Vladivostok Port

The party is over for operators focusing on Russian routes: rates have halved from their peak as more opportunistic newcomers jumped into the fray, increasing shipping capacity in the space.

Information from South Korean liner operators indicates that Busan-Russian Far East rates now range between $1,200 and $2,300 per teu, down from a high of $5,700/teu in March 2022, the month after Russia invaded Ukraine.

International sanctions forced many mainline operators to suspend services to Russia, creating a vacuum that was filled by newcomers such as Safetrans, OVP Shipping, Yangpu New New Shipping and Global Field Line.

South Korea-Russia exports, in a lull since May, have continued declining. Figures from Korea Customs show that in June, just 12,800 teu was transported from Busan to the Russian Far East, down 12% from May.

Particularly, Vladivostok-bound shipments were down 29% to 4,800 teu in June and only shipments to Vostochny, which had been falling since March, increased, by 2%, to 8,000 teu in June.

Figures for July are not yet ready but The Loadstar understands there was no pick-up in volumes and freight rates.

Linerlytica analyst Tan Hua Joo told The Loadstar a similar picture has emerged for China-Russia container shipments, with freight rates having halved, to $3,000 per 40ft, compared with February.

But even with the downward trend in rates, newcomers are not dissuaded from entering the market. On 28 June, China’s Hebei Port Group launched the first liner service connecting Hebei province to Far East Russia, with the Lian He Cai Fu. The service calls at Huanghua in alternate weeks, with regular calls at Yantai, Qingdao and Taicang, moving cargo to Vostochny and Vladivostok.

In July, Yue Yang Russia Speed Navigation International Logistics, a new forwarder that started by railing containers from China’s Hunan province to Russia, opened a liner service between Hunan and the Russian Far East port of Slavyanka with a second-hand deck cargo ship, Xin Ao Yuan Jian, bought from Cosco and converted into a containership.

And this month, former Maersk executive Zsolt Katona is said to have started Cstar Line, chartering 18 boxships, with a total capacity of 23,000 teu, to operate services from China, South Korea, Turkey, Israel and Egypt, to Vostochny, Novorossiysk, Kaliningrad and St Petersburg. Cstar will also purchase slots from Mountain Air Shipping, OVP and Inteco Lines.

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