Expert opinion on the current situation in the container market.

 The current economic and geopolitical situation has caused a large-scale adjustment and redistribution of logistics supply chains. To assess the situation in the container transportation market, we asked Natalia Kuvshinova, Lead Multimodal Transportation Development Specialist, to provide an expert opinion.

- Natalia, in your opinion, in what direction is the container transportation market moving now?

- The container transportation market is moving towards an increase in customer demand. The necessary infrastructure is being expanded and improved to handle the increasing volume of traffic.

 One such example is the United Shipbuilding Corporation, which is designing a 340 TEU container ship and plans to build it in 14 months.

 Another example is the port of Astrakhan, which plans to increase cargo turnover by 8 million tons per year by 2024.  The Far Eastern branch of Russian Railways has begun construction of two tunnels towards the port of Nakhodka, and production of autonomous refrigerated container ships has begun in Tula. This is a good trend for the development of the Russian market.

- In current situation, how has the geography of container transportation changed? What are the most relevant directions now?

- Currently, there is an active movement of cargo traffic through the ports of the Far East and land border crossings. Land route services from Vietnam to Russia are appearing. Turkey actively uses multimodal and road transport options to deliver cargo to Russia and has become a new transit hub for Russian importers. Carload shipments from Europe to Russia via Brest have been launched, and routes via Iran are being actively explored. Despite the difficulties that arise on the market, our company finds effective solutions for cargo delivery depending on the needs of customers.

- How are the rates changing?

- The rates are gradually going upwards. The Federal Antimonopoly Service approved an 11% tariff increase, but Russian Railways allows discounts in order to maintain the investment program. In my opinion, the increased rates in June will on average remain at the same level for the next 2-4 months.

- Natalia, in your opinion, what difficulties will the participants of the container transportation market have to face?

- Increase in cargo traffic may lead to accumulation of cargo in the ports of the Far East and at land border crossings, which in turn will lead to an increase in transit time. 

With the current exchange rate of the ruble, a decrease in export traffic is possible – in this case, there will be enough containers. If the exchange rate returns to January levels, exporters may face a shortage of equipment.

- What is the situation with cargo exports from Russia?

- Right now, there are not many export shipments from Russia compared to import shipments. The main constraints are infrastructure constraints, late receipt of GU-12 form, lack of accurate data on shipment volumes, inconsistency of declared shipment volumes according to actual volumes, as well as the cancellation of GU-12 form and other factors.

- In your opinion, what changes are taking place in the composition of imports?

 The freight composition of transportation is changing in accordance with the sanctions imposed on the transportation of certain groups of goods. There is also a decrease in the share of transportation of dangerous goods.

- Natalia, could you please share what makes Barrus Projects competitive in the container transportation market in these challenging times?

- Barrus Projects is actively expanding its network of agents and direct operators in order to offer customers a comprehensive service and have the flexibility in a rapidly changing market. There are plans to increase the fleet of leased and own containers, which allows us to reduce the total cost of transportation and ensure that Barrus Projects customers have priority in the provision of equipment.

 

 

Sincerely, Barrus Projects.