4 September 2024

Eastern Polygon container logistics: challenges and new opportunities

The Far East remains one of the most sought-after transport routes in Russia, particularly for the import of goods. Despite its development, the infrastructure's capacity remains limited. Insufficient container loading facilities, a lack of capacity at border checkpoints and ports, are hindering progress. Solutions may include extending container trains, redistributing the load to less utilized border checkpoints, and developing the Northern Sea Route. These conclusions were reached by participants in the ‘Eastern Polygon Container Logistics: Challenges and New Opportunities’ session held as part of the Eastern Economic Forum.

 

 

KEY CONCLUSIONS

 

The Far East has become the most in-demand logistics route in recent years

“Whereas 10 years ago, the European Union, or the western direction, accounted for 47% of trade, and Asia only 29%, at present, Asia comprises 66%, while the European Union represents a mere 11%,” Vladimir Ivin, Deputy Head, Federal Customs Service of the Russian Federation.

“Key trends indicate a growing demand for imports annually, with the Far East continuing to be the most sought-after route for container transport. Our forecast is an overall market growth of 9–10% in 2024, despite infrastructure limitations,” Sergey Avseykov, Executive Director, Eurasian Union of Participants of Rail Freight Transportation.

“The Eastern Polygon was initially developed for the export of new products and industrial goods produced in Siberia and the Far East. However, since 2022, this concept has changed. The regions of Siberia and the Far East, which create their own products, are now unable to export them. This is because the Eastern Polygon is now dominated by goods from the Vologda and Arkhangelsk regions, such as paper, cardboard, and plywood, which were previously exported to Europe,” Igor Levitin, Adviser to the President of the Russian Federation; Special Representative of the President of the Russian Federation for International Cooperation in the Field of Transport.

 

New legislative and technological solutions will ensure increased transport volumes

“There is a positive growth trend. We expect to maintain this pace of growth. Currently, container transport has increased by about 8% compared to the previous year. Together with the market, we are working on how to handle this volume. Of course, the first issue to address is the implementation of new technologies,” Dmitry Murev, Deputy General Director, Russian Railways Head of the Center for Branded Transport Services.

“There are several solutions. As you know, there is a presidential directive to create a national digital transport and logistics platform. […] We are not looking to create additional layers of bureaucracy, but rather to implement several key services. The first of these is a single window for document processing between businesses and the government. […] The second service is electronic document management,” Dmitry Bakanov, Deputy Minister of Transport of the Russian Federation.

 

PROBLEMS

 

Shortage of rolling stock and insufficient infrastructure capacity

“The challenge, in my view, lies in the significant congestion of the Vladivostok–Nakhodka hub. Here, we are certainly feeling the limits of transport capacity. In this context, it may be worthwhile to consider alternative border checkpoints,” Vladimir Ivin, Deputy Head, Federal Customs Service of the Russian Federation.

“Regarding the transport of containers in open-top wagons, initially, this method was seen as a buffer, a way to balance the disparity between exports and imports. This shift occurred because the entire container flow from Baltic ports has moved to the commercial ports of the Far East and Primorye. Today, after two years, it is clear that this situation will persist indefinitely. The transport of containers in open-top wagons can now be considered an independent operation,” Khasyan Zyabirov, General Director, UgolTrans.

 

SOLUTIONS

 

Increasing transport volumes through alternative solutions

“One of the solutions is extending the length of container trains. This has been widely discussed. Container trains of 120–140 units are already a reality. In the train schedules for this year, we have accounted for this solution, and next year, we plan to increase these numbers,” Dmitry Murev, Deputy General Director, Russian Railways Head of the Center for Branded Transport Services.

“As a colleague just mentioned, increasing the length of trains is necessary. Without question, tactical and operational decisions must be made. Since we are unable to build additional infrastructure, we are likely at the limit in terms of physical reconstruction. Otherwise, we may have to halt the railway entirely,” Gadzhimagomed Guseynov, First Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

 

Development of the Northern Sea Route

“We have an upcoming session on the Northern Sea Route, where we see a significant role for the NSR in the future as an additional transport infrastructure, not as an alternative, but as a complement,” Gadzhimagomed Guseynov, First Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic.

“It is essential to develop the Northern Sea Route. It parallels the Eastern Polygon, and the sooner we launch the Northern Sea Route, the better. Essentially, we have two remaining safe corridors: China and the Northern Sea Route, the NorthSouth route,” Igor Levitin, Adviser to the President of the Russian Federation; Special Representative of the President of the Russian Federation for International Cooperation in the Field of Transport.

 

*This is a translation of material that was originally generated in Russian using artificial intelligence.

 

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en

Read more