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Syrian Tanker Attacked by Drone

April 24, 2021

The Syrian Oil Ministry announced a fire on one of the tankers off the coast of the Syrian city of Baniyas, probably caused by an attack from a drone, the Syrian state agency SANA reported with reference to the ministry. Earlier, the department announced the elimination of a fire that broke out on one of the tankers located off the coast of the city of Baniyas in the Syrian province of Tartus. The ministry said that the fire, in their opinion, arose after the tanker was attacked by a drone from the territorial waters of Lebanon,” the statement said.

Damascus suggests that an Israeli drone attacked the tanker off the coast of the Syrian city of Baniyas, on which the fire occurred, Lebanese TV channel “Al-Mayadeen” reported, citing sources. “Damascus assumes that the drone that attacked the Syrian oil tanker was Israeli,” the channel’s sources said. A tanker burning off the coast of Syria was attacked by two shells, according to the Iranian TV channel “Al-Alam”, citing informed sources. “Sources said that the Syrian oil tanker was attacked by two shells. The first hit the front of the tanker, slightly damaging it. The second shell fell on the deck and caused serious damage,” the channel writes. The TV channel noted that as a result of the incident, no human casualties had been recorded.

Source: RIA Novosti


Mikhail Kholosha,  Sergei Smirnov, Russia Gotov Dugerjav, Mongolia

In early 2020, transport and logistics experts from Russia, China, South Korea, Mongolia and Japan took part in a large-scale research project to analyze the reasons for the insufficient functioning of the international transport corridors (ITC) in the “Greater Tumen Region” and to develop proposals to overcome existing bottlenecks in regional logistics.

Initially, the concept of creating ITCs was based on the fact that a cross-border corridor is not just a dogmatically understood transport route serving freight flows of bilateral trade between neighboring NEA countries. The ITCs were supposed to become an effective mechanism for strengthening regional integration, optimizing land and sea routes, ensuring the smooth movement of transit cargo through the territory of the countries participating in the GTI program  Unfortunately, this concept has not yet been fully implemented.

ITCs are a set of separate transport routes today, in some places interconnected, but not united into a regional transport and logistics network. ITCs are rigidly tied to specific transport hubs (border crossing points – BCP, seaports) and serve fixed traffic flows. If difficulties arise at one ITC, its cargo flows cannot be painlessly redirected to another route.

The following factors generate organic flaws in the concept of individual ITCs:

  • NEA countries in contrast to, for example, the European Union, have great differences in geographic location, economic development, political system, demography, religion, language and writing. This cannot but affect their strategic priorities and approaches to regional transport and logistics integration. For example, the Republic of Korea and Japan are isolated from continental transport routes and are forced to look for complex options for the delivery of export-import cargo. China experiences significant imbalances between the economically developed South-East and the landlocked North-Eastern provinces included in the GTR. Mongolia as a land-locked country is completely dependent on its “great” neighbors for the transportation of foreign trade goods. The DPRK, which traditionally follows its own unique path, is not yet ready for even the minimum level of cooperation in the field of transport and logistics, although its contribution could be very significant. Russia is probably the only GTI member that, in principle, is not interested in expanding access to transport communications of its NEA neighbors for the delivery of its own cargo, but needs to attract a foreign cargo base and investments to integrate into the regional economy and modernize domestic infrastructure.
  • GTI participants develop their internal transport communications and logistics infrastructure based on their own priorities and goals. This does not always take into account the needs and specifics of neighboring states, especially the problems of the development of supranational (regional) economic structures. This is reflected in the disproportionate development of trans-border communications and service infrastructure on different sides of the common border, different procedures for customs, immigration and other types of control of goods and passengers, sometimes in the appearance of suspicion and misinterpretation of the actions of the other side, causing inadequate “response” measures. The latter circumstance, in particular, hinders the implementation of the Chinese ‘Belt & Road’ initiative.
  • Continuing the above issue, one cannot but mention the unresolved problem of lack of proper coordination between neighboring parties in terms of design, construction and modernization of transport infrastructure and BCPs, despite the fact that these facilities serve common freight and passenger flows and have a common technological cycle. As a result, adjacent BCPs sometimes have inconsistent operating modes and different throughput, interconnecting roads with different standards and technological operating procedures, and even occasional facts when a BCP is unilaterally built on one side of the border, but cannot function due to a lack of similar facility on the opposite side.
  •  NEA has only rudimentary institutions of regional integration, mainly in the field of economics and environmental protection. This is in line with the dominant regionalization model in East Asia, which puts the economy at the forefront, preferring not to touch sensitive areas of politics and security. As the experience of combating the COVID-19 pandemic shows, restoring the normal functioning of the regional economy without the consolidated efforts of the authorities of all regional countries will require much more time and resources.
  • Russia, as noted above, occupies a special position in regional transport and logistics sector. The volume of Russian cross-border traffic in the GTR is significantly less than that of neighboring economies. However, the dependence of the Far East of Russia on imports from the NEA countries is high, which was shown by negative experiences of the periodic closure of selected ITCs during a pandemic. What is more important in the context of this article, the Far Eastern territories of Russia have a huge, but currently grossly underutilized transit potential, which is attractive for shippers from the NEA economies.

Let’s add some other problems inhibiting the progress of ITCs:

The problem of statistics. The collection and analysis of statistical information on freight turnover and freight traffic have the following features and problems of accounting.

1. Differences in the accounting of goods by nomenclature. At the same time, there are national “statistical” and “linguistic” features;

2. The difference in measurement units;

3. Differences in accounting policies and the use of different sources of information.

The existing system of cross-border bilateral trade and transport organization is not favorable for transit transportation. There is controlled export and import flow in the transport management system, which cannot support transit, and as a result, the bilateral organization of transport management leads to increased tariffs and inhibits multilateral transit.

  • Insufficient development of BCP’s infrastructure, especially in Russia and Mongolia. Its modernization, of course, is the sole area of ​​responsibility of each ‘host’ country, though BCP key infrastructure parameters and operational procedures should be mutually agreed with cross-border partner. At the same time it should be noted that in 2020 significantly less cargo was transported through the BCPs in Southern Primorsky Territory of Russia than their current technical capabilities allow. The reason for this was quarantine restrictions, unilaterally point wise introduced by the provincial authorities of the PRC. Russian side as a rule was not notified in advance on the closure of the cross-border communication. It is very difficult to redirect even a part of the export-import cargo flow to the operating checkpoints belonging to other ITC today.
  •  Another serious problem is the rigid routing of transport arteries connecting the Russian Far East and neighboring countries of Northeast Asia, especially with regard to seaports. It combines the problems of land transport routes tied to specific ports, and the specialization of the ports themselves, unilaterally determined by their current owners solely for tactical reasons, while not taking into account long-term integration trends in NEA economy.

First of all, this refers to the expansion of major Russian coal exporters which seek to establish control over port facilities in the Pacific coast of Russia and export coal, as long as there is a market slot for this. However, the ever-increasing flow of coal has already led to overloading of TSR and BAM, the modernization progress of both has not kept pace with the appetites of coal tycoons. In a number of Russian ports, the environmental situation has seriously deteriorated due to the transshipment of coal in the open way. But, “green” priorities are becoming more widespread in the world, mostly caused not so much by concern for the environment as by political considerations, which resulted in a firmly taken course towards decarbonization of the global economy. This can lead to a forced termination of the massive purchases of thermal coal not only in Russia, but also in Mongolia and the North-Eastern provinces of China.


Let us address separately the situation with the transport and logistics sector in Mongolia. In many respects, Mongolia and Russia are experiencing similar problems in this area – underdeveloped infrastructure, especially at border crossing points, insufficient coverage of the territory by railways and roads, the predominance of bulk raw materials (coal, ore concentrate) in exports. It is logical and historically justified to resolve these problematic issues on the basis of common approaches, taking into account 100 years of special relations between our countries. At the same time, we should solve them basing on the “Win-Win” approach, not to the detriment of our GTI partners but in the common interests, jointly shaping a new concept of a joint transport and logistics network in Northeast Asia.

The issue of transportation of export coal and ore concentrates from Mongolia is especially important. Currently, Mongolian coal is almost completely transported by rail along the Tianjin – Mongolia Transport Corridor in the Chinese territory which is greatly overloaded. Therefore, when the Tavantolgoi mining megaproject in the Gobi Desert, Mongolia’s main export hope, is put into operation, the question of delivering its products to seaports for export to consumers from the Asia-Pacific region will become acute.

Of course, the ideal way to solve this problem could be the creation of a new energy / industrial cluster in the area of ​​the deposit, including a copper factory and a large thermal power plant operating on local coal. Modern technologies make it possible to generate electricity on the basis of burning coal with minimal damage to the environment. The new powerful TPP will be able to completely solve the problem of energy self-sufficiency for Mongolia. This strategic goal was listed the second in the program of Prime Minister U. Khurelsukh, which largely contributed to the impressing victory of the Mongolian People’s Party headed by him in the 2020 parliamentary elections. It is much easier and cheaper to organize the transportation of high-purity copper in ingots than bulk millions of tons of coal and ore. In addition, this product is guaranteed a high demand for many years, in contrast to the thermal coal.

However, it is clear that despite the undoubtedly bright prospects for the Gobi Desert energy / industrial cluster project, its implementation will require many years and significant investments, in particular, in the creation of a network of support transport infrastructure.

With the start of work on the Tavantolgoi field (2010), the Mongolian side intended to build about 4,000 km of new railway lines, covering the entire territory of the country. However, despite the participation of reputable global companies in the development of the project, such as McKinsey, the program very soon got mired in a series of corruption scandals and almost led to the bankruptcy of the entire national economy. The truth is that even if Mongolians could manage to implement what was planned 10 years ago even partially, this alone would hardly solve the problem of further transportation of Tavantolgoi products.

Therefore, today the Mongolian side is considering more than 10 options for coal transportation routes through overland communication lines and seaports of China, Russia and possibly, the DPRK.

It should be understood that it will not be easy to organize a large-scale transportation of Mongolian coal via the TSR, given the likely resistance from Russian coal corporations which see Mongolia as a serious market competitor. The Russian government, of course, can provide Mongolian shippers with a certain quota for the delivery of coal through TSR or BAM, but in the long term the problem must be solved using market methods. Thus, Primorye-1 ITC  has a certain throughput reserve capacity on the PRC territory and in principle, is capable of transporting large volumes of Mongolian bulk cargo. There are some other options as well. But for this it is necessary to solve one major problem – to move from a non-flexible system of corridors to a network organization of transport and logistics processes in GTR.

How do experts see the general outlines of the creation of a new network structure?

At the first stage, it is advisable to create local networks by uniting separate routes and looping the existing / under construction communications and logistics hubs where it is feasible.

Subsequently, we can consider the prospect of creating a unified transport and logistics network covering the entire territory of the GTR and even beyond its geographical mandate. The modern challenge for GTR and NEA is the creation of the Integrated Sea-Land Multimodal Transport Network incorporating a set of routes of all means of transportation. Moreover, it is about creation of the integrative infrastructure uniting transport and other industries. Major infrastructure modernization is necessary to create such a network, including both ‘physical’ (Hard) infrastructure (routes, bridges, hubs, warehouses, ports etc.) and operational procedures (Soft) – digitalization of logistics processes, harmonization of different national standards, joint procedures for emergency response. The road ahead is long and challenging. But, the results may elevate our region to a brand new dimension.

This is an abridged version of the article. Full text is available for registered readers only.

South Korean Companies Will Invest 11.8 Billion Rubles to a Fishing Port Project in Primorye

April 15, 2021

South Korean companies are investing 11.8 billion rubles in the implementation of the project to create the Podyapolsky seaport in the Primorsky Territory, the press service of the Ministry for the Development of the Russian Far East informed following a working meeting between the minister Alexei Chekunkov and RoK Ambassador to Russia Lee Sok Bae.

During the meeting, steps were discussed to restore and build up Russia-Korea trade and economic cooperation which was affected by the pandemic.

The Podyapolsky project involves the construction of infrastructure in the Shkotovsky district in southern Primorsky Territory for the transshipment of fish products and mixed cargo with a total volume of up to 1.2 million tons per year, as well as the creation of refrigeration facilities for the simultaneous storage of 25,000 tons of fish products. The Korean engineering company ”Hyein E&C” has already completed the preliminary feasibility study for the project.

Earlier it was reported that the project provides for the creation of an open warehouse with an area of ​​20,000 m2 and a cold storage with a capacity of 25,000  tons of one-time storage. Currently, the “Vladivostok Sea Fishing Port” OJSC (a stevedoring company on the territory of the port of Vladivostok) process the main volumes of fish products in the Far East of Russia. They can unload up to 2,000 tons of fish cargo per day.


Two Vessels for Yenisei River Are in Construction for 5 Billion Rubles

April 14, 2021

The volume of investments in the construction of two motor vessels for line navigation along the Yenisei River in the Krasnoyarsk Territory will amount to 5 billion rubles. Both vessels have already been laid down at the “Sredne-Nevsky shipyard in St. Petersburg, the governor of the Krasnoyarsk Territory Alexander Uss told at a plenary session of the Krasnoyarsk Economic Forum on Wednesday.

Andrey Dubensky” was designed to operate on the Krasnoyarsk-Dudinka line and has a boat on board for delivering passengers to the shore

According to the Russian River Register, the average age of passenger ships on the Yenisei at present is about 30 years, and the largest vessels, ‘Alexander Matrosov’ and ‘Valery Chkalov’, were built more than 60 years ago. The large double-deck diesel-electric ship ‘Lermontov’, which had been operating on the Yenisei since 1959, was decommissioned and sold to private hands in 2015. In September 2019, a private motor vessel ‘Maxim Gorky’ was transferred to the Yenisei from the Volga River, which began operating tourist tours at the end of July last year.

“We laid down the two largest motor ships for the river at the “Sredne-Nevsky” shipyard. We have dreamed about this for 20 years. The contract value is 5 billion rubles,” Governor Uss said, specifying that leasing funds were used for this. According to TASS, one ship will be named ‘Andrey Dubensky’, the second – ‘Victor Astafiev’. These ships are designed to carry 245 passengers at a distance of up to 5 thousand km. The vessels will operate on the Krasnoyarsk – Dudinka – Krasnoyarsk route, which is socially significant for the Krasnoyarsk Territory.


“Zvezda” Will Get Billions More

April 8, 2021

“Rosneftegaz” state holding will invest another 143 billion rubles to the construction of “Zvezda” shipyard in the Far East. The corresponding government directive was released in February as it follows from the reports published on April 8. In 2020, the Cabinet of Ministers already ordered “Rosneftegaz” to buy out the shares of the shipyard worth 100 billion rubles. Capital expenditures for the creation of a shipyard for large-scale construction were estimated at 200 billion rubles in 2019.

The state-owned “Rosneftegaz” is to acquire shares in the amount of 143.2 billion rubles as part of an additional issue by private subscription from JSC “Modern Shipbuilding Technologies” (82.35% belong to “Rosneftegaz”, 13.1% – to the “All-Russian Regional Development Bank” controlled by “Rosneft”, remaining 4.55% belongs to “GPB Industrial Investments”), which owns “Zvezda” shipbuilding facility. The release of the corresponding government directive on February 15 is stated in the financial statements of Rosneftegaz for 2020.

“Zvezda” receives unprecedented support measures from federal government. For example, the government planned to subsidize two-thirds of the rate on loans taken by a consortium of “Rosneft”, “Rosneftegaz” and “Gazprombank” for shipyard construction, In addition, the state subsidizes the construction of large-capacity ice class gas carriers and product carriers for “NOVATEK” at Zvezda. In fact, the subsidy amounts for 31.6 billion rubles for 2021–2023, which should compensate for the difference in shipbuilding costs at a Russian shipyard compared to South Korea. A metallurgical plant with a capacity of 1.5 million tons of steel and pipe products worth $ 2.2 billion also will be built in Primorsky Territory for “Zvezda” shipyard.



April 7, 2021

Vladimir Uyba, the head of Komi Republic took part in a meeting on the organization of regular container shipping lines and coastal transportation  on sea route connecting St. Petersburg with  Vladivostok. The meeting was chaired by Yuri Trutnev,  Deputy Prime Minister of the Russian Federation.

For Republic of Komi, the organization of container traffic via the Northern Sea Route (NSR) is an extremely important area of activities that can give a new impetus to the development of the region’s economy and help dramatically increase its industrial potential, the press service of the head of the region reports.

In the summer of 2020, the Republic became the first constituent entity of the Arctic zone of the Russian Federation to proactively assist “Rusatom Cargo” in analyzing the potential for the formation of a “return cargo base” necessary to achieve a commercial effectiveness  of the NSR.

Local timber (woodworking) industry has especially significant potential for container transportation to Asia-Pacific markets. The region’s own mineral resource base (oil, gas, coal, bauxite, titanium, mining materials), as well as the products of the pulp /paper and polymer industries also have a high potential for transportation via the NSR.

Initial assessment shows that Komi has the potential to create at least 10% of the total volume of the NSR return cargo base (excluding transit).

At the same time, for the export of this cargo base, it is necessary to expand transport links to approach the ports of the NSR. For the Komi Republic, the basic infrastructure projects for the expansion of such transport corridors are the Northern Latitudinal Land Route, the “Barentskomur” railway project and the construction of the “Indiga” seaport. Currently, work is underway to create an Arctic medical cluster in accordance with international standards on the territory of Vorkuta Town to serve the crews and passengers of ships passing the NSR.



April 7, 2021

Yuri Trutnev, Deputy Prime Minister of the Russian Federation is in the Kamchatka Territory on a working visit. Together with Governor Vladimir Solodov, he examined the berths at the Mokhovaya Bay. Within the framework of the agreement concluded with the regional government, FSUE “Natsrybresurs” is carrying out the reconstruction of  berths No. 10, 11 and 12.

The project for the complex  reconstruction of Mokhovaya Bay facility is related to the investment plans of the” Free Port of Vladivostok” resident company, which plans to create a terminal for transshipment of fish products, including freezing facilities, container platforms and a storage site for refrigerated containers. The new facility should provide balanced service to fishing fleet in Avacha Bay. In addition, the new berths will make it possible to increase the volume of cargo transshipment, including within the framework of the Northern Sea Route. Fish from Kamchatka is shipped by the Northern Sea Route via the “Seroglazka” terminal  at present which has a limited throughput capacity.” Rosrybolovstvo” Federal Agency is studying the issues of organizing a permanent shipping line along the NSR to transport fish and fish products to the European part of Russia. The draft plan will include measures to develop port, logistics and ship repair infrastructure, as well as to reduce tariffs for transportation via the NSR. FSUE “Atomflot” is ready to operate up to four flights annually for this specific cargo from 2021.



March 31, 2021

The governors of St. Petersburg Metropolitan City, Murmansk, Arkhangelsk, Sakhalin and Kamchatka Territories proposed to the government to introduce the concept of the “Great Northern Sea Route” and provide it with state support measures. In their opinion, the route from St. Petersburg to Vladivostok will help to increase cargo traffic between regions by sea. The governors sent a letter with this proposal to Deputy Prime Minister Yuri Trutnev in February. This letter says that at present the strategic planning for the development of the NSR almost does not cover the transport, logistics and industrial infrastructure of St. Petersburg, the Arkhangelsk, Murmansk, Kamchatka and Sakhalin Territories, but the use of this infrastructure makes a significant contribution to the progress of transportation along the Arctic route. The governors noted the prospects of sea transportation regarding to a current low level of the transport networks between these territories. . They believe that the lack of measures of state support for domestic sea transportation is holding back the formation of a stable cargo flow between the constituent entities of Russia by sea.


The Northern Sea Transit Corridor As the Future of Russia in Global Logistics

How to reduce the cost of container shipping by 25% and compete with the Suez Canal by developing the domestic Arctic routes.

(abridged version, without graphics and details of modeling)

Felix A.Shamrai


Arctic Center

St.Petersburg State Marine Technical University

The Northern Sea Transit Corridor (NSTC) project was initiated by “Rosatom” State Corporation in 2019 with the aim of creating a new option for global logistics market – the delivery of goods between North-Western Europe and North-East Asia via the Northern Sea Route (NSR).

The idea of ​​attracting foreign cargo to the NSR began to sound actively after the May 2018 decree of Russian President Vladimir Putin. According to the document, by 2024 the cargo turnover of the NSR should increase to 80 million tons. For comparison, in 2018 this figure exceeded 20 million tons, in 2019 – 31.5 million tons.

Attention to the NSR transit potential increased after “Rusatom Cargo” (the logistics operator of the “Rosatom” state corporation) announced its intention to become a leader in the logistics services market by attracting international transit cargo traffic to the Northern Sea Transport Corridor. The basis of transit flow, according to the idea, should be containerized cargo. The NSTC project is aimed at attracting international transit sea cargo transportation, as well as the development of the corresponding infrastructure, including the construction of the necessary transport and logistics hubs and a commercial fleet. The start of NSTC commercial operations is planned for 2027.

To test various options for the NSTC implementation we created its technical and economic mathematical model. Its reliability has been verified in one of the global TOP-3 container shipping companies. We carried out modeling of various configurations of the Project structure taking the Shanghai – Rotterdam line as basic for calculation. In our opinion, the results obtained will allow “Rosatom” group of companies to select the most effective decision on NSTC implementation.

Container transportation lives at the expense of customers, for whom the most important factor is the cost of logistics. The reliability of the container service (its rhythm) is perceived by customers as a matter of course. The cargo base of the container line depends, first of all, on the cost of container delivery – $ / TEU.

Our simulation modeling showed that the delivery of a container from port to port, without intermediate transshipments on the route, is somewhat more profitable by LNG-fueled vessels (~ 8%) via the NSTC than along the Southern route (Suez Canal). But this benefit is not enough to shift from the South to the North the already established ‘habitable’ container flows, in which tens of billions dollars have been invested.

The use of nuclear-powered container ships gives a significantly greater benefit (~ 21%) via the NSTC comparing to the Southern route. But the world’s carriers have invested too much money in this route to abandon it. And, although there are no legal prohibitions on the entry of nuclear-powered ships into European ports, all socio-political “environment protection” resources will be involved to prevent the shift of container cargo base to the NSTC.

We have also considered the possibility of creating a container line (service) with intermediary hubs, when part of the total shipment is done by ordinary container ships with remaining part of the route by ice-class vessels under icebreaker escort: Rotterdam – Murmansk – Petropavlovsk – Kamchatsky – Shanghai (4 hubs) and Rotterdam – Murmansk – Shanghai (3 hubs).

Modeling demonstrated that that the more transshipments (more hubs), the higher the cost of container service, the “smaller” the vessel, the higher the cost of container service.

The analysis showed:

● inapplicability of the transshipment scheme in both Murmansk and Petropavlovsk – Kamchatsky (684 $ / TEU via NSTC > 610 $ / TEU through the Suez Canal);

● inapplicability of container ships with a capacity of 5000 TEU compared to 24000 TEU ($ 849 / TEU5000> $ 684 / TEU24000);

● the possibility of competition between the NSTC (Rotterdam – Murmansk – Shanghai) with the Suez route (582 $ / TEU NSTC (3 hubs) ~ 610 $ / TEU Suez Canal)

To create a cargo base for a new container service (a new container line via the NSTC), it is necessary to ensure a competitive cost of delivery of one TEU. It should be at least 25% lower than through the Suez Canal. A high share of the cost of maintaining a container stock – 37% and a high share of the cost of handling crane operations – 31%. A significant share (17%) goes to the maintenance of the line’s fleet. The three above-mentioned expenses form 85% of the container service prime cost. Passage through the Suez Canal, fuel, crew costs – are not decisive in the formation of the cost.

The cost of maintaining a stock of containers should be reduced. The faster the ships go, the higher the container turnover, the lower the costs for their possession. At the same time, fuel costs will be higher. Considering that fuel has less weight in the overall cost of service, it makes sense to use more fuel at high speeds of container ships. By creating a Russian container line, we propose to create the latest robotic production of containers, thereby reducing their cost by up to 2 times. This will significantly reduce the “container” cost share in the NSTC performance scheme.

Each additional transshipment of containers increases the cost of service by ~ 15%. That is why it is so important that the number of transshipments is as small as possible. When forming the NSTC service, it is necessary to strive to minimize the number of hubs and transshipments.

We understand that Europe is unlikely to allow a nuclear-powered container ships to enter its ports (Rotterdam in particular). However, such a line without “asking” anyone can operate through the Russian hub (in St. Petersburg or Murmansk) via the NSTC to Shanghai.

The next stage of our work was the modeling of a container line between Rotterdam and Shanghai via the NSTC comparing to the Southern route. In the model, we took into account:

● containers from Rotterdam to Murmansk are delivered by 24,000 TEU class LNG-fueled container ships (450 $ / t);

● average load 20,000 TEU / ship;

● in Murmansk, transshipment is carried out on nuclear-powered ships that go to Shanghai.

● current exchange rate – 75 rubles / $;

● the possibility of high speeds of a nuclear-powered container ship in clear waters due to its high fuel efficiency;

● the possibility of high speeds of NSR passage due to the emergence of the LK-60 and LK-120 class icebreaker fleet;

● the possibility of reducing the cost of production of containers;

● the possibility of a high-latitude NSTC route was not taken into account;

● capital expenditures for the development of port infrastructure was not taken into account;

When the cost of delivery of one container reaches 25% less than that of competitors, there will be no forces that could prevent the formation of a container cargo base for the NSTC – this is the target of the entire project. We have shown the possibility of achieving the level of competitiveness of the NSTC in comparison with the Southern route by 25% ($ 575 / TEU < $ 766 / TEU), which will provide a cargo base for container transportation.

We have modelled two options of the NSTC: with the creation of a hub either in St. Petersburg or in Murmansk. The latter option is preferable for transit between the EU and China’s northeastern coast. But the route through St. Petersburg (ports of Bronka or Ust-Luga) creates benefits for Russian importers. Today the Russian client base forms a flow from Asia of about 10,000 TEU / week (0.5 million TEU / year). The cost of intermodal container delivery (40 ft.) stands for 282$./unit (Murmansk – SPb route) and 610$./unit (Rotterdam – SPb route). But if the hub is located in St. Petersburg, then the intermodal ‘tail’ disappears. Accordingly, import delivery in this case is the least expensive $ 957 40ft <$ 1836 40ft

With a comparable (through Murmansk and through St. Petersburg) containers delivery cost via the NSTC, the positioning of the hub in St. Petersburg creates for Russia a turnover worth  $ 1.2 billion / year and a net profit of $ 286 million / year. The option of hub location in Murmansk is beneficial for transit clients, but has low margins for the NSTC project itself.


● Creation of a new global logistics route along the NSTC is possible and economically feasible for all participants: customers of container transportation, container services (container lines), ports;

● The owners of the existing container lines are not interested in NSTC, as they have invested very heavily in the Southern routes;

● It is necessary to create a new global carrier;

● Creation of a large Russian container intermodal operator for NSTC will further increase the competitiveness of the line due to benefits for Russian export-import container traffic;

● Creation of a new container line served by Russian global operator makes it possible to create container production at a price significantly lower than now. This will significantly increase the competitiveness of the line;

● It is necessary to reduce the number of transshipments on the route;

● It is necessary to develop innovative approaches to loading and unloading operations aimed at reducing its time and cost. For example: the ability to transship containers ‘board – board’ bypassing the shore;

● The main challenge for a container ship is the minimum turnaround time on the line, then fewer vessels are required. The higher the speed on the route, the shorter the route, the faster the turnover;

● Nuclear container ship provides the greatest competitiveness for a container line;

● The location of the hub in St. Petersburg ensures the viability of the entire container service via the NSTC;

● According to expert estimates, the location of the hub in St. Petersburg will require minimal investment due to the high level of readiness of Ust-Luga and Bronka seaports;

● The smaller the size of container ships relative to 24,000 TEU-class, the lower their competitiveness. 5000 TEU Arc7 container ship will never become commercially profitable due to its lack of competitiveness in comparison with the Suez route;

● The cost of icebreaker assistance is not a factor that somehow restrains the development of the NSTC.This article did not use any materials from other authors. Diagrams and tables are based on the technical and economic mathematical model built by the author. All these models are the author’s expert assessments, which were discussed with competent experts.

China to Build a Railway to Tibet

China has begun construction of a high-speed railway line that will connect the city of Lhasa in the Tibet Autonomous Region with the provincial capital of Sichuan, Chengdu City. The construction cost of the 1,800 km line is estimated at $ 49.4 billion (319 billion RMB), Nikkei Asia reported.

The road will be commissioned in 2030. The price of the railway project exceeds the price of the “Three Gorges Dam” (the gravity dam hydroelectric power station, located on the Yangtze River in Hubei province (China), is the largest power plant in the world in terms of design capacity of 22.5 GW), which cost 250 billion RMB, making the railway line to Tibet the largest construction project in China.

The aim of the project is to stimulate tourism and business travel to Tibet. Local media reports that Beijing is also looking to seize the region’s resources such as copper and lithium.

Currently, the journey by train from Chengdu to Lhasa takes about 40 hours. The transportation over the new direct railway line will be carried out at speed of 120 to 200 km / h, which is expected to reduce travel time to just over 10 hours.

“The railway project is of great importance for maintaining national unity, promoting ethnic unity and strengthening stability in the border areas,” Xi Jinping said.

This railway project is mentioned in China’s five-year plan to 2025 and its long-term goals until 2035. But the construction could face opposition from India, which is in a border confrontation with China. Water from Yarlung Tsangpo River flows to India, and construction works along the river can affect water level and quality downstream.



The very fact that China is ready to invest US$ 50 billion to construction of a railway in remote and desolated region is amazing. Obviously, this project will never become commercially profitable. Rather, Beijing demonstrates the eagerness to pursue its strategic interests at any cost, and maintaining full control over rebellious Tibet is probably a worthy goal.