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The currency jump has led to logistics costs in the Far Eastern Federal District

Course growth and coronavirus have affected international traffic in the Far East

The currency leap that occurred in early March has already influenced foreign economic activity in Russia, affecting various areas. Companies that specialize in internal logistics in the Far East still adhere to old prices, however, changes have already occurred in international transport.

The currency jump has led to logistics costs in the Far Eastern Federal District
Photo: pixabay.com

COURSE AND FUEL

The past couple of decades, the logistics market of the Far East is developing at an accelerated pace. The involvement of the macroregion in the economic life of the country increased against the backdrop of the development of trade relations between Russia, China, Japan and South Korea. So, in 2019, the ports of the Far Eastern Federal District increased cargo transshipment to 215 million tons. The macroregion shows the most impressive growth rates in the country - 6,4%, despite the fact that in Russia as a whole this figure is 2,4%.

According to the FESCO Transport Group, the container market of Russia in January-February 2020 grew by 8% compared to the same period last year - up to 837 thousand TEU. Export grew by 16% (up to 283 thousand TEU), transit - by 30% (up to 79 thousand TEU), domestic transportation - by 12% (up to 131 thousand TEU), but import decreased by 1% - up to 344 thousand TEU.

However, a collapse in crude oil prices has a direct impact on fuel prices. Therefore, due to the strengthening of foreign currencies against this background, changes have occurred in the logistics market. These factors have made adjustments to the work of the industry throughout Russia.

Many domestic manufacturers have already noted rising prices for logistics services in many regions. In particular, the head of the Russian Grain Union said that in the first place, sea and river ports reacted to the growth of currencies.

“Due to currency fluctuations, some sea and river ports in the European part of Russia have already raised the rates for transshipment of goods. This directly affects the cost of various goods, including raw materials. Logistic costs directly affect the cost of goods, both in the domestic and foreign markets, ”said Mikhail Privezentsev, head of the National Union of Grain Producers.

In the Far East, they say that this is not the case in the macroregion. So, in the Vladivostok Commercial Sea Port, through which local and international freight traffic is carried out, we were assured that currency fluctuations are not reflected in the price lists of the enterprise.

At the same time, logistics workers say that all settlements in ports are underway.

in dollars, so there were no changes. However, they were not felt everywhere. Family Director General Dmitry Volkov said that fuel prices have not yet risen and that trucks are carrying goods from China at the same rates as a month ago.

“Of course, when the exchange rate rises, then prices rise. Specifically, our transportation cost has not changed, because the fuel has not significantly risen in price, ”said the entrepreneur.

According to Irina Kondratenko, an employee of the Russian East company specializing in shipping between the ports of the Primorsky Territory and the Sakhalin Region, prices for the services of most logistics companies have not yet changed.

“The cost of transportation within the macro-region has not yet changed. Logistics pricing between Russian ports primarily depends on the cost of fuel. We are not tied to currency rates, ”said an employee of the company.


INTERNATIONAL DIRECTION

Currency fluctuations more affect the activities of companies specializing in international transport.

The business lines logistics company said that most market participants do not change prices, since the situation in the world is now unstable, and what will happen to the currency further is unknown.

“Now the situation is already complicated, the coronavirus is spreading, because of which cargo turnover with China has decreased. Borders are closed with a number of CIS countries - Belarus, Kazakhstan, Kyrgyzstan, ”the company employee noted.

However, shipments targeting China, the first to hit the coronavirus, suffer more.

“Cargo turnover has declined markedly due to the spread of coronavirus,” said Viktor Merzlov, head of DVTG-TEO. - Recently, everything has changed significantly. Now the ports of China are empty, there is no cargo and there is simply nothing to transport. Chinese production because of the epidemic is working at half strength. This is the main thing that today has affected the logistics industry of the Far East. But prices for cargo transportation within the region have not changed yet. ”

According to the general director of the Family company Dmitry Volkov, now there is no excessive demand for goods from China. Trucks carry mainly perishable goods - vegetables and fruits, and retailers often buy canned food, cereals and flour.

COURSE TO CHINA

According to FESCO estimates, in February 2020, the container market grew by 5% compared to February 2019 to 417 thousand TEU, but the growth rate slowed down due to lower imports and lower transit growth rates than in January 2020.
“As for transit traffic, the growth rate slowed down due to a decrease in the volume of traffic along the route China - Europe - China. At the same time, according to the results of February, export transportation increased in all directions, including in Chinese, ”the FESCO press service noted.
The company also said that, primarily, China focused on Russian container shipping. This applies to imports, exports and transit. Almost 50% of all container imports come from China, so any events in this country affect the entire supply chain.

“Since most enterprises in China did not work in January and February, naturally this factor affected the freight operations from China and China, as well as the volume of transportation of companies. We expect that in the second half of March, most enterprises in China will resume their work, about a month will be needed to normalize processes along the entire supply chain, ”FESCO said.

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