26


Issue 1 2014 Freight Business Journal


The box gains ground across Russia


The past couple of decades has seen the rise of the container train in Russia, says Andrey Naraevsky, director of liner and business development at Global Container Service (GCS), one of the country’s leading private operators of such services. While the box forged ahead in Western Europe and North America, it had always taken a back seat in the old Soviet Union and it was only with its collapse and the establishment of private rail companies that it really began to blossom. Since that time, “some big players have emerged, both in the home and international markets,” Naraevsky explains. The


total Russian inland


container market now stands at around 5m teu a year (3.5m teu laden) and although growth has slowed a bit in the past two years since the heady days of annual increases of around 30%, it is still a very respectable (by current west European standards) 5-6%, he says. Rail accounts for around half


the inland box market overall, but road is a tough competitor on some trade lanes, particularly the busy and, at 900km, relatively short


Petersburg


corridor port


between St and Moscow


where rail’s market share is currently only around 5%. But between Russia’s far eastern ports and the main inland cities of the region the situation is reversed, with rail taking around 80% of the market. From the southern port of Novorossiysk in the Black Sea, the two modes are split roughly 50-50. For its future development, GCS


is targeting the ports of the Russian far east such as Vladivostok and Vostochniy. “Russian Asia will be the quickest growing region, there are a lot of Government subsidies and the area is rich in natural resources, which is likely


to attract more people in.” Ports in the region are increasingly used by shipowners for bunkering and there is also a brisk trade in commercial intra-Asian vessels of around 2,500teu or so. Containers also now dominate


the Russian international rail market as conventional wagons are hampered by Russian rail tracks’ wider gauge than the ‘standard’ gauge used in western Europe and China, which forces transhipment at the border. This is obviously much easier to achieve with containers. Government policy also favours


increased use of rail, Naraevsky adds. Quite apart from the Russian Customs’ service’s increased restrictions on the TIR system, which has made life difficult for international truckers, new truck tolls are being introduced next year as the Government seeks to push more traffic onto the rails. The railways still have spare capacity, while road infrastructure is limited, Naraevsky points out. “Of course, road will still be favoured for some traffic, particularly where it needs to travel to a warehouse or a customs terminal that isn’t directly rail-connected,” he adds,”but the Government is trying to encourage rail more.” GCS may be a private company,


but like all such operators it is dependent on the Russian state railways (RZD) for some services including locomotives and of course infrastructure. Around half the 1,000-strong GCS rail wagon fleet is also hired in. Like many Russian government


institutions, RZD has acquired a reputation for bureaucracy and inertia, but they do in fact provide a very reliable service, particularly over longer distances, Naraevsky considers. Even on the shorter runs, GCS has major clients who prefer rail for its reliability, he


points out: “For example, if you have 40-


50 containers arriving in a port for a car plant, even if the agent can manage to arrange trucks to move them all, he can’t guarantee that they will all arrive on time.” And the railways also offer stable prices, unlike the truckers who are unwilling to fix contracts much more than two months ahead. Rail is also much more an all-weather mode and comes into its own even on the relatively short St Petersburg-Moscow route when the snows set in. Russian customs has also


picked up a reputation for bureaucracy and unpredictability, although again perceptions are perhaps a little out of date, says Naraevsky. There was a major reorganisation of the service about three years ago, and now that the dust has settled, matters are a lot clearer than they used to be. “I would say that there are no extraordinary problems now, certainly not as far as major international companies are concerned, and clearances are taking a maximum of 2-3 days except where there are problems with the goods or paperwork.” One factor that has made the


Russian customs service more unpredictable than most was that individual customs offices and regions were oſten set targets for duty collected. If a region incorporating a port was still chasing its target, it was more likely to steer clearances towards the port; on the other hand, if it had filled its quota, it tended to be more relaxed about


allowing inland


clearance. Customs duty is an important


source of government revenue in Russia – perhaps half the total – unlike most western countries, where it has been superseded by income and corporation tax.


///RUSSIA/EASTERN EUROPE


Ro ro specialist adds southern gateway


Ro ro shipping and transport specialist


Wallenius


Wilhelmsen Logistics has added a new service into the Black Sea port of Novorossiysk in response to customer demand, mainly from Asia. “Most of our customers appreciate having both St Petersburg or Kotka and Novorossiysk as points of entry,” explains head of commercial region Europe, Werner Van Dessel. “Novorossiysk is suited to the south or south-east of the country.” In


the north, Wallenius


Wilhelmsen is also doing increased business through the new port of Ust-Luga. The infrastructure there cannot be faulted, although inland links do currently leave something to be desired. Kotka in Finland is also favoured by those customers who need to store goods and call them off into Russia and when required. There is much less quayside space at St Petersburg for this. Wallenius


Wilhelmsen


already has offices in St Petersburg, Moscow, Sofia and


Tbilisi but is planning to open more in the CIS region. All


the eastern economies


have been affected to some extent by the EU economic downturn, particularly Czech Republic, Hungary, Slovakia and Bosnia but Russia and the CIS region has been much less badly hit thanks to strong energy prices. “But we are maintaining our forecast growth for the region of 0.9% in 2013,” states Van Dessel. Looking ahead, the Balkans region is expected to grow by 3% while the CIS will slow to 1.9% as Russia’s relatively weak economy starts to drag. The political upheavals in


Ukraine and, to some extent Bulgaria, are also adding a degree of uncertainty to forecasts. There are operational


problems in the region, not least those caused by the severe winter weather, which can slow shipping movements into St Petersburg in the latter half of winter from January onwards. Traffic congestion is also getting worse, though the


worst problems encountered by Wallenius Wilhelmsen in the region are actually in greater Istanbul. Moscow does though also impose a ban on heavy truck deliveries during the day. Queues at borders and inland


customs offices also must be taken into account, although nowhere in the area is likely to top the 45km queue at the Turkey/Iraq border recently, though there have been similar cases at Azerbaijan’s borders from time to time. Wallenius Wilhelmsen does not operate overland into Russia, instead sending freight directly in by vessel, which insulates it from some of the worst problems here.


All this emphasises the need


to appoint “a skilled and capable customs broker” able to keep up with frequent changes in rules and regulations, points out Van Dessel. And given that cargoes may be travelling thousands of kilometres with changes between mode en route, the cheapest option may not necessarily be the best, he adds.


New German call for Containerships Containerships is to replace


Hamburg with Lübeck as the German call on its service between St. Petersburg and Helsinki from January 2014.


Initially there will be a weekly call in Lübeck but there are plans to add a second. Private terminal operator Lehmann has developed facilities


to receive Containerships vessels on


the northern


bank of the Trave River a few hundred metres from the A 1 motorway.


Silos to Saratov


Van der Vlist recently moved two 15-ton silos and three truckloads of parts from central Europe to Saratov in South-western Russia. While the tilt-trucks loaded with parts drove


straight through to the destination, the 18m-long silos moved 1,000km by road to the North of Germany for loading onto a ferry to St Petersburg, followed by a 1600km road journey to Saratov.


International Freight Forwarders • FCL/LCL - EU + Worldwide Services • Warehousing


• Road/Sea/Air/Breakbulk/Projects • Bulk Liquids • Paperfree Trading • AEO Certified • Customs Brokers & EU Customs Compliance Specialists


Email: sales@celticfwd.ie Web: www.celticfwd.ie Tel: 353-1-865 6000 Fax: 353-1-874 6745 Ofices - Dublin, Waterford, Drogheda


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