The state of transport and logistics in Russia: 2019 update

As Russia’s transport and logistics industry maintains its foothold in the international market, we take a look at how things are panning out in 2019.

From large-scale infrastructure projects across the region, to increasing cargo volumes across nearly all seaports, Russia’s transport and logistics industry is sitting in good stead as we near the tail end of 2019. Here, we take a deep dive into the most prominent changes in the market in Russia. 

The ‘New Silk Highway’ has a completion date

Construction has begun on the new highway that will serve as a critical part in the China-Western Europe transport corridor. The new highway, which will stretch from Russia’s border with Kazakhstan to Belarus, has been described as the “construction of the century” because of the scale of the infrastructure mega-project. 
Upon completion, this transport corridor is set to be the primary transport channel of the Silk Road Economic Belt, the overland portion of China’s Belt and Road initiative. The highway, once completed, is slated to allow trucks to travel between China and Europe in just eleven days, which would make it vastly quicker than the 30-50 days by sea and 15 days by rail alternatives.

Big spending continues into a wider Russian infrastructure overhaul

As well as the large sum it’ll cost to develop the China-Western Europe transport corridor, we’ll also see the Russian government investing a reported 6.3 trillion roubles into a six-year plan to modernise the country’s highways, airports, railways, ports and other transport infrastructure. 
Under President Vladimir Putin’s presidential decree, a 3.5 trillion roubles investment fund was set up with the aim to finance up to 170 construction and infrastructure projects from 2019 to 2024. 
Projects reported to be under this scheme include the Moscow-St. Petersburg high-speed railway, the Dzhubga-Sochi highway and modernising the country’s northernmost airport, Pevek. 

Loading on Russian railways saw a 0.2% increase from August 2018

The latest figures detail loading on Russia’s railway network in August of this year as 0.2% more than the same month in 2018 – amounting to 109 million tonnes. While freight turnover in August 2019 decreased by 2.1% compared to the same period last year, from January to the end of August 2019, freight turnover rose 0.9% to 1,734.1 million tonnes-km. Railways carried items including coal, oil and petroleum products, chemical and mineral fertilisers, timber, grain, ferrous metals and construction materials. 

Russian seaport throughput grows 2.9%

In the first eight months of 2019, the seaports of Russia handled 556.3 million tonnes of cargo, which is a 2.9% increase, year-on-year. 
If we break this down into transhipment of dry and liquid cargo, dry cargo totalled 248.0 million tonnes (down 4.2%). This included:
• 116.9 million tonnes of coal (+8.4%)
• 24.0 million tonnes of grain (-35.3%)
• 37.4 million tonnes of containerized cargo (+6.1%)
• 18.2 million tonnes of ferrous metal (-11.5%)
• 12.0 million tonnes of mineral fertilizers (+2.1%)
• 5.9 million tonnes of ore (+26.2%)
• 3.3 million tonnes of timber (-9.4%)
Liquid bulk cargo totalled 308.3 million tonnes (up 9.5%), which included:
• 185.5 million tonnes of crude oil (+11.4%)
• 96.8 million tonnes of oil products (-0.7%)
• 21.7 million tonnes of liquefied gas (up 1.6 times)
While operators of seaports in the Azov-Black Sea Basin saw a decrease in cargo traffic by 7.7% with 168.5 million tonnes being handled, other territories faired more positively. There were cargo increases in the following:
• Artic Basin seaport operators handled 69.8 million tonnes – 19.4% growth
• Baltic Basic seaport operators handled 172.0 million tonnes – 5.8% growth
• Caspian Basin seaport operators handled 4.8 million tonnes – 46.7% growth
• Far East Basin seaport operators handled 141.2 million tonnes – 5.5% growth

The retail sector is transforming logistics services in Russia

As the retail sector continues to evolve with the growth of e-commerce, retailers are adapting their logistical infrastructures to cater to online orders. 
“The speed and reducing number of mistakes in orders’ picking and picking, as well as returns management are increasingly critical to competitive success. This leads to an increasing need for additional warehouse space and to the implementation of latest technological solutions,” said the Head of Industrial & Warehouse Department, JLL, Russia & CIS, Evgeniy Bumagin. “Under the influence of new trends, the warehouse market is undergoing structural changes: logistics companies actively promote fulfilment services, the largest online stores and marketplaces start to provide logistics services.” 
In the first half of 2019, Bumagin noted “positive momentum in the warehouse property market.”

Ready for TransRussia 2020?

As Russia’s only international transport and logistics exhibition, this is an event you want to mark in your calendar for 2020. For exhibitors, you can meet nearly 17,000 cargo owners freight forwarders, retailers and others in need of transportation services and technologies on the Russian market. 
Visitors are primed for purchasing, and more than two thirds will only attend TransRussia amongst industry events. 
Book your stand today and get ahead of your competitors in the market. 
To find out more, contact our team for more information on this industry-leading international event.