Internal Problems Create Obstacles on the Way to the Chinese Market

26 may 2017

The Analytical Center has hosted an expert meeting on the factors affecting the volatility of lead times for export cargoes, including consolidated cargoes, during which the experts discussed the administrative and legal barriers to the organization of multimodal freight, including that in consolidated containers, as well as reviewed the conditions necessary for ensuring the competitiveness of transportation terms.

Talking about the factors causing the volatility in lead times for cargoes traveling from Russia to China, the deputy head of the Analytical Center Tatiana Radchenko noted that all the efforts aimed at improving the logistical support of export deliveries to China had been approved by the first deputy Prime Minister of Russia Igor Shuvalov in April 2017. "Now we need to monitor the volatility factors 2 times a year and propose ways to reduce them," the expert said.

"One of the reasons the lead times for making deliveries across Russia increase is the restrictions on the amount of cargo that can be carried by road transport at a time and the extra time taken to transship goods from one mode of transport to another as they travel across Russia," the analyst said. As for multimodal deliveries, Russia still has a lot of non-standard documents in use here and lacks a single shipping document, Ms. Radchenko noted. There are other infrastructure problems too: cargo terminals lack equipment; the country does not have enough roads and those that it does have are of poor quality; only the country's mail service has a developed network of sorting centers. According to the expert, the requirements for the minimal load of refrigerated containers also increase lead times.

Today Russia also has problems with its port infrastructure, according to Nikolai Shapilov, CEO of LogPro LLC. "It takes about a day for goods being exported to be weighed at port and that really slows down the delivery. One reason for that is lack of port infrastructure, with many ports not having enough scales," the expert said. According to him, there are some difficulties with customs clearance too: all customs offices do not have electronic document processing capabilities. "The barrier on the road to the Chinese market is found in the country, because the conditions we have for creating competitive standards lag far behind what other countries can offer," Mr. Shapilov believes.