REGIONAL LOGISTICS OF RUSSIAN FAR EASTIN CRISIS ENVIRONMENT

Anna K. Voronenko
Admiral Nevelskoy Maritime State University, Vladivostok

Abstract: The article analyzes the dynamics of container turnover in
the ports of Russian Far East and the eastern sector of the Arctic over the
last twenty years, in particular the influence of various external
unfavorable factors, such as the economic crisis, shortage of rolling stock,
restrictions due to COVID-19 pandemic, etc. The container transportation
segment has been accepted for the study since it is one of the most sensitive
to changes in the economic situation of both the regional and national
scale. In addition, cargo turnover of seaports is one of the most
comprehensive and relatively accessible for research statistical data sets in
the field of maritime transport. The cargo turnover in the ports of Russian
Far East is simultaneously influenced by domestic trends and restrictions,
as well as by external factors and events in the North-East Asia. In some
cases, it is necessary to assess not only the above-mentioned events
affecting the container transportation, but also short-term and
unpredictable events like shortages of empty container assets in China
when certain ports had to stop operations, truck drivers strikes in South
Korea and other. These events ultimately affected the work of sea carriers,
delays with ship calls at the ports of Russian Far East, accordingly
hampering the container turnover in the ports. Since the Far Eastern ports
are key gateways for trade with major partners in the Asia-Pacific, a
retrospective analysis of its performance in different conditions can serve
as one of the important elements for building a forecast in both the short
and long term.
Keywords: Far East, Primorsky Territory, container transportation,
seaports, shipping lines, container logistics.

Introduction
Stevedoring companies in the Far East have been subject to various
trends of both economic and political nature for two decades, maintaining
stable growth despite all the obstacles (Fig. 1). The events of 2019 and then
2022 forced Russian participants in transport and logistics processes and
their partners to pay special attention to the main sea gates in the East.
However, despite the high demand for transport and logistics services in
this direction, growth in this period was relatively moderate due to serious
infrastructure limitations, as well as significant inertia of maritime transport
in general. However, it is worth noting that the national structure of
transportation has changed significantly recently. For a long time since the
early 1990s, Japan, followed by the Republic of Korea, remained leaders in
foreign trade turnover passing through the ports in the Far East.
Transportation in the Chinese direction was gradually increasing with the
growth of the Chinese economy and the development of trade and transport
infrastructure. Since 2015, the situation has significantly changed towards a
steady increase in traffic to / from China. While the high growth rates of
transportation in the direction of China occured mainly due to a significant
increase in export shipments of coal, oil and petroleum products, containers
play a key role in transshipment volumes in the import direction. Then
there was a sharp jump in the volume of imports from China in 2022 – an
increase of 2.5 times compared to the volumes of 2021 due to general cargo
and containers. The main reason for this tendency was the replacement of
import products from ‘unfriendly’ countries with Chinese goods.

Main trends of the last 20 years:

• Share of loaded containers in exports is increasing (typical for all
  terminals in this segment), which indicates some growth in the export
  segment in foreign trade.
• Significant impact of the dynamics in the international container
  equipment market and the strategy of key players – sea carriers – on the
  Russian foreign trade transportation market, which was largely
  demonstrated by the situation with a shortage of empty containers noticed
  in the end of 2020.
• Growth in the export of metals and timber cargo in containers.
• Growth in transportation of consolidated cargo. The breaks in air
  traffic which began in early 2020, regular congestion at land checkpoints
  during the implementation of quarantine measures, a sharp jump in the cost
  of transportation – all this stimulated an explosive growth in demand for
  groupage transportation by sea.
• Unstable dynamics, as well as a significant decrease in transit cargo
  transportation, especially from / to China, which affected the container
  turnover of the Zarubino port (5-fold decrease).

The organizational specifics and established customs and practices in
the linear shipping industry in the region exerted the main influence on the
dynamics in container shipping. Linear shipping has to operate in strict
accordance with a publicly announced schedule, with fixed vessel sizes,
which allows planning of port activities and its occupancy. Therefore, large
FE ports that handle general cargo (Vladivostok, Vostochny etc.) try to
attract regular lines as much as possible. [1]
However, it was not the sole factor affecting the structure and
dynamics of container turnover. We have to turn to a more detailed
retrospective of port container turnover in order to take into account all the
necessary aspects of the changes that happened.

2003 – 2013

The period of the early 2000s was characterized by a steady and
significant increase in container traffic in all directions (export, import,
transit, and domestic) caused not only by the intensification of foreign
economic relations, but also because of initially lower level of
containerization than in developed countries. With the growing demand for
maritime transportation in containers, maritime services at container
terminals (VSK, VMTP, VMRP) were rapidly developing, the accelerated
container trains were introduced. The imports was undoubtedly a driving
force during this period. Three primary directions for import transportation
of goods in containers through the ports in the Far East have been formed
in 2000-2010:

• From China (two large sea shipping lines – FESCO with rotation of
  various ports and SASCO with service through Shanghai);
• From Japan (joint service FESCO and MOL);
• From the Republic of Korea (FESCO , Maersk, SK Line, Korea
  Marine Transport, etc.).

At the same time, cargo of the defunct Vietnamese line was serviced
on other lines with transshipment in Shanghai or Busan, or other major
ports. According to a similar scheme (via Busan), American, Australian
and cargo from other Asia-Pacific countries arrived, and companies that did
not have direct lines from Vladivostok to China (for example, Maersk)
served their customers in the same way. The variety of options has led to an
increase in the quality of services provided by carriers and forwarders, and
has become one of the reasons for the overall growth of container turnover
at ports. [2,3,4]
The total container traffic through the ports of the Far East from
2003 to 2012 increased by more than 2.5 times to 1,362,512 TEU (Fig. 2).
Thus, the increase in the turnover of containers in exports is associated with
a number of factors, for example, with the return of containers that
previously arrived with cargo in imports, etc. Lumber, metals, scrap metal,
pulp and chemical cargo were containerized. Coastal freight traffic also
tended to increase, primarily due to the containerization of supply cargo.
(End of introductory fragment)