RUSSIA\\\


Russia’s relations with the wider world are being reorientated towards the Black Sea, says Dmitriy Kutateladze, director of liner and business development at multimodal operator, Ruscon. Ports such as Novorossiysk becoming


are an important


entry point and shipping lines are changing their service patterns while the ports themselves are being rapidly developed. Ruscon itself recently opened a new warehouse in Novorossiysk with direct links to the seaport, railway system and highways


with 1500sq m and 840teu of storage. Kutateladze explains that


Novorossiysk is the important entry point in the region and the biggest container port on the Black Sea with throughput in the first ten months of 2016 of 0.5 million teu, a 3% year on year increase. “Transit time from the Far East to Moscow (the main production and consuming region in Russia ) is seven days shorter then via St Petersburg port- and also freight rates from the Far East via these two ports are very close to each other.”


Novorossiysk is also the main gateway for container traffic between Russia and the Mediterranean, Indian subcontinent and Middle Eastern trades. A major part of Novorossiysk’s traffic are imports of fresh fruits and vegetables from the East Mediterranean to Russia. Unlike the Baltic ports, which


are the main outlets for trade with the EU, the Black Sea has not been affected by EU trade sanctions. Main container carriers in the local market include Maersk,


Rail container market steams ahead


The Russian rail container market continued its


robust


growth in October and November 2016, while the market expanded by around 9.3% in the first ten months of 2016, said leading intermodal operator, TransContainer. In fact, Russian container


transport volumes reached the highest ever monthly level in October – 300,000teu, confirming the company’s earlier estimates of close on 10% growth. For the first nine months of


2016, the Russian rail container market grew by 8.2% year-on- year to 2.37m teu, with domestic transport volume surging by 13.0% year-on-year, while export transport grew 5.2% year-on-


year. Transit volumes increased by 7.2% year-on-year, but import volumes were down 0.6% year- on-year. TransContainer said the


strong market performance was


due a move towards


container freight on rail, with increased competition among rail operators, as well as between rail and other modes. TransContainer expects growth in the Russian rail container market to continue in the coming year while long-term growth will be maintained by the expected recovery in industrial production, consumer demand and further growth in rail cargo containerisation. With this in mind,


TransContainer plans to resume purchases of rolling stock as well as making further improvements to efficiency and service quality. Currently TransContainer


owns 23,342 flatcars and 67,382 ISO containers,


along with 45


terminals across Russia and one in Slovakia under a long- term lease agreement. Through its KedenTransService (KDTS) joint venture it also operates 19 inland rail-side terminals in Kazakhstan. The company’s own revenues


jumped 20.8% to 36.9bn roubles while earnings increased by 13.5% year-on-year to RUB 2,106 million and the net profit was up 30.8% year-on-year to RUB 1,159 million.


Yusen offers groundbreaking import service


Yusen Logistics has launched air import consolidation services at Moscow’s Sheremetyevo airport and Domodedovo airports and for Pulkovo in St Petersburg. The forwarder describes


them as “a genuine innovation in the Russian transportation


industry,


with Yusen Logistics being the first international airfreight forwarder to offer such consolidation services


at these three airports. Previously only


airport to airport services under airline direct air waybills (DAWB) were available. Yusen Logistics Russia’s


airfreight business unit manager, Nadezhda Krutiy, commented: “By using Yusen Logistics’ house airway bill import consolidation service, customers can benefit from


collect


freight charges service, full


visibility of cargo status, final mile delivery and warehousing if required,


Issue 1 2017 - Freight Business Journal


17 Black Sea is key to Russia’s heart


MSC, ZIM and Arkas Line, while CMA offers specialised seasonal services for reefer traffic. There is currently a trend


towards larger ships on existing services, adds Kutateladze. “For example, Seago together with Arkas launched a new Med/ Black Sea feeder service with 6,000 teu vessels.” In fact, the trend towards


larger ships is currently limited only by Novorossiysk’s container facilities, he says. There are three container terminals at Novorossiysk of which only one can


handle panamaxes and postpanamaxes and is currently


serving the ZIM/


OOCL Far East direct service, Maersk’s ME3 ICS service and the Seago/Arkas feeder. But from 2018 a further


terminal will be able to handle container ships of up to 10,000teu and a number of


carriers have already


announced that they will extend their deep sea services to Novorossiysk when reconstruction is complete. Ruscon is continuing to invest in Russia. Due to


Be aware of the risks, warns insurer


With some signs of a recovery in the severely depressed Russian transport market, London-based specialist insurer the


TT Club is


reminding operators with interests in the market that business in the region carries a five-fold liability risk. Speaking at a TransBaltic


industry conference in St Petersburg on 1 December, a spokesman for TT Club’s representative partner in Russia, Panditrans warned that in addition to claims for


loss or damage to cargo,


operators could be liable for financial losses through errors and omissions, as well as third-party liabilities, and fines and duties imposed by state authorities. Furthermore, there is a range of costs arising from the consequences of any incident involving containers or other transport units. Panditrans deputy director


Alexander Petrenko added that liability to a contractual party, usually limited by applicable international and local laws and conventions, may be significantly increased depending on the circumstances of the incident, such as whether there was gross negligence or reckless conduct


all under Yusen Logistics’ house airway bill.” The consolidation operation


also includes customs clearance services in Moscow and St Petersburg, operated by Yusen


on the part of an employee or hired subcontractor. “The level of risk for some


types of incident, such as cargo theft and armed hijacking, may be higher in the region, but a lack of knowledge and experience of regulations, the law and judicial procedures are also likely to expose operators to considerable unexpected costs”, explains TT Club senior underwriter, Paul Knighton. “Operators should never consider cargo cover alone as sufficient. All carriers, truckers and forwarders need to carry out a thorough assessment of common liabilities, both local and international, when providing transport services to Russia and the FSU.” Following the country’s


well-documented economic and political difficulties, Russian container movements experienced an estimated 25% decline in 2015. However, a more recent economic recovery has fuelled increases in container transport during the first half of this year. The Russian Association of Road Carriers reports a 6% year-on- year rise over the six-month period, or 2bn tonnes of freight and container traffic on rail has gone up by 5.6% to 1.5 million


Logistics RUS LLC’s 100% owned subsidiary Yusen Terminal Logopark. Managing director, Yusen


Logistics Russia, Albert Abdulin, added: “We


are continuously the ongoing economic and


financial crisis in Russia most other companies’ programs for investment in modern logistics facilities have been downscaled or postponed, it


says. The company has


plans for further logistics facilities at Novorossiysk and other


developing some new services, particularly


block trains regions. The group is to


Novorossiysk and other ports. There has also been a


welcome increase in electronic transactions by Russian customs.


teu in the same period. While


growth is unlikely


to get back to levels seen before the global economic downturn, the increase in trade will encourage operators into the market – and the need to remind themselves of the risks. “Our 25 year plus experience in the FSU has lead us to conclude that in practical terms the transport operator is liable for almost everything in the event of an incident”, warns Petrenko. Analysing Panditrans’ claims


history show four main risk factors – namely


the human


factor – genuine mistakes, errors and omissions or fraud by own employees or sub-contractors; the professional factor – poor internal procedures and lack of basic risk management policies; the juridical factor – problems with international and local legislation and disputable court practices; and the insurance factor, namely the low level of insurance ‘culture’ and a shortage of insurance products specifically designed for the needs of transport operators. TT Club and Panditrans


strongly advise transport and logistics service providers operating in Russia and the FSU to carry out thorough risk management reviews to identify their possible liability exposure and to seek insurance cover that will give them assurance that the cost of such liabilities met.


can be adequately


looking for ways to innovate, grow and engage our global network to give our customers the best possible services and support them in doing their business in Russia.”


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