo delivery. Tax benefits applied in port SEZ will facilitate improvement of Russia ports’ competitiveness, thinks the head of BM Logistics. In this respect it should be noted that special economic zones in Russian ports have not succeeded yet.
Nevertheless, the main task has not been fulfilled so far – there is no “single master” at Russian checkpoints when it comes to cargo clearance. As of today, Transport Ministry “carries the can” and often does this “manually”. As for the government, which should solve this issue, there is no unified position there.
Vitaly Chernov