News / China-Russia box trade still expanding despite falling rates

Photo: VesselFinder

Operators of Russia-bound container shipping services continue to expand their service offerings, despite the recent downward pressure on rates.

Newcomer CStar Line, which began operations last month, has teamed with veteran South Korean operator Sinokor Merchant Marine to start a China-Russia service, while Yangpu New New Shipping has deployed more tonnage to its service through the Northern Sea Route.

Sinokor and Cstar’s service has a port rotation of Yantian-Nansha-Xiamen-Shanghai-Vostochny-Yantian, and its first sailing departed on Sunday, the newly chartered 2,902 teu TB Bright City.

The service turns around in three weeks and will operate with two other ships operated by CStar Line, the 2,206 teu Mao Gang Guang Zhou and Mao Gang Quan Zhou.

“CStar appears to have taken over some of the services of Russian forwarder Transcontainer. Although rates to Russia have dropped, it remains profitable for the operators,” said Linerlytica’s Tan Hua Joo.

Meanwhile, Yangpu has added three ships to the China-St Petersburg Northern Sea Route service after a successful eastbound 38-day trial voyage by the 1,638 teu Newnew Polar Bear.

That ship departed Xingang on 22 August for a westbound voyage to St Petersburg, joining the 1,220 teu Xin Xin Hai 1 and 2,741 teu Xin Xin Tian 1 that departed on 1 August and 31 July, respectively, on the same route via the Arctic. A fourth ship, the 3,534 teu Newnew Star, departed on its eastbound voyage from St Petersburg yesterday.

One bright spot for operators is that cargo volumes have gone up due to the summer peak season. Volumes from Busan to Russia’s Pacific ports in July hit 13,600 teu, a 6% increase on the previous month.

However, with Chinese newcomers entering the market, freight rates continue to decline. Last month the average freight rate for Busan-Far East Russia was between $1,000 and $2,200 per teu, down about $100 from the month before.