TransContainer calls for container transportation through Russia to be subsidized by the state

Moscow, Russia (Ports Europe) June 9, 2020 - Digitalization, excess of transport capacity, transit of sanctioned goods through Russia, changes in the logistics of state-owned companies are four new trends in the logistics market, according to Sergey Shishkarev, President of Russia’s Delo Group, and one of Russia’s wealthiest businessmen. As of March this year, Delo controls 99.641% stake in TransContainer (TC), Russia’s largest rail freight container operator and became the largest multidisciplinary logistics operator in the country. Delo first acquired 50% plus two shares of TC for nearly $1 billion in November 2019 from state railway operator - RZD (Russian Railways). In an opinion piece in the Russian edition of Forbes magazine in June, Shishkarev describes the launch of the largest container ship to date, at the end of April, in South Korea, which can take on board up to 24,000 containers. In mid-May, it set off with a record load of almost 20,000 containers. In the next couple of years, about 20 such vessels may leave their berths. As a result, a serious surplus of capacity may arise in the ocean transportation market. “We, as the owners of Russia's largest container carrier, cannot but be bothered by this news. The TransContainer development program includes a substantial increase in container transit through Russia. A large geography is the same resource for Russia as oil and gas. No other country in the world has simultaneous land access to so many sea basins and markets,” Shishkarev wrote. “Therefore, the President of Russia in his “May Decree” of 2018 set the task of increasing container transit through Russia from East to West by a factor of four by 2024. However, the widespread construction of large container ships against the background of the (coronavirus) epidemic will drive down ocean freight rates to minimum values and the Russian transit route at a higher delivery speed will be uncompetitive in price. Therefore, we proposed that the state introduces a program for subsidizing container transportation through Russia in order to increase transit volumes. Subsidizing about a third of the current tariff for the transportation of one container ($900-1,000) will attract new customers from among Asian and European companies. And it will create a multiplier effect on the territory of Russia along the entire chain in the form of new jobs in the logistics industry, new infrastructure and tax payments. There are examples of state support for the logistics industry. China has actively subsidized the overland transit of containers through its territory, in particular, within the framework of the geopolitical project One Belt, One Road (new Silk Road), having increased transit indicators more than 10 times in recent years. Egypt, which owns the Suez Canal and has recently invested billions of dollars in its modernization, has reduced tariffs for the passage of ships along a number of routes to 75% of the base for the period of the pandemic in order to save traffic.” Delo Group operates in the Azov and Black Seas, the Baltic Sea and in Russia’s Far East. Its key assets are stevedoring companies DeloPorts and GlobalPorts and the multimodal transport operator Ruscon. DeloPorts holding consolidates the Group’s assets at the Port of Novorossiysk, which are the NUTEP container terminal, KSK and Delo service operator (agency, bunkering and towing services). Since 2018, Delo Group controls 30.75% of Global Ports, the biggest Russian stevedoring holding. It includes First Container Terminal, Petrolesport, Moby Dik in St. Petersburg and Yanino Logistics Park in the vicinity, Ust-Luga port cluster, Vostochnaya Stevedoring Company in the Vostochny Port. Finland’s Multi-Link Terminals in Helsinki and Kotka also belong to Global Ports. The transportation and logistics segment of Delo includes the multimodal transport operator Ruscon and the railway operating company Transport Corporation. The Delo Group includes also Aleksino Port Marina shipyard, Russea yacht club, and NovomorNIIproekt Institute. TransContainer manages the largest fleet of containers and flatcars in Russia over the entire 1520 mm standard railway network (Russian gauge). It manages fleet on more than 300,000 routes in Russia and abroad. TransContainer has 31,660 flatcars; 85,699 large-tonnage containers; 411 automotive vehicles; 206 loading machines; owns 38 terminals in Russia plu three via subsidiaries and joint ventures Copyright (C) Ports Europe. All Rights Reserved. 2020.

TransContainer calls for container transportation through Russia to be subsidized by the state

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TransContainer calls for container transportation through Russia to be subsidized by the state

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