Sea and river freight transportation: 2023 results and plans for 2024-2025

Let’s take a look at how the sea and river transportation segment developed in 2023 and note the current trends of the 2024-2025.

According to the UN, sea and river transportation accounts for more than 80% of the world trade turnover. Not surprisingly, this type of cargo transportation is also in demand in Russia: it is washed by 12 seas and the number of rivers exceeds 2.8 million.

Key results of 2023

According to the Russian Ministry of Transport, the volume of sea freight transportation at the end of last year increased by more than 23% compared to the figures for 2022. Undoubtedly, the “low base” effect of 2022 played its role, when, due to the geopolitical situation, many market players and customers spent some time on reconfiguring logistics links and searching for new partners from countries that did not join the sanctions.

In turn, the cargo turnover of seaports in 2023 increased by 5%, exceeding 883 million tons. It is worth noting a further change in the vector of trade turnover from west to east. While in 2021 almost half of the cargo traffic was accounted for by Baltic ports, in 2022-2023 the Far East took the lead (about 60%), while the share of Baltic ports was approximately halved (to 25-27%). In some ports in the western part of Russia container turnover decreased by 70%, while in the eastern part of Russia it increased comparably. Interestingly, the Caspian Basin seaports showed the greatest growth, with cargo turnover increasing by almost a third.

One of the most promising maritime transport arteries for container traffic is the Northern Sea Route, the volume of traffic through which exceeded 36.2 million tons in 2023. This is primarily due to the shorter route (almost one and a half times: 20 days versus 33 days) as compared to the route through the Suez Canal, which, moreover, has significantly shallowed in recent years. Undoubtedly, the passage of ships through the Northern Sea Route is often possible only with the help of icebreakers, but taking into account the increase of the Russian icebreaker fleet this is not a significant obstacle. If we compare the Northern Sea Route and the route from Asia to Europe via the Cape of Good Hope, then in the second case the route will be about 20 days longer, and the cost will be twice as expensive.

The volume of transportation by inland waterways in 2023 reached 108.8 million tons, which is 6.4% lower than in 2022. The length of waterways in the Russian Federation exceeds 102 thousand kilometers, and Russia is second only to China in this indicator. At the same time, the share of water transportation in the GDP of the Russian Federation is extremely small - only about 2%. For comparison, in the Netherlands this indicator is 34%. But under current conditions, Russia has good opportunities to increase this indicator.

Trends for 2024 and prospects for 2025

This year we should expect further growth in the volume of cargo transportation by water transport. According to the forecast of experts from Sber Analytical Hub, this indicator may grow by about 10%. According to GTLC's calculations, the volume of transportation by sea and river transport grew by 2.2% and 4.3%, respectively, in the first quarter. The biggest growth may be in the segment of inland water transportation, the volume of which may grow by 13%.

We should expect a further increase in the volume of transportation along the Northern Sea Route. Moreover, the icebreaker fleet is gradually increasing and new ships are being laid down.

In the first half of 2024, there is a trend towards equalization of transportation volumes. Ports in the northwestern part of Russia are showing an increase in utilization, while the same indicator for ports in the eastern regions is slightly but decreasing. However, the ports of the Far East are still the main trade gateways.

An important factor worth paying attention to is the development of related infrastructure. It is not enough to build a port and organize product deliveries through it, but it is also necessary to build a warehouse infrastructure, as well as to build roads and railroads. Thus, Russian Railways plans to build several large transport and logistics hubs (Slavyanka port, Sukhodol terminal, Kemerovo transport and logistics center). Also, construction of a large terminal in the south of the Moscow region will be completed by 2025, the capacity of which will exceed 420 thousand TEU per year. Transcontainer, the largest railroad container operator, is the customer of the construction, which, despite the sanctions, continues to operate in a normal mode. By 2025-2027, a border terminal in Zabaikalsk and a dry port in Primorsky Krai will be commissioned in the Far East.

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