In 2023, road transportation in Russia increased, export directions changed

Russian road transport showed growth in 2023, primarily in domestic traffic. On international routes, the situation is changing: the rapid rise in trade with Georgia and Armenia in 2022 has slowed down, communication with Kazakhstan has become more complicated, and has picked up with other countries of Central Asia. Belarus remains the leader in external transportation, but connections with China are growing threefold. Market participants predict further strengthening of this area against the backdrop of a general rise in road transport prices.

Road transportation continued to grow in 2023, market participants say. The driver was an internal message. According to the freight exchange ATI.SU, the number of applications for transportation within the Russian Federation increased by one and a half times, although by the end of the year the dynamics slowed down, amounting to only 29% in the fourth quarter. “From a geographic point of view (excluding new regions), we are seeing fairly uniform growth,” ATI.SU clarified.

“In 2022, the demand for international, and primarily import, transportation grew, as European cargo was being replaced by other destinations, mainly Central Asia and the Transcaucasian countries,” notes the founder and director of ATI.SU Svyatoslav Vilde. “Now the main driver is domestic transportation, which is largely due to import substitution.”

Deputy General Director for Development of the Business Lines Group of Companies Dmitry Khrushchalev also sees increased demand for domestic cargo transportation: “Delivery of groupage cargo increased by 22% in nine months. Firstly, marketplaces and e-commerce are actively developing – we are seeing a twofold increase in transportation volumes to distribution centers. Secondly, Russian industry is increasing its momentum and needs prompt delivery throughout the country.”

Delivery to retail chains is another dynamic area, says Mr. Khrushchalev, the volume of transportation to retail outlets increased by 26% year on year. “In the express delivery market, we are seeing an increase in demand by 45%, cargo turnover by 63%,” he clarifies. “Almost half of inter-terminal transportation clients now order transportation from the warehouse to the address.”

According to Delko General Director Sanjar Ashuraliev, in the domestic market “a decrease in the total number of transport can be traced and with an increase in the number of flights.”

“There was an increased demand for long-distance transportation,” explains Mr. Ashuraliev. “At the same time, retailers began to actively develop their fleets.” On the domestic market, cargo transportation to the south has increased: to the Krasnodar and Stavropol territories, the republics of the North Caucasus: the top products include fruits, vegetables, mineral water, and food products. The delivery of household appliances is growing.

“As a trend, it is interesting to note a decrease in cargo traffic from Moscow to the regions,” emphasizes Ali Gabidulin, head of the domestic land transportation department at Noytech Supply Chain Solutions. “At the same time, the share of interregional transportation from the Urals to the Far East and back is increasing, which is primarily due to the increase in the volume of cargo transportation from China”.

DPD Marketing Director in Russia Alexey Merzlyakov says that in the B2B segment, the top 5 industries with the greatest demand for transportation include online stores, jewelry, telecommunications and IT, electronics and household appliances. The top 5 regions receiving DPD parcels during 2023 have not changed – these are Moscow, St. Petersburg, Sverdlovsk and Novosibirsk regions, Krasnodar Territory. “Marketplaces have taken a huge market share and have greatly advanced many players in the online trading market, especially small ones,” he says. “A feature of 2023 was the growth of the market share of Russian companies in the e-commerce segment. This can be seen most clearly in the fashion segment.”

SDEK cites blocked roads and bad weather as the main problem of the industry, which often forces the use of more transport, reduces timeliness and increases costs. They say the same thing at Pony Express. Both companies noted increased, rather than slower, dynamics in the fourth quarter.

At the same time, some operators consider the growth in cargo transportation to be “partly artificial.” Thus, according to Artem Vaskanyan, Deputy General Director for Logistics and IT at NC Logistic, an increase in the number of search queries may indicate not an increase in demand, but an instability in cargo flow: “What was previously transported by one truck is now sent by two or three. Due to the fragmentation of supply chains by manufacturers, holders of contracts for the supply of certain products often do not receive the entire shipment of goods at once. The delivery time to customers and the number of vehicles are increasing.” Staggering peak loads coupled with disrupted supply chains “create what we call pseudo-growth,” he says.

Between China and Belarus

International destinations show more moderate growth – especially in terms of imports, note ATI.SU: by 21% in general and 6% in import traffic. In terms of dynamics, China came out on top: the number of applications for transportation there tripled, ATI.SU notes, and back – 88%. “In principle, the delivery of goods from China by road to most Russian regions is considered not very profitable,” says Svyatoslav Vilde. “But at the moment, the growth of trade turnover with China is so rapid that water and rail transport cannot fully cope.”

Dmitry Khrushchalev confirms that China has become one of the main destinations in international road transportation, and at the end of the year, the demand for cargo delivery between countries has more than tripled. Sanjar Ashuraliev explains that cargo transportation to and from China includes consumer goods and equipment. “In addition, in 2023, customs restrictions on the supply of fruits from China were lifted, which resulted in an increase in the number of orders for refrigerated transportation,” he clarifies.

“The infrastructure along the route is improving,” says Evgeny Dyatlov, head of the procurement department for international transportation at FM Logistic in Russia. “Reconstruction of the checkpoint in Zabaikalsk is planned for 2024–2026. The planned increase in throughput by 5.5 times confirms the prospects for cooperation and intentions to increase cargo flow.”

Belarus remains the leader in absolute volumes of international road transport. ATI.SU notes an increase in applications in export traffic by 48%, in import traffic by 41%. Kazakhstan, according to the exchange, with an increase in export traffic by 54%, showed a decrease in imports by 3%. Dmitry Khrushchalev speaks of a 13% drop in communication between countries: “One of the limiting factors was the new requirements for documentation on the part of Kazakhstan.”

At the same time, other countries of Central Asia, according to ATI.SU, show an increase of more than 50%. The head of the forwarding department of the Stalogistic department of complete cargo, Vlad Vorobyov, speaks about the growth of complete transportation from Uzbekistan by more than ten times: “Indicators of export deliveries from Uzbekistan to the EU clearly reflected the trend of European business searching for a replacement for Russian products and reorienting to trade with the regions of Central Asia.”

At the same time, communications with the Transcaucasus – Georgia and Armenia, which skyrocketed in 2022 – have stabilized or even begun to decline. At ATI.SU, the number of applications for transportation to Georgia did not change, Armenia showed a decrease of 19%, and in the opposite direction the drop was 41% and 64%, respectively. “Here, we believe, the limited capacity of the Georgian Military Road is reflected – long waiting times reduce the popularity of the route,” ATI.SU notes. “Perhaps the situation will improve after the reconstruction of the Verkhny Lars checkpoint and the construction of a new road in Georgia.”

Cargo transportation from Armenia and Georgia is decreasing, Pony Express confirms. At the same time, Vlad Vorobyov notes the growth of cargo transportation with Armenia and Georgia in certain product segments: “There is significant demand for deliveries of alcoholic and food products from this region due to the complication of delivery of these goods from EU countries.”

Dear road

In 2024, the volume of domestic transportation is expected to increase, says Ali Gabidulin, but the problem with the shortage of drivers remains, which will be relevant in 2023. “The shortage of personnel will continue to have a significant impact on trucking rates,” he notes. Svyatoslav Vilde emphasizes that the shortage of truck drivers is becoming the main problem (in general, about the shortage of personnel in logistics, see Kommersant on January 22). Prices, according to ATI.SU observations, increased by 27.9% over the year as of January 10.

Obviously, says Ali Gabidulin, there will be an increase in the volume of cargo transportation from China by land transport, including full trucks (FTL), modular trucks (LTL) and oversized cargo: “The range of cargo transported is quite wide, includes FMCG goods and high-tech equipment, and raw materials for chemical, food and medical industries.” In his opinion, problems with the passage of ships through the Red Sea and the Suez Canal could shift the focus to land transportation from China and Southeast Asia. Freight traffic from European countries to Russia is likely to remain at the 2023 level.

Natalya Skorlygina