Alternative carriers flocking to Novorssiysk, claims Ukrainian company

Although global shipping lines had discontinued service almost completely to the Russian Black Sea port of Novorossiysk by Q3 2022, there were plenty of alternative carriers ready to replace them, according to Ukrainian shipping intelligence firm Informall BG, writing in Maritime Executive.

Because trade between Russia and the EU via the Baltic Sea was sanctioned in response to the Russian invasion of Ukraine in 2022, Russian traders began to shift towards alternative routes that avoided EU transshipment ports. That meant there was a shift in exports and imports to the Black Sea port of Novorossiysk, that being one of Russia’s few remaining sea-bound options

The Russian Baltic container terminals lost more than half of their container traffic during January-September 2022, compared to the same period in 2021. Meanwhile Russian container turnover on the Black Sea – which largely relies on Turkish container ports for transshipment – fell by just 11% over the same timeframe.

Informall BG’s found that significant logistical changes had affected containerized cargo moving via St Petersburg – which before the invasion had been a major gateway for Russian containerized freight. Certain types of cargo (such as coffee and cocoa beans) that traditionally arrived at the port in ocean containers were now shipped directly to the country by road and rail.

Novorossiysk had managed to stabilize the flow of import and export containers, primarily through well-developed Turkish-Russian relations in the trade and logistics sectors. After a two-month volume fall in the port of Novorossiysk, its container terminals regained 9% month-over-month in September.

Shipping lines did not carry any considerable volume of shipments to or from Novorossiysk prior to the war, but since February 2022 the port has been used to connect to Asia, Africa, and South America. Russia now uses a limited number of destinations for its import and export needs.

Parallel import of various goods (including dual-use products) facilitated by Informall said that the transport systems of Iran, the UAE, China and India had become a common way to sidestep the sanctions against Russia.

Because many large international shipping lines stopped dealing with Russia, Black Sea regional and niche carriers had stepped in to fill the gap, the intelligence firm claimed.

Daniil Melnychenko, a data analyst at Informall BG, said that “the situation on the BSEA market today is comparable to the period of time when global ocean carriers reoriented a chunk of their capacities to the Transpacific and Asia-Europe tradelines in 2H 2020 – 2021 due to skyrocketing spot rates and unprecedented demand for the tonnage and empty container equipment in South-East Asia”.

He added that “as global carriers retreated from regional services and focused on the more lucrative major tradelanes, regional and niche carriers such as Turkish ‘Akkon Line’ launched services to Novorossiysk during the period of the COVID-19 pandemic; Other operators used that chance to develop already existing services and increase their market share.”

Market changes driven by Russia’s moves in the Black Sea region and the consequent political instability had created a window of opportunity for those shipping companies that were ready to take their chances in the war-disrupted market, said Melnychenko. Turkish-origin private carriers of various sizes which facilitate cargo moving to/from Novorossiysk increased their volumes of Russian container traffic in 2022. 

One example cited was Sidra Line, which launched in May 2022. Sidra launched a feeder, Novorossiysk Express Service, connecting Russia with the Turkish ports using two 1990s-built, Vanuatu-flagged, chartered container ships – the 361 teu, 2,992 gt Commander (IMO 8906464) and the 374 teu, 4,107 gt Keremcan (IMO 9118288). As of January 23rd the former was at Bosphorus North Anchorage and the latter was at Novorossiysk, Russia.

(https://sidraline.com/schedules)

Informall said that Turkiye-based Arkas, Admiral, Akkon, and Medkon liner operators had increased their volumes in the Russian-BSEA market since the beginning of the war in Ukraine. According to Informall BG, these carriers’ cumulative market share increased from 16% to nearly 55% during the first seven months after the Russian invasion began.

Russian liner operators had also emerged. Russia-based ‘Ruscon’ and ‘Trans Container’ (TC) multimodal logistics operators – both part of Russian logistics holding company Delo Group – are now the major container logistics operations in the Black Sea area.

At the same time, Delo Group, through its subsidiary logistics operators and its own container terminal – NUTEP, took advantage of capacity in a market which many of the previous participants had left.

Delo increased its volume in Novorossiysk by 26% within seven months, said Informall.

Vassiliy Vesselovski, CEO of Informall BG, said that “a window of opportunity in the Russian-BSEA container market exists and regional carriers are partly compensating for the capacity gap that emerged since the global carriers’ exodus from Novorossiysk.”

He added that “our observations indicate that tonnage availability is not a significant issue for Russian exporters today”.