International Freight Is Russia The Next Hotspot

ld is changing at an unprecedented pace and that10 days, whereas in Rotterdam, it would be less
means freight transport companies need tothan an hour.
constantly update their knowledge and networks.Another problem is the congestion of the logistics
At present, Russia is undergoing significant change,networks and warehousing around the major
which will impact on freight services in the future.trading centres of Prague, Warsaw, Budapest,
Of course, Russia is not immune to the globalBucharest, Sofia, Poznan, Kiev, Moscow and St
financial crisis. Since peaking in May 2008, Russia'sPetersburg.
stocks have lost 60 to road freight over the lastOther cities in Russia and Eastern Europe need to
ten years. However, Poland, Latvia and Bulgariadevelop as distribution and freight forwarding hubs
have seen an increase in rail freight volumes overin the next five years. This will create new
the same period and it is expected that rail freighttransport networks for international freight, for
will continue to grow in importance in Russia.which there is particular demand from the
In Russia, the private rail freight companyautomotive, electronics and machinery sectors.
Globaltrans raised $449million of investment whenThe Russian Government has now implemented a
it offered shares earlier this year. The success ofprogramme of modernizing the transport
the IPO showed that investors recognise theinfrastructure, as well as simplifying customs
potential of the Russian rail freight industry.controls. This will have a big impact on freight
There have been calls for the privatisation of theservices and allow the export markets to
Russian railways, as a way of bringing aboutcontinue to grow.
urgently needed rail reform and making the mostThe freight forwarding industry in Russia is still
of this important means of freight forwarding.very fragmented and undeveloped. However, with
Meanwhile, there needs to be significantthe rapidly growing economy, an ever expanding
infrastructure investment in port terminals andmanufacturing industry, increased international
interior transport networks, if it is to going to fullytrade and foreign investment in infrastructure, the
exploit the potential of the container shippingfreight forwarding sector will see transformation in
sector.the coming years.
At present, only 1% of freight in Russia isAlready, the small number of large shipping
containerised. Shipping companies say the industrycompanies is steadily increasing, especially in
could double in the next five years, if theRussia, Poland, Hungary and the Czech Republic.
transport infrastructure expands to cope withThe EU accession of the region is a further boost
increasing volumes.to the growth of export and freight forwarding in
Currently, two companies control the twothe region. Until recently, the region has been
container terminals that deal with the majority ofhampered by lack of economic stability and the
Russian sea freight transport. These are the Firstpoor transport infrastructure.
Container Terminal at St Petersburg and theHowever, with many Eastern European countries
Vostochny International Container Terminal in thenow members of the EU and others in the
East. The lack of competition may partly accountpipeline, improved fiscal management and
for the high costs and poor service which areincreased investment is now going some way to
current features of internal freight in Russia.tackle these challenges.
Storage costs in St Petersburg can be aRussia and Eastern Europe are poised to become
staggering twelve times higher than in Westernone of the next hotspots in international freight.
Europe. What's more, containers can sit in port for