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ITE Transport and Logistics

Russia & North Africa: the next transport & logistics network?

From the Bronze Age to the Information Age, North Africa’s been one of the world’s most active regions. Separated from the rest of the continent by the mighty Sahara desert, the North African states exist within their own cultural and economic framework.

Rich in resources, culture, and produce, the region is unique on the African continent – and has long been under the eye of Russia.

Transport and logistics wise, North Africa is a major regional destination. It borders the Mediterranean to the North, Red Sea to the East, and the Atlantic for the West, so maritime transport is a key mode, as is air and road thanks to North Africa’s sheer size.

Basically, North Africa is an international cargo hub in its own right, connected by land, sea, and air to major shipping routes and markets. So where does Russia fit into all this?

North African trade turnover with Russia comes to the billions

Cargo flows from Russia into North African countries is a little lopsided, depending on the country and the nature of its relationship with Russia. Morocco, Russia’s second largest African trade partner, for instance enjoys decent bilateral trade. Libya, on the other hand, is essentially a one-way street for Russia goods.

Using data from the MIT Atlas of Economic Complexity, an online trade database, we can get the following breakdown of Russian turnover with its North African partners.

•    Russian exports to Algeria = $3.97 billion– mainly military equipment and arms
•    Algeria exports to Russia = $8.1 million – mainly fruits & vegetables ($6.7m)

•    Russian exports to Egypt = $3.78b – mainly arms and wheat
•    Egyptian exports to Russia = $373m – mainly fruit & veg ($281m)

•    Russian exports to Libya = $73.7m – mainly wheat
•    Libyan exports to Russia = negligible

•    Russian exports to Morocco = $725m – mainly mineral fuels
•    Moroccan exports to Russia = $567m – mainly fruit & veg ($375m)

•    Russian exports to Tunisia = $355 – mainly mineral fuels
•    Tunisian exports to Russia = $110m – mainly clothing and footwear

So the bulk of Russia’s trade with its region-wide partners is either huge multi-billon arms contracts or bulk exports of petroleum products or grains. North Africa, something of a regional breadbasket, ships vast amounts of produce not grown domestically in Russia to its Northern partner.

Indeed, this has become an important source of transport and logistics contracts in recent years. Russia is currently engaged in a trade tussle with the EU and other powers in a cargo embargo, meaning fruits and vegetables from those countries are off the table.

Morocco and Egypt are now sending greater quantities of fruits and vegetables to Russia, requiring a greater need for container services, and the temperature-controlled tech to make things fresh.

Cairo-based strawberry exporters Extreme, for instance, is investing in new modified atmosphere technology to keep its fruit fresh in air-transit to its Russian customers.

For reference, 25% of Egypt’s air freight sector is covered by food and drink exports.

Elsewhere, Russia is stepping up exports of wheat to Morocco, Tunisia, and Libya, shipping four times more to those countries across 2016 than in previous years – a trend continuing throughout 2017.

Black, Baltic Seas vital for Russia-North Africa trade

With Russia’s far eastern ports located literally half a world away from North Africa, they will rarely welcome a ship from Tunisia, Egypt or Algeria. Instead, it is Russia’s Baltic and Black Sea ports that are points of origin for many of its shipments to Africa.

The Black Sea is Russia’s prime grain exporting region. From ports such as Novorossiysk, cargo flows reach Central and Eastern Mediterranean sites such as Tunis or Algiers.
The Baltics, on the other hand, captures most of Russia’s Atlantic and Western Med cargoes. For instance, the Big Port of St. Petersburg will be the main port of call for Moroccan freight, where it will be loaded onto road and rail networks and distributed throughout western Russia.

In terms of air destination, Moscow nearly holds a monopoly on international trade. Russia’s three biggest international air hubs, Sheremetyevo, Domodedovo, and Vnukovo, are all located in or near Russia’s capital.
St. Petersburg Pulkovo ranks in the top 5 Russian cargo terminals by volume. With a new scheme being piloted there, regular airlines can enjoy up to 45% and 40% discounts on take-off/landing and aviation security fees there, suggesting it is poised to welcome more international freight.

Russia-North Africa a crucial market for logistics firms

The majors, like DHL, Kuehne + Hagel, or Volga Dnepr, are regulars on the Russia-North African cargo corridors. Indeed, activity between the states attracts players across the worldwide logistics industry.

Russia’s Oriental Logistics Company, German giants Rehnus, and France’s GEFCO are all amongst the transportation companies offering multi-modal solutions across the Russia-North Africa supply chain.

Interestingly, the trade between Russia and its African associates is opening up opportunities for logistics suppliers thousands of miles from the continent itself. For instance, Hungarian Foreign Minister Peter Szijjarto headed to Rabat, Morocco, in April 2017 to broach the idea of Hungary being used as a freight-forwarding hub for Moroccan freight into Moscow and beyond.

North African transporters: Meet Russia’s transport & logistics industry at TransRussia

In order to meet Russia’s top logistical decision makers, suppliers of transport and logistics services, or to demonstrate your produces and solutions to the Russian market, there’s one place to be – TransRussia.

The event is Russia’s biggest transport and logistics exhibition, designed to put international businesses needing transport services in touch with Russia’s logistics service providers.

Want to learn more about the show, or want to find out how you can take part? Contact our team today to get all the information you need on TransRussia.

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