Due to European Union economic sanctions on Russia, freight volumes via several of its main ports have plummeted.
According to Kiel Institute for the World Economy scholar Vincent Stamer, Russia’s main economic gateway with Europe, St. Petersburg’s container traffic dropped 85% this year.
In an interview, Vincent Stamer remarked, “Russia’s formerly busiest port is barely receiving containers.”
The latest trade indicator from the German economic think tank shows that Russia imported 24% fewer items per month than in 2021, creating a USD 4.5 billion monthly import imbalance.
The collapse resembles the trade decline many nations suffered in April 2020 due to the COVID-19 pandemic.
Vincent Stamer said losing 25% of a nation’s imports is significant, imagine monthly import drops like that.
Towards China
As a result, Russia’s top trading partner is now China, not the European Union. Still, Chinese exports to Russia cannot compensate for the European Union drop.
European Union exports to Russia dropped 43% this summer. However, according to Kiel, China shipped 23% more to Russia this summer than in 2021.
According to Kiel’s research, two of Russia’s main ports, Novorossiysk on the Black Sea and Vladivostok in the east, have seen inbound freight drops since Russia invaded Ukraine. However, Vladivostok has lately returned to normal.
Hapag-Lloyd, Maersk, and MSC’s voluntary suspension of Russian shipping services initially hampered China’s ability to send additional commodities to Russia, Stamer said.
Vincent Stamer continued, “It’s difficult to determine how significant that effect is now. China will export more to Russia despite maritime network issues.”
Siberia Trains
Russia is turning to trains for trade because seaborne cargo is limited.
The latest weekly report from New Silk Road Intermodal, a freight operator connecting China and Europe, states that train lines to Russia “are still hot, but compared with last week, the tension has eased.”
The business reported on LinkedIn that ship and rail travel between China and Russia takes 40 days, and Vladivostok congestion “has not improved significantly.”
Photo credit: Kiel Institute Twitter