April 5, 2019
On April 5, the 5th anniversary conference BREAKBULK RUSSIA came to a close. For the last 5 years this forum has remained the reputable platform to discuss the pressing issues of extra heavy and oversize logistics. Every year the key players of the breakbulk market meet in the Russia’s largest port city.
Over 160 delegates from Russia, Belarus, Kazakhstan, Estonia, Latvia, Germany and Slovakia registered to the conference in 2019. Russia was represented by participants from St. Petersburg, Moscow, Rostov-on-Don, Krasnodar, Novorossiysk, Chelyabinsk, Krasnoyarsk, Vladivostok, Murmansk, Bryansk, Belgorod Oblast, Samara, Tver, Tolyatti, Kaliningrad, etc.
BREAKBULK RUSSIA 2019 was also attended by major manufacturing companies: China Petroleum Engineering and Construction Corporation, HDEnergo, SIEMENS Transformers, Sandvik Mining and Rock Technology, Atomenergoprom, GAZPROM NEFT, GAZPROMNEFT-SNABZHENIE, John Deere Rus, Izhorskiye Zavody, SILOVYE MASHINY and others.
Topics which were addressed at the conference included legal regulation of outsized shipments and special permitting, status of the Black Sea and Baltic RO-RO transportation markets, and role of railroad freight in project logistics.
In particular, oversize transport market overview was made by Lyudmila Simonova, M.A. Research Managing Partner. Lyudmila stated that due to sanctions and restricted access to the international capitals, investments and technologies Russia is coming up 2% short in the oversize and overweight cargo market. L. Simonova also voiced some forecasts for the global and domestic forwarding and OOG markets.
“The International Monetary Fund and the World Bank mention that the positive trend of the global economy has broken, says L. Simonova. – This is induced by a number of factors, trade warfare and sanctions being on the top list. They multiply the risks for the market and can bring slowdown for the USA and China, especially in 2019-2020.”
Lyudmila also mentioned such contributors as infringement of the WTO regulations and impaired technological diffusion which, as she believes, is leading the way to the investment cycle disruption.
Overall, 2018 was rather positive for the Russian transport market. “Although all the carriers and market players admit that they are growing by means of laying hands on someone else’s cargoes, emphasized L. Simonova, – in fact, the live freight base is growing very little if growing at all: transportations in the range of 1%, cargo turnover – plus 4% owing to extended shipping distance and haulage to the Far East. The same situation can be seen in the ports: after 9% up, the turnover level of 3-4% is indeed a considerable reduction. Speaking of contributors to the growth, these are mainly Northern routes and coastal traffic.”
“What is really frustrating for us is the broken cycle of raws price increase. Certainly, we do not expect the same recession as in 2015-2016. Still, approximately 7% will be lost. It is the energy projects which can boost up the freight and logistics market.”
L. Simonova also gave an outlook for the transport and forwarding services in the Russian Federation. “The goods turnover will rise in the range of 2.6%, freight transportation – 1% maximum. – We believe that 2019-2020 will be ineffectual. Yet the forecasts are a little brighter up to 2025: there will be more cargoes. All we need to do is to win through 2019.”
“Next to other market segments, the oversize niche looks pretty well. The monetary growth here amounted to 5.6%, with about 2% of its share ($1 billion) in the transport service industry, highlighted L. Simonova. – The growth pace is rather high: with 6.4% in 2017, a minor decrease was recorded in 2018. As for 2019, we are witnessing a real drop in growth.”
According to Lyudmila, the main growth lagging factors are derived from reduced investments in basic stock – from 4.4% to 2.9% (as estimated by the Ministry of Economic Development and Trade), and from 8.6% to 0.3% in case of extractive industry (as of 2018). “The market has somewhat braked with physical investment import having dropped from 20.3% to 3.2%.”
Forecast for 2019 bears in mind slowdown in investments and oversized freight market. “Motor trucking covers approximately 90% of tonnage and 65% of the oversized and overweight cargo volume. Market share in the total trucking value is about 4.7%”, reported L. Simonova.
“The year of 2019 is unfavorable for the heavy lift and oversize market. Growth rates in the motor transport market are less than average. Outlook for 2020 and on: we believe that the pacing will be ahead of other trucking segments.”
L. Simonova summarized on the international oversized freight market in 2018. Among the main outcomes:
“As forecasted for 2019, the upward trend of export deliveries will still be there followed by a slightly negative import behavior. Compared to other developing countries, we are not bad at all, believes L. Simonova. – Outlook for the bulky freight market in 2020-2022 is 2.5% higher than the average figure registered in the transportation market. The growth is brought about by commencing national projects and major investment projects overseas which can be a real booster.
Another essential speech was made by Boris Kaportsev, Expert of AO Atomenergoprom. As he put it, expanding presence of the Russian peaceful atom on the international scene anticipates increase in load on logistic channels inside the country, as well as on port facilities, terminals, rolling stock and fleet in 2020-2025. The selected delivery channels will be importantly distinguished by throughput capacity and ability to address several nuclear energy projects by Rosatom corporation at a time.
B. Kaportsev elaborated on aspects of transportation support for the international nuclear power plants construction projects – Akkuyu (Turkey), El-Dabaa (Egypt), Kudankulam (India), Paks-2 (Hungary), Rooppur (Bangladesh), Tianwan-2 (China).
“The material assets bound for construction sites are dispatched from goods-producing regions – the clusters of North-Western, Central, Southern, Urals as well as Siberian districts, said B. Kaportsev. – Overall tonnage of Russia’s inland transportation for the period of 2020-2027 is expected to reach 1,700 thousand tons cumulative.”
Rosatom is now in search of logistic channels. He also highlighted that the options to deliver cargoes to the NPP locations are currently under consideration. “The basic criteria of this comparison study are area capacity, batch consolidation option, lifting potential of handling equipment, cost and batch storage/accumulation conditions, availability of regular trade line services, containerization capabilities as well as time and delivery speed savings, said B. Kaportsev.
He stated that the state corporation is currently facing some difficulties delivering the cargoes to ports. “It’s a glitch, said B. Kaportsev. – Therefore, development of some long-term available logistic channel, selection of a port and selection of a dispatching region are big ticket items for us. This comprises utilization of existing capacities, availability of terminals, de-bottlenecking of port approach channels. Massive shipments in block trains are not what we do. Predominantly these are oversize loads and these kinds of loads almost always bide their time in the side tracks.” B. Kaportsev expressed hope that AO RZD would assist in resolving this issue.
Aleksandr Bulygin, TMBCL Sales Director, highlighted the Ro-Ro logistics trends. Specifically, he mentioned one fact: the number of conventional Ro-Ro vessels is decreasing. “The market quantity of such vessels has reduced by 34% for the last four years only, he said. – In the long view, the competition of the Ro-Ro market segments anticipates dominance of car-transport vessels.”
A. Bulygin dwelled on the roll trailers and ro-flo vessels market. “If the Baltic region, St. Petersburg and the Baltic ports turn out to be the most viable in terms of roll trailers (Wallenius, Hoegh and five more companies in St. Petersburg), the Azov and Black Sea basin to date can only provide single solutions from Wallenius and Hoegh. The local operators have had few if any roll trailers until now.”
Yet according to A. Bulygin the most important fact which must be taken into consideration in the context of Ro-Ro logistics is significant lifting constraints in the Black Sea ports which are mainly attributed to port infrastructure. “The fleet which calls at these ports can offer up to 80 tons of lifting capacity. Actual lifting capacity in the ports is limited to 50 tons.”
“Strange as it may seem, there is even a ro-flo carrier in Russia. This is Oboronlogistika”, he said. As per A. Bulygin, Oboronlogistika operates four ro-flo vessels sailing under the RF flag.
These were only the few of the themes discussed at the conference. We remain available to provide further details on request.
Butorin Marat Viktorovich,
association of oversized cargo carriers president.
National association of road freight transport «GRUZAVTOTRANS» report
Transportation of oversized and heavy cargoes: problems of legal regulation
Matyagin Vladimir, president
Association of oversized cargo carriers report
Problems with obtaining special permits
Butorin Marat, president
Where is the market of project cargo transportation moving? Time of experiments ends, how to reduce the risks of customers and freight forwarders?
Volkov Pavel, commercial director
Oversized cargo transportation market: trends and prospects
Simonova Lyudmila, managing partner
Transport support of international NPP construction projects in the horizon up to 2025
Kaportsev Boris, expert
Ro-Ro transportation in project logistics
Bulygin Alexander, sales director Glogos Project report Transportation of oversized cargo by water transport Grinevich Konstantin, director
Survey services on project cargo. Interaction with participants of the transport process
Balabanov Sergey, manager
RRW – Central directorate for terminal and warehouse complex management report
Creation of a network of terminal and logistics centers on the entire railway network of the country
Shepelyaev Artem, deputy head of commercial issues direction Shepelyaev Artem, deputy head of commercial issues direction
100 TONN MONTAGE report
The use of gantry systems in equipment installation
Timofeev Evgeniy, production director
GEFCO Russia report
Use of international experience in project and oversized transportation in Russia
Shestakov Mikhail, business development manager
RTL in CIS: carriage of project cargoes, integrated solutions
Viktor Marchenko, business development in RF and CIS director