Russia’s largest seaports and transport companies plan to ramp up services they offer, ranging from cargo repacking to help with customs clearance, as Baltic ports and containerized rail providers vie for their container volume.
According to some Russian shippers and foreign companies operating in local markets to date, the number of stevedore and transport companies in Russia providing a wide range of services has been limited, due in large part to the technological inadequacies of Russia’s facilities, which also lengthened cargo processing, and in some cases, did not safeguard cargo.
This lack of service upgrade has occurred despite Russia’s increased participation in trade.
According to data of the Russian Association of Commercial Seaports, January-to-July container cargo volume was 2.95 million TEU, up 11.5 percent from the same period in 2017. At Far East seaports, the growth rate increased 13.5 percent from the same period last year.
In addition to loading/unloading cargo and other standard operations, the expanded range includes cargo repacking, marking, and assistance during customs clearance, as well as assisting freight that’s changing transport modes.
According to Russian business professionals and shippers from the Russian Union of Industrialists and Entrepreneurs, the public association of Russian business professionals, there’s large shipper demand for complex services such as transport to the rail head — a service that can reduce transit time by one to two days.
Competition from Urkaine, Poland, Lithuania
Further, competitive pressures make a strong case that a Russian port service upgrade is needed, if the nation wants to retain a sizeable portion of both regional and global trade. Ukraine’s Odessa port, the nation’s largest, has announced an expansion plan. Meanwhile, Chornomorsk port, with a 1.15 million TEU annual capacity, hopes to increase is volume with the arrival of Hutchison Ports, which signed a 49-year lease. Also, in Poland, DCT Gdasnk terminal at Gdansk port is building business with feeder operators, who use it as hub and forward cargo to deepsea carriers. And Lithuania’s recently modernized Klaipėdos Smeltė Terminal is vying for Asian shippers transporting cargo to European Union destinations.
Some Russian companies have specialized services for cargo crossing the Russian border. These services include recompleting and reforming cargo batches as well as making various changes in transport and shipping documents and contracts. Another service in demand is free or very low-cost cargo storage without customs fees. Some Russian ports provide 60-day free storage — much sought because customs can take two weeks to complete.
Concerning customs clearance, Russia plans to standardize it, starting in 2019, with a single IT system, beginning with the Big Port of St. Petersburg, then later at other seaports around the country. The system will replace the outdated, twentieth century paper technologies still in use. Current customs clearance time at the Big Port is three to six days; under the new IT system, that will be cut to one to two days.
Representatives from Russia’s leading seaports and the government believe they will be able to attract additional shipper volume with the speedier system. And, these parties agree, failure to implement better services and faster customs will result in Russia losing container volume to neighboring Baltic state ports.
Contact Eugene Gerden at email@example.com.