2022 June 28
Cargo turnover in Russia’s Baltic Basin is dwindling amid the sanctions and ‘eastward turn’, especially in the container segment. Logistics experts suggest loading the facilities with containers from the Central Transport Hub while Belarus is offering its cargo. Is that enough?
A great ‘eastward turn’ of Russian logistics, which actually has been underway for the recent years is now gaining momentum thus depriving the terminals of Saint-Petersburg and the Leningrad Region of considerable cargo volumes. Container segment faces the most acute situation but dry bulk cargo is likely to suffer the same fate, especially upon completion of the Eastern Operating Domain expansion.
According to the forecast of Dmitry Pankov, MC Delo, container turnover in the North-West ports will sink by 85% in June.
“In June, the container turnover in the ports of the North-West region is expected to fall by 85% versus June 2021. There were some movements before April — the lines were taking out their containers, there were calls. In May, container turnover in the North-West region fell by 60% versus May 2021”, — he said.
IAA PortNews used to warn about excessive container facilities in the region back in 2017. At that time, we estimated the excess in the Baltic region at 3.7 million TEUs per year. Now, analytical agency InfraNews estimats it at 60% of the existing capacity.
It seems that full load is impossible. However, there are some alternatives.
Belarus President Aleksandr Lukashenko has recently promised Leningrad Region Governor Aleksandr Drozdenko 20 million tonnes of Belorussian cargo per year. In particular, potash fertilizers can be handled in Bronka. A dedicated terminal is to be built there although no parameters of the project have been revealed so far. Anyway, that is not 20 million tonnes per year. The facility is to have maximum annual capacity of 11-12 million tonnes and it will take years to build the terminal. As for handling of fertilizers in containers, this alternative is more costly and does not seem realistic to ensure the required load. However, it can be considered as a viable temporary alternative of Bronka loading.
Agreement on Belorussian oil products was reached last year. Now, it is the turn of containers.
According to Belorussian Railways, it carried over 1.2 million TEUs in 2021, transportation of transit containers totaled about 930,000 TEUs. Thus, potential volumes to be taken over by container terminals of Saint-Petersburg are hardly to exceed several hundred of thousand of containers. Besides, it is not clear what fleet can carry those containers and where. In fact, even this figure is quite obscure although certain amount Belarussian containerized cargo can come to Bronka. In late May 2022, there were reports about some negotiations between MSCC Bronka and the Belorussian side.
Focus of container facilities on domestic logistics seems more realistic for other container terminals. When answering the question of IAA PortNews at ShippingRU 2022, Stanislav Tobin, Head of International Logistics Department, Arivist Group, said that container terminals of the Black Basin can be used for unloading of the Central Transport Hub which is overloaded today. According to him, Baltic Customs registers the decrease of cargo flow of 70-80%.
Refocusing of Saint-Petersburg container terminals on domestic cargo flows can ensure their loading, says Stanislav Tobin.
However, that does not mean termination of container loading on ships I Saint-Petersburg. First of all, handling of non-sanctioned goods continues. Secondly, some new services appear. For example, Petrolesport has recently started handling new container service connecting Great Port of Saint-Petersburg and Nhava Sheva, the largest port of India.
That said, excess of container facilities in the Baltic region will still be great: loading of all the facilities was hard five years ago and now it is just impossible. In this situation, Bronka and Lomonosov area has the highest advantages due to its location, depth and direct access to the ring road.