The Old Routes No Longer Work

Western sanctions have radically changed the domestic cargo transportation market. The departure of European players disrupted logistics flows to Russia. In such conditions, new supply lines began to develop.

In the spring, Western countries banned the import of a number of categories of goods into the Russian Federation. Restrictions have cut off Russia from supplies from Europe. The sanctions affected transportation by sea, by air and by land. Large logistics companies, such as Maersk, have left the domestic market. Other market participants have stopped providing some services. In response, Russia has banned the entry of large trucks from "unfriendly" countries since October 1.

According to TelsGlobal, an international logistics service provider, cargo turnover between Russia and the European Union decreased by more than a third in the first half of 2022 alone.

"Of course, cargo traffic from Europe has decreased significantly. At the moment, only those goods that are not subject to sanctions and counter-sanctions are imported. But even with these cargoes, a problem arises: a huge number of European suppliers and carriers refuse to sell and ship goods directly to the Russian Federation, fearing sanctions. It also imposes its own "flavor" of the embargo on air/sea transportation to the Russian Federation, introduced by the EU and the USA back in February," states Evgeny Apasov, General Director of SLSAgency, ACEX in St. Petersburg.

However, in the conditions of overlapping flows from Europe, other directions of cargo transportation have become promising. First of all, we are talking about the international transport corridor "North – South", as the closest to the European part of our country.

According to Eugene Apasov, the southern direction has become an alternative route for the delivery of goods from the European Union. Now the intermediary trade activity with "unfriendly" countries takes place through the Central Asian region, the UAE and Turkey.

"The nomenclature of goods is diverse, overwhelmingly not falling under various types of restrictions. Thus, European exports turn into Turkish and Emirati exports after resale, if the supplier is ready to sell the goods," says a market participant.

More about the situation in our new issue of ACEX Press.