RUSSIA/EASTERN EUROPE\\\
Consumers cautious but long term prospects are good
The wider European economic crisis has made Russian consumers cautious, despite a strong oil price that has boosted the country’s earnings, says Kari- Pekka Laaksonen, CEO of Finnish- owned door-to-door operator, Containerships. “Europe is having its own problems, and Russia is not totally removed from them, even though the oil price is at a satisfactory level from their point of view,” he told FBJ. While the basics for a
recovery in the market are in place, the mindset of people and companies
since Russia’s
last major economic downturn – a very severe one – has made everybody “a little bit cautious”, he believes. “It’s like driving a car with the handbrake on at the moment,” he says. That said, there are some signs
that things might start to pick up soon. Volumes booked on Containerships have increased since the summer, although it is too early to say whether Russia’s membership of the World Trade Organisation is having any effect yet. The increase could be because inventories have been drawn down to such an extent that restocking is imperative rather than any fundamental upward move in the market, Laaksonen points out: “I think the WTO will be a boost in the long term but in the short term I doubt if there will be significant changes. But it will encourage investors to get into Russia more.” However, there is a lot of
investment going into various projects in Russia, including the automotive sector, building and the fast-moving consumer goods industry. Russia is slowly becoming
a more modern economy – it is now 20 years
since the events of 1990 that toppled the old Soviet regime – and the hope is, says Laaksonen, that Russia will also start exporting some of the consumer goods it makes. At the moment, Russia sucks in large volumes of manufactured
items and
exports mainly oil, gas and bulk raw commodities which gives door-to-door transport operators like Containerships a very imbalanced trade pattern. There are already signs that
Russia is beginning to export tyres and some automotive spares “but I think there could be a variety of products and it’s something we would hope to see continue,” states Laaksonen. Containerships meanwhile
is operating services direct into St Petersburg from western Europe – including a thrice weekly departure from Teesport and a weekly service from Sheerness in Kent – and is developing land links – mainly rail – to the hinterland. Riga and Klaipeda are alternative ports for Moscow. The ships used are operated at 450-650teu; they have actual capacities of 700- 1,000teu but they load less cargo in order to maintain frequencies and reduce port dwell times. With its staple fleet of 45-foot palletwide boxes, the service is in fierce competition with road transport, although Laaksonen reckons that journey times are comparable, as trucks are oſten held up at Russia’s congested borders. Containers are also a very secure means of transport for valuable or vulnerable cargoes and as the vessels are all ice class, weather rarely intervenes in their schedules unless the ice gets really thick. Containerships is also
developing the concept of logistics hubs in Russia. It already has one at the Yamino Logistics Park near St Petersburg and this will be the blueprint for similar service platforms in Moscow and
elsewhere in Russia. There are some high quality warehousing developments springing up all over Russia and the concept of the full service logistics operator is being more readily embraced.
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