China is selling so much to Russia that containers are piling up
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A commercial port in Vladivostok, Russia, in August. Trade between Russia and China jumped 37 per cent in the first seven months of 2023.
PHOTO: REUTERS
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LONDON - Russia currently has 150,000 excess shipping containers that rail depots are struggling to manage, reflecting a surge in Chinese goods flowing into the country but much less goods moving out.
This is according to an analysis published on Thursday by Container xChange, a Germany-based trading platform.
“There is significant cargo movement from China into Russia, but very scarce movement back to China from Russia,” Mr Christian Roeloffs, co-founder and chief executive of Container xChange, said in the report.
This has a “tremendously detrimental impact on the business of container logistics because of the high imbalance of demand and supply”.
Three years ago, a line of cargo ships formed off the coast of Los Angeles, carrying an unprecedented wave of imports for American consumers to ride out the Covid-19 pandemic and symbolising the warped shape of the global economy.
The pile-up in Russia, however, is more closely tied to geoeconomics.
Although Russia has endured sanctions from Western economies since its invasion of Ukraine,
The result: a collapse in the secondary market for containers in Moscow; they are going for less than half the price elsewhere in the world.
The average price for a used 40-foot “high cube” container – those with a little more capacity than a regular 40-foot box – has plunged to US$580 as at this week in the city, from US$4,175 in February 2022.
For new containers, the price has fallen to US$1,450 from US$4,309 before Russia’s invasion of Ukraine, according to Container xChange’s data.
Trade jump
Trade between the two countries jumped 37 per cent in the first seven months of 2023, reaching US$134.1 billion, Container xChange said, citing Chinese Customs data.
China’s exports to Russia surged by 73 per cent, reaching approximately US$62.54 billion, while imports from Russia grew 15 per cent to US$71.6 billion.
The bilateral commercial ties are only getting tighter, if recent deals are any indication. On Monday, the China Nonferrous Metals Industry Association signed a memorandum of understanding with the Russian Aluminium Association in Beijing, saying the aim was to collaborate more closely on alumina, aluminium fabrication and aluminium products.
Earlier in September, Fesco Transport Group – one of Russia’s biggest logistics providers – signed agreements with Jilin Northeast Asia Railway Group and the Union of Chinese Entrepreneurs.
“The parties plan to monitor existing container shipping routes between Russia and China and jointly expand the pool of potential shippers in the China-Russia-China direction,” said Fesco.
The Kiel Trade Indicator in September noted that Russian port activity had recovered close to levels before the war in Ukraine. BLOOMBERG
