RLL Container Report - 09 July 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 09 July 2014
All roads lead to Primorye.
Container trades from Asia to the other continents have long dominated the intermodal league tables. Now, we are beginning to see the emergence of intra-Asian box traffic as a major force in its own right. Last year, traffic rose by nine percent to register 7.2 million teu. This is half a million more teu than was shipped on the main trade routes between Europe to North America. New terminal developments in the Russian Far East could add considerably to the volume of box traffic circulating within Asia.
No less than three new transport corridors are being discussed in Primorye - referred to as Primorye 1, 2 and 3. The first would connect N E China via Ussuriysk with the existing container terminals in Vladivostok, Vostochny and Nakhodka. The second Primorye link goes from N E China to the proposed container terminals to be built in Zarubino, Slavyanka and possibly also in Posyet. The third option now being examined, Primorye 3, would take a shorter and more direct route from N E China straight to the existing terminals in and around the Port of Vladivostok. The major advantage for Chinese shippers is the relative proximity of all the proposed ports to the Chinese rail network: the closest is less than 100 km as the crow flies. It might,therefore, make sense to construct a standard or a dual-gauge line all the way from the Chinese border to the Primorsk ports.
Container traffic via the traditional Russian Far East terminals grew by 7.1% in the first five months of the year. The Port of Vladivostok led the field with 330,800 teu, an improvement of 7.5%. Vostochny continues to catch up with their local rivals by recording a total throughput of 202,400 teu, which represents a rise of 9.1% on last year’s total. If we project the current figures through to the end of the year, we arrive at a combined total of almost 1.5 million teu for the terminals around Vladivostok and Vostochny. Coincidentally, this is the cargo volume indicated for each of the two container terminals in the Primorye 2 proposal. Clearly, the proposed terminals would be far larger than their rivals up the coast in Vladivostok and Vostochny.
Proposal No 3 appears to have all the hallmarks of a hastily drawn-up political compromise that tries to combine the best elements of the first two proposals. This variant proposes a shorter and more direct from the Chinese border to Vladivostok with the added inducement of a dry port at Tavrichanka to the north of Vladivostok. It is suggested that this dry port could attract up to 100 industrial enterprises and could at the same time act as an interim holding facility for the crowded city-centre container terminals.
Whichever proposal is selected, it is clear even at this early stage that the volumes of containerised cargo will be large. More importantly, the vast majority of cargo will in effect be moving on a domestic move from North East Chia via Primorye to South East China. Currently, Chinese seaports are experiencing a sharp rise in container throughput and would be hard-pressed to cope with a sudden injection of cargo from N E China. In the first five months of the year, container traffic at the Port of Nantong rose by 17.1% to 267,900 teu. The neighbouring Port of Ningbo clocked up an even more impressive 20% increase in the first five months, when 7.6 million teu passed through its gates.
Most of the cargo moving from N.E. China will be in the form of agricultural goods. These will be transported by container, as this is the quickest, most efficient and cost-effective method of moving such large volumes on two different rail gauges. Another important consideration weighing heavily in favour of an intermodal solution is proposed legislation to be introduced in Russian ports, which will affect the storage of bulk cargoes on quaysides close to existing urban settlements. Although targeted primarily at such dirty cargoes as coal and sand, the new legislation will place restrictions on the storage and handling of all bulk cargoes, including agricultural products. The simple solution in the case of agricultural products is either to bag the cargo or ship it in a bulk container.
To the proposed flows of agricultural cargoes from N E China, one must also add large volumes of farm produce to be shipped from the Amur River valley to Japan and Korea. Japanese experts have been testing various crops along the fertile banks of the Amur and large-scale farming is due to commence around the same time as the proposed shipments from N E China. There will, therefore, be a great deal of containerised agricultural products flowing towards the ports of Primorye.
Further upstream on the Amur, Russia and China have agreed plans to construct a bridge over the Amur River between Blagoveshchensk and Heyke in Heilongjian Provice. Design work on the bridge is due to be completed in 2015, after which construction will begin in earnest. The bridge will provide a vital link not only to the Transiberian Railway but also to its sister, the Baikal Amur Mainline. Equally importantly, the Blagoveshchensk river crossing lies almost directly south of the Yakutsk railway that will shortly arrive at Nizhny Bestyakh on the oppositite bank of the river Lena from Yakutsk. The latest report indicates that the line from Tommot should be opened by November of this year. The new Amur bridge will, therefore, provide a very convenient conduit for containerised and bulk cargoes originating in Western Russia, Siberia and the mineral-rich lands of Yakutia to China - in addition to the traditional routes to Primorye.
“Mille viae ducunt homines per saecula Primorskam” - All roads lead to Primorye.
John Keir, Ross Learmont Ltd.
09 July 2014
Copyright ©, 2014, John Keir