Russia to Freeze Road Tariff Hike

After massive protests by long-haul truckers and transport companies, the Russian government has decided to freeze  a planned increase of a controversial highway tariff for several months, according to the Journal of Commerce. Opponents say this increase could shrink Russia’s domestic transportation market by 30 percent.

The current rate of the tariff, which was introduced in November and applied to trucks weighing more than 12 tonnes (13.2 tons), is set at 1.53 rubles ($0.02) per kilometer (0.62 miles). The government had planned to nearly double the tariff to 3.06 rubles per kilometer beginning March 1.

The government will revisit the tariff issue by October 1, according to Arkady Dvorkovich, Russia’s first deputy prime-minister, who said the freeze would cost the government 25 billion rubles. The government has said the fee would be used to build road infrastructure throughout Russia.

In contrast to maritime container transportation, the Russian market for overland container shipping remains highly competitive because of its low entry barriers. The market is highly fragmented, with thousands of players, a significant portion of which consists of individual entrepreneurs, competing for relatively small revenue. That means that pricing in the industry remains very sensitive to additional costs and the introduction of additional fees will force carriers to raise prices for their services for at least the amount of the additional costs.

Thus, the majority of these costs will be shifted to local consumers. Russian retail chains have already begun raising their prices.

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Intermodal Corridor to Reduce Russia-India Transit Time

The transit time for containers between Russia and India will be twice reduced  thanks to a recent agreement between the countries to launch a new multimodal container route, said Russian Railways JSC on February  15th.

The majority of containers from India currently reach Russia via sea transportation. Containers traveling to Moscow from Jawaharlal Nehru Port in India take about 40 days to reach their destination. The new intermodal route involving marine, rail, and road transport will reduce transit time to 20 days, and eventually 14 days in the near future.

North-South transport corridor is intended to connect Northern Europe to Southeastern Asia. It will serve as a link to connect the railways of Iran, Azerbaijan and Russia.

The route is expected to be launched in the middle of March. It is planned that RZD Logistics, the logistics arm of the Russian national railway RZD, will operate the new route.

Stakeholders have already agreed to set competitive tariffs on the new route that will not exceed $3,000 per container.

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Russia-Poland Motor Freight Traffic to Resume for Two Months

Russian Deputy Minister of Transport Nikolay Asaul advised that Russia and Poland will resume freight trucking for two months under a temporary agreement, which comes after a short halt in transportation between the two countries.

As we reported earlier this month, freight transport between Russia and Poland was suspended on February 1 because of a lack of an agreement on quotas for the issuance of permits for 2016.

A temporary agreement on the ground transportation of goods was reached on Friday, February 19. The carriers of the two countries will be able to resume freight traffic on 20 February.

Russian and Polish freight carriers  received  20,000 permits for each country until April 15. 10,000 permits for the Polish side are intended for the traffic between Russia and Poland and transit and the other 10,000 ones for carriage from third countries, Asaul said. Russia will have 19,500 forms for bilateral carriage and 500 for carriage to third countries.

The temporary agreement will be replaced by a permanent one once the two sides analyze the work of the freight carriers after the temporary deal expires, the minister explained.

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Russia Bans Transit of Ukrainian Trucks

Starting from February 16th,  Russia has completely and officially stopped the transit of Ukrainian commercial vehicles through its territory. The decision was taken because of the blockade of the movement of Russian trucks through the territory of Ukraine, said Russia’s Ministry of Transport in a statement.

More than 300 Russian trucks are unable to deliver goods to Ukraine, while roughly 500 trucks returning to Russia from the EU can not pass through Ukraine. The situation is aggravated by an unofficial ban on the transportation of Russian containers and other cargo through Turkey.The Russian Ministry of Transport has told shippers and transport companies to re-route shipments via sea despite the longer times for customs and other procedures.

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Container Shortage Causes Russian Rail Service Cuts

A weakening economy, exacerbated by the price of oil – Russia’s top export –  and Western trade sanctions has created a shortage of 400,000 containers in Russia, according to the Journal of Commerce.

As a result, containerized rail services between Moscow and Ekaterinburg, Moscow and Vladivostok, and St. Petersburg and Ekaterinburg have been cut. The existing container shortage in Russia inevitably leads to an increase in export freight rates, which have already increased by 10 percent this year on a year-over-year basis.

Russia’s reorientation of its trade toward the Asia-Pacific has led to an accumulation of containers in its Far East, China, and the city of Khabarovsk on China’s border. Some containers are also spread throughout the EU, and the current shortage may pose a threat to the fulfillment of contractual obligations of the companies while driving up export costs, the companies said.

“Due to the current financial crisis in Russia, the number of imported containers has declined, which resulted in their shortage in the Russian market.”, said Alexander Datsyuk, head of the Northwest branch of the Russian Association of International Road Carriers.

The situation is aggravated by the fact that a significant portion of containers is exported from Russia empty. At present, only 50 percent of the containers exported from Russia are loaded,  according to official data of the Russian Ministry of Transport.

Container lines do not want to load their empties with Russian cargo, since it is much more profitable for them to use the same containers for exports from Nordic countries, analysts at the ministry said.

In the meantime, despite the ongoing shortage, Russian shippers currently have no plans for the purchase of additional containers, fearing imports will grow in due course and that new purchases would create an excess of containers in the domestic market.

Need help with shipments to Russia?  RCL has extensive experience shipping in and out of Russia – contact us today for assistance with your shipping needs!

Russia Aims for Customs Reforms to Speed Cargo Processing

The Journal of Commerce reports that Russia is planning to significantly streamline customs clearance procedures with the aim of speeding cargo handling at its borders and seaports.

The reforms should be completed by May or June  pending decisions on several proposals  that are due by April 1, according to a spokesperson for Russia’s First Deputy Prime minister, Igor Shuvalov.

The Russian Federal Customs Service  (FCS) will also establish a new single window electronic platform able to process all of the necessary payments and documentation required by customs, the spokesperson said.

Currently when ships arrive at Russian ports, handling of each container requires up to 40 different documents. The situation is aggravated by the fact that documents must be provided to different controllers.  In OECD countries, the paperwork for processing a container takes no more than five hours with a cost of $36,  in the case of Russia these figures are estimated at 43 hours and $500 respectively, according to statistics of the FCS.

The cost of inspections at the Russian border is estimated at about 300 euros per container, while the cost of a customs warehouse may vary in the range of 15,000 to 150,000 rubles daily ($230 to $2,300), according to data from the FCS. After registration of all the necessary documents, the examination of goods takes 10 to 14 days.

There are also plans for the introduction of an automatic registration for e-declaration and to accelerate the process for issuing digital signatures during cargo clearance. The automatic registration is already being used for container exports and was introduced for imports at 12 customs stations in December.

Another planned measure involves the introduction of technology allowing an importer to submit a declaration of goods regardless of location.

Leading Russian and foreign shipping companies have already welcomed the latest plans, the implementation of which would cure an acute need, they say, as unloading a container vessel sometimes requires the preparation of myriad different documents, each of which requires certification by a seal.

Need help with shipments to Russia?  RCL has extensive experience shipping in and out of Russia – contact us today for assistance with your shipping needs!

Motor Freight Traffic Between Russia and Poland Suspended

Motor freight traffic between Russia and Poland was suspened on February 1 after the two countries failed to reach agreement on permits for 2016, according to the Russian news outlet RBC.

The issue arises from the expiration of an agreement Sunday that allowed Polish trucking firms to haul goods to and from Russia after negotiations to extend the agreement failed. Russia provides permission to transport cargo – both transshipment or bilateral – based on the geographical location of a freighter instead of the place of loading, and Poland’s permission was not renewed as a result of the negotiations’ failure.

According to the ministry the new regulations are aimed at tighter control of Russian permits issued for motor transportation of goods from other countries, but Polish officials insist the regulations imply a higher level of state control over freight traffic.

Polish carriers currently handle around 70 percent of the shipments moving from the EU to Russia. Russia is trying to protect its own shipping interests, which handle around 30 percent of that market, according to a spokesperson of the Polish Ministry of Infrastructure and Construction

The ministry points out that Poland hasn’t offered any solution to the problem other than demanding that the federal law be changed. In 2014 a law was passed in Russia introducing stricter registration rules for international freight traffic

The ban on motor freight traffic between Poland and Russia effective from today will not affect the range and prices of goods in large Russian shops, Executive Director of the National Retail Chain Stores Association Valentin Voskresensky told TASS on Monday.

If an agreement is not reached, the majority of transshipment cargo that Polish carriers once handled will have to be diverted to Baltic and Nordic ports, increasing transit times and costs.
RCL Agencies will monitor the situation and provide further updates once available.


Turkish Exports Blocked at Russian Border

Around 1,250 trucks carrying Turkish exports have been blocked from entering Russia and are stranded at border posts awaiting clearance, reported Reuters on November 30th.

Turkish trucks will soon be able to travel to Central Asia using Ro-Ro ships from Baku after Russia banned transit in the wake of the downing of one of its jets last month, the International Transporters Association (UND) said in a written statement on December 2nd.

Transit passage fees for Turkish trucks will be slashed by 40 percent on their route through Azerbaijan, Kazakhstan and Turkmenistan. The cost of Ro-Ro shipments via the Caspian Sea has also been cut by 20 percent.

Following the incident, in which two Turkish F-16 fighters attacked and shot down the Russian bomber, Russian government imposed sanctions on Turkey. Economic sanctions on Turkey include labor force restrictions and bans on some goods and services. Charter flights from Russia to Turkey are banned, tour firms are told not to sell any holidays there, and unspecified Turkish imports are outlawed, and Turkish firms and nationals have their economic activities halted or curbed.

Turkey mainly sells food, agricultural products and textiles to Moscow and is also one of the most popular holiday destinations for Russians. Around 50 percent of Turkey’s exports into Russia, which totaled $6 billion last year, go by land.

Stay informed with RCL Agencies updates about trade regulations and global shipping.

New road weight restrictions in Russia effective January 1st, 2016

As per latest Russian load regulations, maximum allowed total vehicle weight (truck plus trailer and container with cargo) is limited to:

  • 40 tons for 5-axis vehicle
  • 44 tons for 6-axis vehicle

Depending on type of truck and trailer,maximum cargo gross weight (excluding container tare):

  • 20 tons for 20′ DV
  • 21,5 tons for 40′ DV and 40′ HC

Delivery of heavy cargo, over 20 tons/20′ and 21,5 tons/40′ , by trucks, will still be possible but will require special permit for trucking companies.

In addition,  effective 15/11/2015 overweight surcharge will be applicable for all trucks with permissible weight over 12 tons.

Automated control gates will be installed at federal roads and fines will be billed automatically if trucking company didn’t pay this surcharge prior to haulage.

In case cargo weight is higher than the above mentioned limits, alternative rail solutions remain available in Russia.

The new restrictions are expected to become effective January 1st, 2016 – however, the situation and restrictions could change.   RCL Agencies will provide further updates once available.

In case cargo should be moved by road, RCL Agencies will still be able to evaluate, provided a special permit is agreed with local trucker.

Need help with shipments to Russia?  RCL has extensive experience shipping in and out of Russia – contact us today for assistance with your shipping needs!

Russian Trucking Costs May Rise Due to New Highway Tolls

Trucking companies hauling more than 12 tonnes (13.2 tons) in Russia will have to pay new federal highway tolls starting November 15th  that could increase transport costs up to 15 percent, according to the Journal of Commerce.

The planned charge  of 3.73 ruble ($0.05) per kilometer could bankrupt some trucking companies that aren’t able to pass the added cost onto customers.

Several Russian shipping companies specializing in trucking are considering submitting a petition to Prime Minister Dmitry Medvedev asking to him block the controversial decision.

The situation is aggravated by a decline in freight rates that has averaged 30 percent this year, compared to 2014. For example, the rate for transporting one container by truck from Moscow to St. Petersburg has fallen from 60,000 rubles to 40,000 rubles.

The government expects the tax will bring in an additional 40 billion rubles for the federal budget in 2016. However if the government pushes ahead with the plan and refuses to reduce the charge, shippers plan to start protesting when the tax takes effect.

RCL will provide more info as it becomes available – stay informed with updates from RCL!