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Advantages of the Russian Cargo Ports for International Trade

russian sea port

Since 2008, CREDO TRANS has been an active marine freight transport operator. We deliver the most effective freight port logistics for companies large and small, based on our established track record of high-profile shipments around the world. We take pride in establishing flexible and profitable marine freight shipping partnerships with major agents including MAERSK, Evergreen, CMA, APL, COSCO, OOCL, MSC, and China Shipping.

How Many Cargo Ports are There in Russia?

With a population of over 150 mln people, Russia’s economy is heavily reliant on international trade.

The list of Russian ports includes 67 sites capable of handling approx. 1003.6 mln tons of cargo per year. The world-class ports are located on three oceans, 12 seas, and the Caspian Sea, and are categorized by five sea basins: the Northern (Arctic) basin, the Pacific basin, the Baltic Sea basin, the Black Sea basin, and the Caspian Sea basin. Most of the Russian seaports play a vital role in maritime exports and imports and the nation’s continued standing as a major transportation and logistics actor.  All Russian ports have seen tremendous development in the last ten years or more, and a wide variety of cargo currently passes through them. This is mostly due to the sharp focus the Russian government brought into rebuilding the infrastructure of the seaports across the country. The Northern (Arctic) basin is currently a basin under the most development due to the particular attention given to the northern seaway as the shortest route between Europe and Asia.

Most of Russia’s major ports primarily operate to serve the nation’s extensive international trade — the import and export of metals, hydrocarbons, grain, fertilizers. The Far East and the Arctic ports mostly support the fishing sector; ports in the Pacific, Arctic, and Caspian basins serve the offshore industries. Ports like Saint Petersburg and Sochi are popular harbors for cruise ships.

Top-5 Largest Russian Ports

In 2020, Novorossiysk, a Russian seaport in the Black Sea basin, transferred approx. 142 mln metric tons of cargo, making it the country’s leading port by freight turnover. The Port of Ust-Luga in the Baltic Sea basin, which handled about 103 mln metric tons of annual freight, is placed second. The eastern port of Russia, Vostochny, became the third most important port in terms of freight turnover.

Novorossiysk Port is Russia’s largest and Europe’s fifth-largest port in terms of freight turnover. About 20% of the total volume of imports and exports transferred by Russia’s seaports passes through Novorossiysk Port. The port, built on the Black Sea’s NE coast in the ice-free Novorossiysk, or Tsemes, Bay, is Russia’s primary grain export center and its largest port overall. The port of Novorossiysk receives over 4,500 vessels each year. The port has a total of 43 berths built on 959 thousand m² of land. The depths range from 4.5 to 24 m. To keep freight contained, 180 thousand m² of open-air storage space has been matched with 62.2 thousand m² of indoor facilities and warehousing. The port has established transit routes with Europe, Middle East, Asia, North Africa, and even South America.

Ust-Luga Port is situated on Russia’s NW coast, about 130 km SW of Saint Petersburg, on both banks of the Luga River. The new deepwater port is 7 kilometers east of the river berths and was built mostly on reclaimed land. Six terminals form a new multipurpose port, with 16.0 m water depth at the newly constructed berths. Spread on approx 900 ha, Ust-Luga Port is able to handle Ro-Ro, dry bulk cargo, container vessels, LPG carriers, and tankers. The total capacity is estimated to be up to 120,000,000 tons of varied freight per year when completed.

Vostochny Port is an intermodal container port and a warm-water harbor located in the city of Vrangel of the Primorsky Krai, at the easternmost end of the Trans-Siberian Railroad. It is a year-round deepwater port on Nakhodka Bay, which is part of the Sea of Japan. Vostochny is the nation’s largest port in the Far East, capable of receiving ultra-large shipping vessels.  The port houses JSC Vostochny Port, the largest stevedoring company in Russia. The Special Sea Oil Terminal, located in Kozmino Bay, is another division of the Vostochny Port.

The Port of St. Petersburg, the nation’s largest NW port, can handle 5 mln TEU yearly. The Bolshoi (Big) Port of St. Petersburg, as the city’s trading hub is known, lives true to its moniker. In 2020, the Big Port handled 59.9 mln tons of cargo. The port, which is nestled in the Neva Bay, provides a vital link to Europe, Scandinavia, and beyond. It has excellent logistical support, including specialized rail terminals, easy access to highways, and Pulkovo airport. The Port of St. Petersburg has 200 berths that can accommodate tanker and container transports. The port’s entire water surface area is 29.9 thousand m² and is 25 m deep at its deepest anchorages.

The Port of Vladivostok is one of the largest on Russia’s Pacific coast. Modern cargo handling equipment, oil and gas storage facilities,  and new direct container trains are available at the Port of Vladivostok. There are 15 berths totaling 4.1 km in length and a consolidated storage space of 353 square km. In 2015, the Port of Vladivostok was granted a status of a Free Port for 70 years to come. Significant tax breaks and convenient customs and inspection procedures are just a few of the benefits available currently at the Vladivostok Port. The port is easily accessible from Japan, China, Korea making it a great gateway for Asian trade.

The information above is certainly just a snapshot of Russia’s seaports. Considering Russia’s annual volume of exports and imports, it is obvious that these sea points are vital for the country’s continued development.

Overview of the Legislative Framework Regulating the Seaports of Russia

The Law on Seaports, enacted in 2007, governs the structure, procedures, and operating norms of all Russian seaports.

Russia is a signatory to several international treaties and has an influence on legal disputes, if any, related to the shipping industry. Russian courts are regulated by the national legislation that is applied uniformly throughout the country. The Russian Merchant Shipping Code of 1999 lays forth the major regulations for the maritime industry. However, if any foreign corporation is involved in a dispute or a court case, then the provisions of an international treaty will be followed. International agreements, on the other hand, will be void if their provisions conflict with the country’s supreme law, The Constitution of the Russian Federation. This decision took effect as soon as the revisions to the Constitution were ratified following the all-Russian referendum on amendments to the Constitution of 2020.

The shipping business in Russia is also regulated by customs law. The changes to the customs regulations were introduced in July 2010, when the new Customs Union Code superseded the Russian Customs Code.

Capacities of the Russian Ports

The main distinctive feature of Russian seaports—in comparison with other entities of transport infrastructure — is that most of the Russian ports meet advanced requirements and run at 70% of their capacity.

Below is a snapshot of the Russian seaports.

  • Total number of ports: 67 sites on the map of Russian seaports
  • Handling capacity: 840,3 mln tons (2019)
  • Average utilization rate: 70%
  • Transshipment contribution in domestic transport operations:
  • 100% of domestic grain exports
  •  80% of oil and petroleum products
  •  75% of coal.

According to Rosmorport, the handling capacity of Russia’s seaports is to be expanded by 50 mln tons in 2021 given the ongoing reconstruction of aging facilities and putting new terminals into operation. All of these innovation projects are part of the ambitious Comprehensive Plan for transport infrastructure modernization and expansion within Russia’s federal program for seaport development. 

Freight turnover

The Black and Baltic Sea basins reported the largest freight turnover in Russia as of 2019. The ports of the Caspian Sea basin had the lowest capacity, with over 7 mln metric tons in turnover. Cargo export operations at the Russian seaports equaled 491,6 mln tons (an increase of 6.7%), import operations amounted to 43,4 mln tons (a 5.7% decrease), transit operations totaled 47,6 mln tons (a decrease of 1.4%) and cabotage operations handled over 40,8 mln tons.  Export goods (mainly oil and petroleum products, coal) contributed to around 78% of the total cargo. Import operations account for just 8.3% of total turnover, the remaining amount of cargo accounts for transit cargo and cabotage.

Prices, Rates of Fees and Tariffs at the Russian Seaports

The Ministry of Transport of Russia approves, reviews, and amends the list of harbor dues fees, and tariffs in the seaports of the Russian Federation.

The freight rates as offered by the freight forwarders at the Russian seaports are influenced by several factors: the shipping distance, the total size of the goods, urgency, temperature needs, or shipment classification.

You must realize that rates are determined by supply and demand. Now it is easier than ever to comprehend the rates and the whole freight and logistics value chain due to the latest advancements in software and information technologies.

CREDO TRANS provides you here with negotiation tips that can help you lower shipping costs and improve your overall operational efficiency in Russia.

The Largest International Partners of the Russian Seaports

China (with its largest ports of Shanghai, Shenzhen, Guangzhou, Hong Kong, Ningbo-Zhoushan), the Netherlands (the port of Rotterdam), the United Kingdom (the port of Felixstowe), and Germany (the port of Hamburg) were Russia’s top four export partners in 2020. The same year, the total exports of Russia to China, through China’s major partnering ports, were worth almost 49 bln dollars.

China was not only the major destination of Russian exports but its top import partner. Until 2018, the total Russian imports from China outweighed the value of Russian exports to China. It was 2019, when Russia’s trade balance with China turned positive for the first time, totaling around 2.6 bln USD. Energy products and minerals, which are Russia’s main exports, were also the most heavily purchased goods by China.

Novorossiysk, Saint Petersburg, Vladivostok, and Kaliningrad are 4 major sea points where American products enter the Russian market. Approximately 75% of all food and agricultural products from the US enter Russia through the Big Port of Saint Petersburg.

Following a considerable reduction in trade between the EU-28 member states and Russia in 2015-2017, the numbers have shown favorable trends in recent years. The Russian exports to the EU-28 member states in 2020 were worth almost 136 bln USD, nearly 55 bln dollars more than the value of the European imports to Russia the same year. In 2020, Germany became a major buyer of the Russian commodities in the region, through its biggest port of Hamburg, and Russia’s second top import partner.

The Major Reasons for Working with the Sea Cargo Ports of Russia

The Russian government continues to invest in the country’s shipping industry. A variety of official initiatives exist, including those to build new ships, encourage shipowners to fly the Russian flag, and support the interests of Russian shipowners. By enacting Law No. 460-FZ, the government has also established a legal framework for this. As a result,  Article 4 of the Merchant Shipping Code stipulating the use of vessels flying the Russian National Flag for shipping purposes, was modified.

The government provides comprehensive support to the national maritime industry, and at the same time does everything possible to encourage direct foreign investments into the industry. The government has the right to award cabotage to vessels flying non-Russian flags. According to the Russian Federal Law of August 2018 On International Companies and International Funds, foreign companies are allowed to register in Russia through re-domiciliation to one of the Russian Federation’s special administrative districts (the Kaliningrad Oblast and the Primorsky Krai). The Law allows businesses to enter their vessels into the International Shipping Register of the Russian Federation and take advantage of tax breaks.

The Russian Seaport Infrastructure Development Strategy-2030 

As outlined by the Draft Seaport Infrastructure Development Strategy-2030, the growth and expansion of the Russian port capacities will be carried out through the implementation of various investment projects intended to reconstruct existing aging port infrastructure and launch new terminals. Rosmorport developed the Draft Strategy in line with the Russian Transport Ministry Order of 2010, in consultation with the Maritime Collegium.

The Strategy embraces:

  1. preferable locations for seaport infrastructure development in order to fulfill future demand for all cargo segments and passenger transport in all Russian seaports, and 
  2. recommendations for the implementation of the optimal port management model.

The Strategy has three planning horizons: short term (2015), middle term (2020), and long term (2030).

The following are the top port capacity development priorities till 2030: 

  • providing accelerated growth of critical terminals (coal and container terminals), 
  • ensuring the growth of harbors in the country’s major sea basins, and 
  • eliminating disparities in the development of seaport access railways and highways.

WRAPPING UP

CREDO TRANS partners with the busiest seaports and the major freight terminals in the world. We have exclusive access to a vast network of Russia’s busiest seaports and inland waterways. Our company carries out maritime transportation of freight on 27 routes, employing the infrastructure of all the terminals at the seaports of Saint Petersburg, Novorossiysk, Ust-Luga, Bronka through our representative offices.