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ITE Transport and Logistics

Russian container trade picks up

Despite ongoing economic sanctions lowering imports, Russia’s Baltic ports saw a pickup of container activity in 2016.

50% of Russia’s container trade came through its Baltic ports in 2016; the equivalent of 2 million TEUs. This was a 1.7% year-on-year rise compared with 2015 as Russia begins to recover from the drop in oil prices that damaged the nation’s economy. Additionally, in the light of ongoing sanctions, it suggests Russia’s ports are not closed to international trade.

Let’s look at an individual example. The Big Port of St. Petersburg, Russia’s biggest Baltic facility by some margin, enjoyed a 1.8% rise in traffic across the last 12 months, handling 1.8 million TEUs. Imports grew 4.4%, signalling recovery at this most vital of ports.

Russian port operators should certainly be rejoicing at this news. It represents a massive contrast with the 30% decline in Baltic traffic seen in 2015. Terminal utilisation at the region stands at around 40% - meaning ample room to handle increased traffic.

Container volumes in Russia’s most vital port region are set to see a 15% increase across 2017. Not only that, but these ports could snap up more of the Baltic’s container trade in the near future. At present, Russia holds a 20% market share of Baltic port traffic, with estimates suggesting this could rise to more than a third in coming years.

All of the above increases in activity are good news for Russia’s transport and logistics sector. What’s more, January 2017 brought 5% more year-on-year traffic – impressive during a month where 11 working days are lost due to holidays. Such rises bodes well for a busier 12 months.

However, much of Russia’s container traffic stems from consumer goods. Demand for such products is low, thanks to the ongoing difficult economic situation. Shippers are hoping for a shift in Washington’s attitude towards Russia with the election of Donald Trump.

Trump’s government has been hinting at the possibility of easing, or removing, sanctions placed on Russia over two years ago. Shippers across Russia are hoping that the lifting of such sanctions will stimulate demand, resulting in further growth of container shipments.

The Trump presidency has so far been a whirlwind of controversial decisions. Shippers may have to wait and see what the future holds, regarding sanctions. Still, 2016’s container volume growth at the Baltic Sea ports, and this trend continuing through January 2017, means optimism is returning to the Russian sea freight industry.

Source: JOC.com


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