Businesses are thinking about supplying goods to China in “disposable” containers

The accumulation of empty containers at terminals in the Moscow region, which are impossible or expensive to send back to China, led market participants to think about deliveries in “disposable” containers. The scheme is as follows: a used container is purchased in China for about $1 thousand, which can be returned when it is returned as metal in the Russian Federation and there is no need to pay a $1.2–1.4 thousand premium for sending it back. Operators believe the idea is viable, and some have already tested it successfully. However, market participants warn: the quality of such containers is low, so not everything can be carried in them, and the approach itself is more of a situational solution, rather than a panacea.

As participants in the container market told Kommersant, faced with the problem of accumulating empty containers in the Moscow Transport Hub (MTU), which were too expensive to return to China for new cargo, the industry began to discuss and even test the option of importing in “disposable” containers. The central region, primarily Moscow, is the main consumer of container imports from China. But organizing return loading is difficult due to the imbalance of container trade with China: the incoming flow in the ports of the Far East is 300 thousand TEU higher than the outgoing one. At the same time, the transportation of empty containers to the east is currently limited.

The accumulation of containers in MTU is a regular phenomenon, worsening after peak import seasons (see Kommersant of February 11, 2022). This year, the problem has worsened against the backdrop of an increase in imports of containers and weak export dynamics. Senior Vice President of Delo Group of Companies Denis Ilatovsky told Interfax that we are talking about tens of thousands of containers. “The volume that has accumulated in Moscow and the western regions – according to some estimates, 150 thousand containers – is four times higher than in the normal period,” said Leonid Shlyakhturov, executive director of FESCO Integrated Transport, on November 14 at Transport Week 2023 .- Ours reached 4 thousand or a little more. In a normal period, even during the peak period, the volume of containers was about 1.5 thousand.” Operators are forced to offer a discount for sending cargo to China: in May it was $400–1,100 per 40-foot container, in July – already $1,200 (see Kommersant on June 21 and August 18).

“The issue of recycling the old park may be raised here,” says Leonid Shlyakhturov. “There have been proposals to use disposable containers from east to west. In general, this may be a solution: recycling into scrap metal, small compensation. Because the container itself now costs about 100 thousand rubles, you can buy a used one, this is without taxes and VAT, and scrap metal costs about the same – 25 thousand rubles. per ton. The owner is willing to pay $1,200–1,400 for returning a container from the Moscow hub to China. Can you imagine? I brought a container here, and I have to include this marginality in the import rate in order to recoup it on the way back.” According to him, it is possible to consider proposals for recycling the park, “to simplify the issue of its legalization and in the future melting it down into some more useful things.”

According to the executive director of the Trans Synergy company (part of the ESP container union, owns a terminal in Lyubertsy) Stanislav Stankevich, in China there is now a surplus of containers, according to various estimates, from 3 million to 5 million TEU, with a lot of used containers: “ These containers are bought for $1 thousand, brought to the Russian Federation and sold for scrap.” This scheme even allows some players to earn money, he notes.

The Price Index Center (PIC) of Gazprombank notes that it is becoming increasingly difficult to find container equipment in China for sending goods to Russia: “The most acute shortage today is in Chongqing, a major automotive manufacturing center. Rates for issuing containers for the ever-growing export of local products to Russia have already reached $2 thousand and can grow further.” In these conditions, they add, the purchase of containers for transportation from China and the subsequent disposal of containers in Moscow “could immediately act as a situational solution to unload the capital’s terminals, maintain import volumes and curb the growth of transportation costs.”

“However, there is a significant drawback – the poor quality of such used containers,” emphasizes Stanislav Stankevich. “Accordingly, most types of cargo cannot be transported in them.” According to him, it is necessary to monitor the quality of containers in order to maintain a high level of service.

TransContainer (part of the Delo Group of Companies) believes that the problem of the accumulation of empty containers in MTU requires a comprehensive solution. “It is necessary that it is beneficial for the owners not to store containers abandoned, but to leave them in logistics circulation,” the company is confident. “We do not see the possibility of effectively solving the problem through one measure, for example, “disposable” containers, we need a systematic approach.”

Natalya Skorlygina