RLL Container Report - 15 October 2014
From: John Keir, Ross Learmont Ltd Email: john.keir@telia.com Date: 15 October 2014
On the bonnie, bonnie banks of Loch Lomond.
Attention in the Russian container industry is currently focused on domestic terminals. TransContainer is reported to be in discussion with Globalports regarding the purchase of the latter’s Logistika Terminal located at the Shushary complex to the south of St Petersburg. Globalports acquired Logistika Terminal in 2013, when it purchased National Container Company.
Logistika Terminal operates as a ‘dry port’ serving the Bolshoi Port St Petersburg, which is Russia’s largest container terminal. In the first eight months of this year, Bolshoi Port processed over 1.5 million teu.
TransContainer already has two container terminals, Finlandski and Vitebski in the Leningrad Region but the RZD container subsidiary recognises that it will require additional terminal capacity if it is to service its expanding national chain of over 40 rail terminals. One of TransContainer’s terminals, Voskhod is conveniently located next door to Logistika Terminal. This explains why TransContainer is reputed to have tabled an immediate offer of USD 120 million, which may find favour with GlobalPorts, who already have a second, much larger container facility at nearby Yanino. The Yanino terminal has a potential capacity of 400,000 teu per annum, which is double the capacity of its Shushary facility. It would appear that this is what our American cousins refer to as a ‘win-win situation’ with both parties being happy with the deal. Of course, TransContainer may be in urgent need of the extra teu capacity, if the RZD container operator does indeed follow up the Logistika Terminal deal with the purchase of a medium-sized domestic container operator.
The strategic value of Shushary was underlined by Auchan, the giant French retailer, which announced plans to build its own multi-temperature storage facility covering 25,000 square metres. Auchan reckons it will recoup the estimated cost of USD 25 million by consolidating all its temperature-controlled goods, including alcohol, at the new, state-of-the-art facility at Shushary. TransContainer is, of course, one of the leaders in the field of the transport of temperature-controlled goods by refrigerated block trains. Also in the North West, Container Terminal St Petersburg negotiated a USD 33 million credit line with the Austrian-owned Raiffeisen Bank. This will allow the UCL terminal subsidiary to acquire additional terminal handling equipment to improve productivity. In 2013, Container Terminal St Petersburg handled just under 400,000 teu but by upgrading handling equipment the terminal could increase throughput to 650,000 teu.
At the other end of the country, a new intermodal entrant has rather taken the market by surprise. Rail Garant has decided to branch out in a new direction by forming a shipping company, which will compete with Fesco, Sakhalin and Kamchatka on the box traffic in and out of Russian Far East ports. Garant Intermodal has been set up in Vladivostok under the guidance of Dmitri Kurdakov, who until recently was working with Far East Shipping Company. Garant Intermodal reckon they will need five 600-teu vessels to operate regular services capable of taking on the established and experienced container lines. Infranews calculate that each of these container vessels costs in the region of USD 30 million and such evaluations will be reflected in the charter rates. To the small fleet of container vessels, one must add a container fleet of at least 3 - 6,000 units of varying shapes and sizes as the market requires. Of course, the most important element will be a good port or container terminal with road and rail connections in that congested city by the bay.
While Rail Garant goes about trying to set up its new service in Vladivostok, the mystery surrounding the local fish catch just seems to grow and grow. Figures released by the Far East Division of Russian Railways show that in September a total of 22.400 tons of fish were transported from cold stores in Vladivostok to the West of the country. However, this is 25% less than was shipped in the same month last year. Officials assure that there are at present 400 insulated rail wagons waiting in the Far East Region. Furthermore, the reefer stores are full to the point of bursting. And yet, the fish seem quite determined not to leave their ancestral breeding grounds and prefer instead to sit out the winter in the Vladivostok cold stores. In the first ten days of October, five reefer trains were dispatched from Vladivostok, although it would be technically possible to send a total of two such reefer trains each day. To make matters worse, the ambient temperature in Vladivostok is still well into double figures with a high of 18C forecast for the second week of October. This is not the ideal temperature to despatch hundreds of insulated wagons loaded with frozen fish at around minus 18 Celsius.
Eastern Siberian Railways reported that forestry and chemicals were being shipped in larger volumes this year, possibly because of the attractiveness of commodities denominated in Roubles. At the same time, containerised shipments of all types from Eastern Siberia were up by 207,000 tons representing a 12.9% rise compared with the same eight-month period last year. At the opposite end of the 1520 network, Latvian Railways received a Euro 17 million loan to upgrade a 52 km section of track on the main east-west corridor. When the work is completed later this year, Latvian Railways will be able to increase the annual freight turnover on the main route to the Baltic ports by 8% to 1.5 Billion tons-per-kilometre.
Please note there will be no RLL Report next week, as I shall be walking the “West Highland Way”, which links Milngavie, just outside Glasgow, to Fort William in the Highlands. It passes from the Lowlands, across the Highland Boundary Fault Line, along “the bonnie, bonnie banks of Loch Lomond” and on into the Scottish Highlands. Much of the Way follows ancient and historic routes of communication and makes use of Drove Roads, Military Roads and Disused Railway Tracks. At one point, there is even a ferry across to a local pub. This is also the land that Robert Burns, Lord Byron, Sir Walter Scott and Robert Louis Stevenson celebrated in song and verse.
John Keir, Ross Learmont Ltd.
15 October 2014
Copyright ©, 2014, John Keir