Russia’s Transport & Logistics Trends For 2023

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By Mark Veshnyakov, Asia Import Group  

In 2022, the Eurasian logistics services market was adjusting to the new conditions. Many of the usual routes for cargo transportation from abroad to Russia had to be set aside, and there were problems with paying for supplies from Europe. Major players such as TNT, FedEx, UPS, MSC, Maersk and others left Russia. This is only a small part of the difficulties that logisticians had to face.

Of course, by the end of the year, the situation began to improve; suppliers revised many aspects of their work and changed delivery routes.

Turkiye has become a real hub for cargo transportation this year. Kyrgyzstan is now also helping Russia with deliveries from abroad, which is actively involved in foreign economic activity with European countries. Kazakhstan helped to partially solve the problem with transportation from the EU. Interestingly, Iran has also entered the game. Thus, the number of ways to send goods to Russia is increasing, most of them go through eastern countries.

In 2023, these states will continue to actively help Russia with the transportation of goods, including through parallel imports, which will gain momentum. Most likely, the flow of goods through Iran and Turkiye, which are ready to more actively conduct business with Russia and will increase significantly.

The growth of trade between Russia and the UAE will also continue. It is rapidly developing due to the increase in the supply of cars of foreign brands to Russia by the United Arab Emirates through parallel imports. Logistics companies are increasingly being asked to help import new models of Land Rover, Toyota, Nissan, Kia through the UAE. Less often – German cars.

The problem of suspension by large foreign carriers of their activities in Russia was also solved. Their work has been taken over by smaller, less well-known companies, including many Chinese organizations. They will also continue to actively help with cargo transportation in 2023.

China is gradually but surely becoming Russia’s main trading partner. It not only increases the supply of its own products, but also transports goods from other countries due to the impossibility of sending them directly. It is likely that next year cooperation in this direction will only increase. In particular, many well-known foreign carriers who left Russia will continue to deliver goods to China, where the containers will be repacked and sent on to Russia.

Next year Moscow has planned to focus on the production economy, that is, on the manufacture of domestic products for the domestic market and for export. But in factories, plants may not have enough equipment, production machines for the production of new goods. Such equipment is often supplied from abroad. Therefore, I would venture to suggest that in 2023 the volume of imports of such goods into Russia will increase significantly. Such deliveries can come, in particular, from China and Turkiye.

Moreover, we will probably pay for them with cryptocurrency. If this method of payment for imported products is legalized, as promised in the State Duma. This will help simplify transactions with foreign counterparties in the current realities, solve many problems, because now there are still very few Russian banks that have the right to make settlements in US and European currencies – many credit institutions are subject to sanctions.

In order for transactions with digital money to pass without problems and legally, it is necessary to develop a payment mechanism. Now, when any product is delivered to Russia, the funds for their transportation are withdrawn from the bank account, then a customs declaration is drawn up, and the customs office transfers information about the transported cargo to the tax authorities. For settlements in cryptocurrency, such a mechanism is not suitable, since the circulation of digital assets is not related to the banking movement of funds. Therefore, in Russia, a certain regulator must first appear, which could confirm the implementation of payments in digital currency.

In general, the trends in the logistics market that emerged in 2022 will, for the most part, continue into the next one. Although it is rather difficult to predict anything now. Perhaps, already in the middle of next year, all the forecasts made today will seem something strange and unrealistic.

This article was written by Mark Veshnyakov, the commercial director of the transport and logistics company Asia Import Group. It has been edited and translated into English. The original appeared in Russian on the Investia News Portal.   

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