From Theory to Action

Panel session of ACEX "Logistics under sanctions. From theory to action: routes, Opportunities, solutions" made a splash at TransRussia – the largest exhibition of transport and logistics services, warehouse equipment and technologies in Russia.

The moderator of the session is Miroslav Zolotarev, CEO of ACEX Group.

The main question – how to rebuild logistics under the current sanctions – will be discussed by the following participants:

1. Georgy Vlastopulo, CEO of Optimalog: "New supply chains: Import options, opportunities and risks";
2. Dmitry Pankratov, founder of Bahrain EasyHome: "Hidden opportunities of the Kingdom of Bahrain";
3. Ivan Savushkin, Director of Regular Logistics Development: "New logistics: Support and development of foreign economic activity in new realities";
4. Lyudmila Simonova, Managing Partner of the M.A. Research Agency, member of the Board of the Guild of Logistics Operators: "Changes in international cargo flows under sanctions";
5. Dmitry Nikulin, General Director of TA "Supercharter": "Air cargo delivery under international restrictions";
6. Andrey Grechkin, CEO of Dalreftrans: "Changes in the logistics of refrigerated cargo";
7. Alexander Sharov, General Director of Neftekhimtrans LLC, RusIranExpo Group: "Iranian Transit. Railway crossings and ferries. Transportation of chemicals, petroleum products, coal, lumber, general cargo, etc.";
8. Dmitry Kutateladze, Marketing Director of Ruscon: "Development of container transportation routes".

THE MAIN THESES OF THE SESSION "LOGISTICS UNDER SANCTIONS 2.0"

Lyudmila Simonova, Managing Partner of the M.A. Research Agency, member of the Board of the Guild of Logistics Operators, cited statistics on the decline in international cargo flows of the Russian Federation (in tons). In 2022, the decrease was 4.2%, exports decreased by 2.8%, and imports – by 13.8%. At the moment, sea transportation prevails in terms of exports, rail transportation prevails in terms of imports.

There is a shift in orientation to the Far East in the maritime cargo transportation market. Cargo transshipment at the port in 2022 amounted to 228 million tons, which increased by 1.5% compared to the previous year. Container handling increased by 8% and amounted to 2,290 thousand TEU. According to the expert, the increase could have been higher if the port's capabilities allowed.

"Russian exporters managed to quickly adjust to the new conditions. Export cargo traffic decreased minimally, and oil supplies increased by 12%. There has been a strong increase in interest towards India. In general, it is obvious that there has been a turn towards Southeast Asia, Latin America, the Middle East and Africa," Lyudmila Simonova comments.

The situation of import cargo traffic is much more complicated. It fell by 13.8%. The drop in traffic to unfriendly countries was 40%, and the increase in friendly countries was only 23%.

Dmitry Nikulin, CEO of Supercharter, spoke about the state of affairs in the air transportation market, where in 2019 there was competition between cargo carriers for cargo with passenger airlines. Airlines were getting rid of the least efficient cargo planes. However, during the pandemic, the cancellation of most passenger flights caused an increase in cargo aircraft. The industry began to recover from pandemic restrictions in 2022, but soon Russian airlines were forced to stop working on most international flights. Many foreign airlines have also stopped flights to Russia. By the end of 2022, air cargo transportation in the world decreased by 8%. Air cargo transportation in Russia decreased by 60%.

"Today we can observe the stabilization of the air transportation market in new directions. The number of flights is growing with countries with which direct air communication has been preserved. Many countries have become new aviation hubs for cargo to Russia," the speaker comments.

Andrey Grechkin, General Director of Dalreftrans, said that the share of refrigerated container shipments in the total volume of cargo transportation by rail in the Russian Federation remains at less than 0.1%. In this regard, the company offers:

1. To take transportation in refrigerated containers beyond the scope of work orders
2. Introduce the concept of a refrigerated container train, which includes 50 +% of cargo in refrigerated containers, and the rest can be filled with universal containers with other food products, products of agricultural enterprises and empty refrigerated containers to adjust the carrying capacity.

Georgy Vlastopulo, CEO of Optimalog, estimated the drop in imports of goods from unfriendly countries (who had imposed sanctions against Russia) at $90 billion. Import forecasts for 2023: the general complication of cargo delivery to Russia from unfriendly countries, the rise in the cost of logistics, the widespread increase in risks.

"In the near future, we will see a decrease in the volume of indirect and parallel imports, as well as the loss of friendly countries from the organization of transit commodity flows. Already today we are witnessing the restructuring of all supply chains to the East and economic integration with the main Eastern partners," said Georgy Vlastopulo.

Ivan Savushkin, Director of Regular Logistics Development at Nawinia Russia, shared ways to deliver goods from the EU to Russia.

1. Direct import through third countries. Import and customs clearance of goods in the “proxy” country, after which the cargo is sent to the Russian Federation.
2. Direct re-export. The goods physically go to the country of the first buyer (a friendly country) and are placed in a transit customs warehouse. After that, the goods are sold to the final buyer in Russia and shipped in re-export mode without paying customs duties and VAT.
3. Indirect re-export. The goods from the European supplier are delivered to the Russian Federation by the "usual" route, but the purchase is made through a "proxy" company.
4. False transit. The goods leave the EU, following the transit through Russia to the buyer's address. Getting to the customs warehouse on the territory of the Russian Federation - the cargo is resold.

"It should be borne in mind that all these logistics schemes are not suitable for sanctioned goods. But our company knows that there are no unsolvable tasks in logistics," the speaker concluded.

Dmitry Kutateladze, Marketing Director of Ruscon, presented the restructuring of sea routes from Novorossiysk via Istanbul to other recipient countries (more often India, China) and vice versa. In this case, Novorossiysk is not the final point of delivery, and sea transportation plays the role of a logistics arm. The final delivery to Moscow is carried out with the help of a regular train service.

In 2022, the import volume of cargo fell significantly, but in 2023, the dynamics of shipments of loaded containers exceeded the pace of 2021. Thus, we can talk about the revival of this direction.

The speaker also mentioned domestic logistics. "Today there is a development of routes through the Volgograd region. Routes from north to south and from east to west intersect in this region. Our company considers this direction to be extremely promising. Now we are engaged in the construction of a cargo terminal," Dmitry said.

Alexander Sharov, General Director of Neftekhimtrans, RusIranExpo Group, told about another popular direction. According to Alexander, Iran is one of Russia's main partners today. It is much more profitable to carry out transportation through this country than through Turkey.

Today, various types of goods (coal, timber, agricultural products, etc.) are transported through Iran to Africa, Brazil and South Asia.

Indeed, the Middle East and North Africa complement Russia's capabilities and interests, their market accounts for 4.5% of the total GDP in the world. Dmitry Pankratov, the founder of Bahrain EasyHome, suggests using the oil refining state of Bahrain as an entry point to these countries.

Bahrain is connected to Saudi Arabia by a highway, and in the near future it is planned to build a railway line that will connect the kingdom with the entire international network. It is also planned to build a bridge that will connect Bahrain with Qatar. Thus, we will get the shortest route connecting the largest gas exporter – Qatar and the state with the largest economy in the region – Saudi Arabia.