Growth Of Russia’s Containerized Shipments Undermined By Inadequate Infrastructure

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Shippers project a 15 to 20 % yearly growth in Russia’s domestic containerized shipments up to 2030 but it can be undermined by the lack of adequate infrastructure and equipment. If containerization is increased in Russia, it can result into significant cuts in the transport costs of the country.

According to statistics from the Russian Ministry of Transport, transport cost account for 15% to 20% of a shipper’s overall budget. Compared to Western countries, shippers only spend 7% to 8% for transportation. Based on the records of transportation conglomerate Fesco Group, the amount of cargo in Russia that can be containerized is about 2 billion tonnes. Estimates reveal that only 6% of that cargo is moved through containers.

The transport ministry said that from 2000 to 2012, Russia’s container transportation has grown tenfold and the container industry’s share of the dry cargo transported in Russia improved from 10.8% to 16.2%. In 2014, there was significant decrease in growth due to the stagnation of Russia’s economy. However, now that the economy is starting to recover, it is expected that growth could skyrocket again if infrastructure will be able to keep up with demand.

According to Arkady Volovy, head of Licensky, a producer and importer of paper products, Russian trucking lacks the equipment and infrastructure to handle and store containerized cargo. Most of the Russian trucking, rail and warehouse companies still use pallets for break bulk shipments where cargo is transported through boxes, bags, crates, drums or barrels instead of shipping containers. This is the reason why there is underinvestment in container handling equipment in Russia’s rail network.

Sergey Skorikov, the deputy director of Kovry, a carpet and textile importer, said that there is an acute shortage of rail stations that are capable of handling 20-foot and 40-foot containers. Only about 5% of Russian rail stations have the capability.

Shipping containers are a vital part of the economy particularly with trade globalization. Through container transport in Perth, import and export of goods will be possible. The company is prepared to address the strong demand for containers to improve the efficiency of the global shipping industry.

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