Container transportation by rail continues to grow, experts expect the market to slow down in 2024

Container shipments continued to grow in August and, following the results of eight months, exceed last year’s figures by almost 13%. The growth drivers were the transportation of cars and components, as well as mineral fertilizers. The market expects to exceed the mark of 7 million TEU by the end of the year. At the same time, analysts warn that the market is overheating, which, under the influence of the weakening ruble and infrastructure restrictions, will result in a decrease in traffic as early as 2024.

Container traffic by rail continues to grow. In January-August, 4.8 million TEU of loaded and empty containers were transported in all types of traffic, which is 12.7% more than a year earlier, the number of loaded containers increased by 17.8%, to 3.54 million TEU. The maximum growth was shown by the transportation of cars and components, as well as mineral fertilizers (an increase in both indicators by 2.1 times, to 296 thousand and 169 thousand TEU, respectively). The transportation of milled products increased by 1.5 times, the transportation of vegetables and fruits by 1.4 times.

The container flow from the Far East, which survived the crisis in autumn and winter, is also growing. In August, the average daily export from the ports of the region amounted to 3176 TEU, 17.4% more than a year earlier. Russian Railways is increasing the transportation of containers in gondola cars from the Far Eastern Federal District, which is currently subject to a 20.7% discount introduced a year ago (see “Kommersant” dated September 28, 2022). Gondola cars accounted for about a quarter of container traffic from the Far East.

Delo Group of Companies expects that by the end of the year the volume of container transportation by rail will exceed 7 million TEU. In July, RZD also said that the momentum gained allows reaching this indicator (this implies an increase of 7.3% compared to the previous year). “Among the challenges hindering traffic growth are the principles of regulating access to scarce railway infrastructure, as well as the imbalance of imports and exports in the Far East, which creates tension throughout the network,” Delo Group notes.

The increase in the volume of import and export cargo flows rests on the throughput of the Eastern landfill, they say in Delo Group, adding that in order to export goods from the Far East, it is necessary to provide access to the railway infrastructure rationally and according to an understandable mechanism. “According to our assessment, without fair rules for coordinating transportation, as well as intensive development of the infrastructure of the Eastern Range, plans to expand and build new terminals will not bring the desired effect for the economy,” they say. FESCO notes that now there is an active discussion of the methodology for distributing priorities for the passage of container trains in the east direction (more see “Kommersant” dated August 16). “FESCO supports this initiative, however, the plan for the transportation of container trains in the direction of the Eastern polygon should be balanced with the number of the same trains that depart from the Far Eastern ports to the west of Russia,” they note.

The head of Infoline-Analytics, Mikhail Burmistrov, says that now the main obstacle holding back the growth of container traffic is infrastructure bottlenecks – border crossings to China, approaches to the ports of the Far East and the South. At the same time, he notes that in terms of parallel imports and in the consumer segment as a whole, the market is overpacked and will cool down: there was a reassessment of demand from suppliers and retailers and a favorable exchange rate, and now the change in exchange rate, as well as the tightening of the requirements of the Central Bank for consumer loans will lead to that by the end of the year market growth will slow down. Given that the situation with abandoned trains and delays in ports is not improving in terms of rail traffic, in 2024, most likely, given the high base of 2023, a decrease in the volume of imported container traffic can be expected, the expert believes.

Natalya Skorlygina