Russia drowning in Chinese containers, but rates may grow by 10 per cent

Shortages plague many parts of the Russian rail network, but no such issues exist when it comes to containers. As China exports much more to Russia than the latter can send back, containers get stranded on important transport nodes. As a result, freight forwarders need to purchase new containers to continue shipping, and rates may grow by no less than 10 per cent in the coming weeks.

There are many more containers coming into Russia than leaving it due to the trade imbalance with China, which is aggravated by a seasonal increase in Chinese export volumes. Consequently, hundreds of thousands of empty containers are idling in Moscow and other important transport nodes in the country, according to Russian publication RZD-partner.

As a result, freight forwarders looking to ship to Russia are having to buy new containers. RZD-partner says that the situation has worsened to such an extent that the price of containers is skyrocketing. Reportedly, Chinese operators are charging up to 400 dollars more per container for the first ten days of October. A 10 per cent increase is predicted over the entire month, which would mean a maximum price growth of 850 dollars per shipped container.

Containers waiting for three weeks

Russia is overwhelmed with containers, which is leading to problems at various locations in the country. One of those places is the eastern region of Zabaikalsk, a source tells Russian media. “During the last few weeks, Zabaikalsk was completely overloaded, trains stood for several weeks, the wait for reloading was 14 days at best, but sometimes containers stood for 3 weeks”, they say.

“The main reason is the irregular delivery of wagons from the Russian side. Zabaikalsk had the most difficult situation, at some point they even introduced a ban on the import of trains from China, and everyone went to alternative crossings like the Mongolian Altynkol, but everything also quickly ‘clogged up’ there”, the source explains. While the situation has not yet returned to normal, there has reportedly been an improvement since the peak of the problems.

Not only containers, but also open wagons

The build-up of containers throughout the country is not the only logistical rolling stock challenge Russia is facing at the moment. Besides the problems with containers, its Far East is struggling with an overflow of empty open wagons. As Russia transports coal to China, the coal has to be reloaded into Chinese wagons that are suitable for standard gauge. The emptied open wagons are then left at the border.

In an attempt to hit two birds with one stone and efficiently transport containers into Russia, the country is loading them into those idle open wagons to transport them simultaneously. In order to stimulate the practice, Russian Railways introduced a discount on combined open wagon-container transportation.