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.

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