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RUSSIA / EASTERN EUROpE NYK takes the direct approach


David Evans, project manager of NYK Logistics in Russia, says that there has been “a visible improvement” in Russian customs over the past five years. At the same time, Russia is moving towards carrying out most clearances at the country’s borders with a corresponding decrease in the number of border posts in Russia, while at the same time introducing electronic systems. While inland clearance might be an advantage in some respects, in Russia it tended to increase the amount of bureaucracy and paperwork and the new system should actually reduce the queues at the country’s borders. Logistics in Russia is changing


in many other respects, David Evans continues. Moving everything via Finland no longer has the attraction it once had - at least for NYK Logistics - and much more is now shipped direct into the country via St Petersburg and to some extent other ports such as Novorossiysk on the Black Sea. “It is now actually cheaper to ship that way. Shipping via Finland is more indirect and costs more.” Port congestion does crop up


from time to time in St Petersburg, especially in December-January,


but it is manageable and the terminals are now being constantly improved. The two main port operators, PLP and FCT are adding capacity and a third player is expected to start operations end of 2010. Warehousing in Russia has improved too, to the extent that it is often better than a lot of the Finnish stock, and traders should have nothing particular to fear in terms of security either, adds David Evans. “A lot has changed in Russia,” he explains. In particular, many imports are now being handled by official dealerships who have set up proper supply chains rather than the more informal arrangements by independent traders of a few years ago. Criminal organisations do still operate, but to no greater extent than in other cargo centres such as Heathrow or Rotterdam. Another big change is that


English is much more widely spoken than it used to be. In common with most


international operators, NYK Logistics uses mainly trucks or shipping for its links between Russia and the rest of the world. There are good feeder services operated by the likes of Unifeeder


and Team Lines from major North European hubs such as Hamburg or Rotterdam and cross-border trucking presents relatively few problems. The railways are still heavily used in Russia, but mainly for domestic transport over the country’s vast distances. One factor that militates


against the use of rail for international traffic is Russia’s unique 1520mm track gauge as against 1435mm for most of the rest of Europe, which means that all freight has to be transhipped at the country’s borders- except for Finland whose railways were built by the Russian Tsar. There is a plan to build a 1520mm gauge railway from the Russian border all the way to Austria, though with Russia and much of Europe still gripped by recession, it isn’t clear when or indeed whether it will be built. “We would be interested,” says David Evans. However, he adds that by the time it was built, in say five years’ time, who’s to say that a lot of manufacturing won’t have shifted eastwards into Russia and away from central Europe by then? Russia isn’t completely out of recession, but the worst seems to be over, he continues. A


scrappage scheme has boosted the car industry and the banks are giving loans for homes and consumer purchases again. Major industrial projects that were put on ice are slowly being revived. David Evans adds: “Significantly, when we advertise for staff, most of the applicants are already in jobs rather than out of work.” Russia’s economy is still dominated by the cities of Moscow and St Petersburg but other cities with population above a million are developing fast. There are also some developments in gateways, notably the port of Novorossiysk which is emerging as a faster alternative for goods being shipped from the Far East even for the Moscow. Perhaps the biggest issue in


Russian logistics now is road congestion. The port of St Petersburg is quite hemmed in by the urban area and although satellite areas are planned, customs reforms will be needed before the benefits can be fully realised. Moscow is even more congested, and it can take an hour and a half to cover 20 kilometres even in ‘normal’ peak time traffic - let alone when the first snows of winter arrive.


Aeroflot Cargo back in the fold


Rarely one of the world’s most stable markets, the Russian air cargo sector ran into particularly heavy turbulence last year as a battering from global economic recession coincided with a series of local storms. The latter included the abrupt


ending of Aeroflot-Cargo’s three- year existence as a separate company, albeit as a fully-owned subsidiary of Russian airline Aeroflot, and the absorption of that business back into the parent group. Now, though, the Russian air


cargo market appears to be on the up again, with Aeroflot’s restructured in-house cargo operation apparently stabilised following last year’s upheaval, other Russian cargo carriers expanding their activities and


foreign operators active in the country reporting improved traffic volumes. Mike Staeck, group managing director of Aeroflot’s cargo


general sales and service agent in Germany, Transnautic Aero, told FBJ that the Russian carrier was now operating daily MD-11 freighter flights out of its main


Beluga breaks the ice


Specialist heavylift shipping line Beluga is planning further voyages through the Arctic Ocean to destinations in Siberia following the first successful transit of the Northern Sea Route by one of its new P-class vessels. Two of the ice-strengthened multipurpose heavy lift project carriers delivered components for a power station in Surgut from Norrkoping in Sweden via Novy Port in late July, accompanied by a Russian icebreaker to break up the remaining 1-metre thick ice floes. With its major oil and gas reserves, Beluga sees the region as an important future market.


European air hub at Frankfurt Hahn to Russia and the Far East. It was also offering bellyhold cargo space averaging 1.5-2 tonnes per flight on around 70 Germany- Russia passenger services a week. “Russia was hit very badly by


the global economic crisis but the country’s air cargo market saw a pick-up start in March this year and the tonnage figures have been going up every month since,” he reported. Other major Russian cargo


airlines also now appear optimistic about their future business prospects, with both AirBridgeCargo Airlines and Polet Airlines, for example, recently reporting further expansion.


AirBridgeCargo, the scheduled cargo airline of the Volga-Dnepr


ISSUE 3 2010


Whisky to Russia? It’s as easy as TPC


TPC Freight Management, based in Bellshill, near Glasgow moves a lot of whisky and other goods into Russia (Russians, at least the better off ones, are not just enthusiastic vodka drinkers). In its 7-8 years’ existence, the country has become one of its specialisms, explains managing director, Grant Stupart. It is possible to get into trouble in Russia if you don’t know the procedures, and as these change all the time, it is difficult for the non- specialist to keep abreast. “The customs regime changes all the time, and also there are different procedures for every border crossing and, indeed, for every individual customs officer.” TPC has its own Russian staff in-house, which helps keep abreast of the changes. Sending large quantities of high-value alcohol into Russia


is not for the faint-hearted, although serious losses are not as common as many might suppose. Convoys and armed guards (usually off-duty policemen) are still routinely used. TPC still moves a lot of its traffic via Finland rather than


direct into Russia. Grant Stupart explains: “St Petersburg is an option for certain types of cargo, but it’s not a bonded port for spirits. Also, if you ship that way you effectively have to customs clear twice because customs rules in St Petersburg and Moscow are different.” TPC is in fact opening a warehouse in St Petersburg,


but the traffic will move via Estonia, another option for reaching Russia. As well as Russia, TPC is involved in other parts of central


and Eastern Europe. It is currently setting up a distribution centre in the port of Koper, Slovenia’s largest commercial port in conjunction with a local partner.


Group, took delivery of its third B747-400 freighter in four months during July, increasing its total B747F fleet to 10. The carrier said the latest aircraft would be used on its existing route network linking Frankfurt, Amsterdam,


Maastricht,


Zaragoza and Milan with Asia via Russian hubs. Meanwhile, Polet was due to


start regular freighter services linking Germany (Munich), Russia and China from September, having operated 92-tonne capacity Ilyushin IL-96-40T cargo charter flights on that route for the last year. Foreign air cargo operators


serving Russia confirmed the recent improvement. Chris Nielen, cargo commercial manager Central and Eastern Europe for British Airways World Cargo, which offers bellyhold space on three daily passenger flights (two B767 and one A320) between London Heathrow and


Russia, commented: “Imports in general are growing at 10- 30% over the 2009 figures and there has also been a pick-up in the Russian domestic air cargo market. Export air cargo traffic, though, has been quite low recently.” A spokesman for integrator


TNT Express, which in May this year launched a five times a week B737-300 freighter service linking its main European air hub in Liege, Belgium with Moscow “as a part of our strategy to strengthen the position of the company in the Russian market”, was similarly positive. “We do not know exactly


what is happening in the overall Russian air cargo market because we mainly focus on the express delivery of parcels. However, the volume of that traffic is back up to the level of 2008 so it is reasonable to expect that similar growth is happening in air cargo,” he commented.


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