The draft restrictions on the work of foreigners in the Russian market for regular foreign trade container transportation have been sharply criticized by shippers. The main objections are the lack of our own fleet, the possibility of complicating the work of those carriers who did not leave in 2022, and the restrictive nature of the requirements for access to the market. According to business estimates, as a result, Russia may lose container connections with 69 countries in exports and with 58 in imports, which are currently provided by foreign companies.
The draft presidential decree on measures to regulate the activities of foreign shipping container companies in Russia did not meet with unanimous support from the market and departments. At a meeting of the working group at the Ministry of Transport on April 9, it follows from its minutes, which was seen by Kommersant, a conclusion was made about the need for a dialogue between shipowners, cargo owners and stevedores “with the development of specific digital indicators that can remove the objections” of opponents, if it is possible to balance the cargo base with freight capabilities.
As Kommersant wrote (see “Kommersant” dated March 20), the proposed restrictions on regular foreign trade container transportation will affect all liner operators that do not meet a wide range of fairly stringent criteria. Separately, the possibility of returning companies from the attached list of departed players from unfriendly countries, including Maersk, CMA CGM, Hapag-Lloyd, etc., is limited. Among the admission criteria are registration of the shipowner, carrier and operator under the laws of the Russian Federation, the share of the final Russian participant in the amount of more than 50%, the obligation to take sanctioned cargo, insurance or reinsurance in Russia, agreement to make Russia the place of consideration of corporate disputes. In this case, all vessels operated on the line must belong to the operator by right of ownership, and transportation must be carried out only by the operator’s own vessels.
The draft decree may be supported by federal executive authorities if the opinion of shippers is taken into account, the protocol says. Thus, it is indicated there, Russian Steel believes that domestic container lines will not be able to handle cargo flow due to the lack of the required number of ships.
A Kommersant source in the metallurgical industry says that for some grades of steel that are transported in containers, the capabilities of the Russian fleet are sufficient for 15-20% of the annual volume of maritime exports.
The Russian Chamber of Shipping, in whose edition the act is being considered, believes that “domestic shipowners were able to cover the volume of transportation in 2022 and will be able to cope now.” The chamber did not respond to Kommersant’s request. The Association of Commercial Sea Ports (ASOP), on the contrary, warns that the adoption of the document could lead to a sharp reduction in cargo turnover at container terminals.
ASOP told Kommersant that the project contains significant risks that when it is introduced, a number of foreign shipping lines will leave the Russian market – including those that, despite the sanctions imposed by the governments of their countries, did not leave, but continued to operate in Russian ports, withstanding serious pressure. “We expect a sharp and significant decrease in the cargo turnover of our container terminals, the loss of a number of export and import directions,” ASOP adds. “Consequences are also expected in the form of an increase in the cost of freight with inevitable changes in maritime logistics, a decrease in offers in the sea transportation market to/from the Russian Federation, and monopolization of this market by the remaining companies. Part of the foreign trade turnover will cease to exist due to higher transport costs.”
According to ASOP, this will make the foreign trade of the Russian Federation dependent on the logistics capabilities of the remaining companies, both in terms of the composition of their fleet and in the directions of transportation, despite the fact that these opportunities are limited, and attracting investments to expand them in the current conditions may take years. A Kommersant source in one of the stevedoring companies says that special conditions or exceptions should be created for players who have not left the Russian market, and the introduction of restrictions should not harm Russian exporters.
Kommersant’s interlocutor in the industry considers it disingenuous that the adoption of the decree will not entail negative socio-economic consequences. The departure of operators from unfriendly jurisdictions who continued to operate in Russia means the loss of foreign markets for Russian exports and markets of friendly countries for food imports. It is thanks to them that Russia receives bananas from Ecuador and Costa Rica, citrus fruits from Morocco and Egypt, grapes and berries from Chile and Argentina.
In the event of a ban, Russia will immediately lose container traffic with 69 countries in exports amounting to 39 thousand TEU and with 58 countries in imports (103 thousand TEU); there is no alternative for Russia on these routes.
A number of Kommersant’s sources in the industry point to the impossibility of meeting some of the new requirements. One interlocutor says that most of the fleet transporting containers on the Russian market is on time charter. Although it can be assumed that the introduction of the requirement for transportation strictly by own vessels is dictated by considerations of transport safety, the market is structured differently, a Kommersant source says. Another Kommersant interlocutor notes that violation of sanctions in the EU and the United States is criminally punishable and the requirement for priority transportation of goods subject to restrictions is simply impossible.
Executive Director of the ESP (unites railway container operators) Sergei Avseykov reminds that the topic of a sovereign fleet is extremely sensitive for domestic shipowners. “There are many proposals for non-financial measures to support and stimulate investment by domestic shipowners, which we consolidated and sent to the departments,” he says. “These are not only restrictions on foreign lines, but also measures aimed at loading.” The position of the ESP is to implement them as quickly as possible and fine-tune them after the practical results of their application, adds Mr. Avseykov.
The Delo Group of Companies said that they fully support the development of domestic container carriers, including sea lines, in difficult conditions of the withdrawal of global players providing maritime transport services for domestic foreign trade. “At the same time, we believe that the regulatory measures under discussion should not harm any participant in the Russian container transportation market to benefit the interests of a particular sector,” the company notes. “In this case, we are talking about stevedores, who are the largest private investors in transport infrastructure and key participants in the transportation process.” They emphasized that they are calling for a balanced solution based on an analysis of the real need for sea container transportation – in terms of volumes, directions and composition of the service – and the actual capabilities of Russian line operators, and also pointed out the undesirability of additional barriers in the difficult situation of reducing foreign trade cargo turnover of seaports.
