Tendencies in the car logistics sector of the RF. In terms of new passenger car sales, Russia takes second place in Europe (following Germany) and seventh in the world (between India and France). According to forecasts published by BDW Automotive, by 2014 Russia will become the largest car market in Europe.

1. Maritime
Tendencies in the car logistics sector of the RF
Photo: HHM
Photo: Sea Commercial Port of Ust Luga
The Russian market keeps growing
In terms of new passenger car sales, Russia takes second place in Europe (following Germany) and seventh in
the world (between India and France). According to forecasts published by BDW Automotive, by 2014 Russia
will become the largest car market in Europe.
T
he mature European market is stagnant. The new car
sales volume has been falling for almost 2 years now. The
European Automobile Manufacturers’ Association announced that in QII 2013 nearly 6.5 mln new cars were
sold in Europe (EU-27 + EFTA), which constitutes a 6.7% yearon-year decrease. In Russia, on the other hand, according to PricewaterhouseCoopers (PwC), the market has now entered a path of
constant, moderate growth, after several years of strong volatility. The main negative factors affecting the Russian market are
rather of a short-term nature; positive factors, on the contrary,
can be observed in the long-term. These include a low motorization rate with a high potential for growth, a high average growth
of the automobile fleet with an increasing substitution rate, relatively stable oil prices, as well as foreign automobile manufacturers’ investments in production arrangements on the territory of
Russia. Therefore, regardless of the instability anticipated in the
forthcoming years, passenger car sales are expected to grow in the
long run. PwC estimates the Russian market volume to reach 3.7
mln by 2025 while, according to ASM Holding, this is going to
range between 3.2 and 3.7 mln per annum. On the other hand,
both MIP, a Russian consultancy providing analysis of automotive
market, and Rolf Group, Russia’s major car seller, forecast sales to
hit 3.2 mln already by 2015.
The evolution of automobile logistics in Russia
The sector of automobile logistics in Russia reflects the automotive market demand. In the period between 1998 and 2012, the
country’s market of new cars (and of automobile logistics) experienced significant ups and downs, its dynamics of growth showing
several distinct stages.
By the beginning of the 2000s, the market of new passenger cars
in the RF was relatively stable, with annual sales close to 1 million
vehicles, with Russian brands accounting for some 90%.
30 | Baltic Transport Journal | 4/2013
The period between 2002 and 2008 witnessed significant growth
with a snowballing increase from 2005 on, by 20-30% yoy. The peak
with 2.75 mln vehicles sold was recorded in 2008. This was also
when the supply of Russian-made cars began decreasing, giving way
to local production of foreign brands in the RF. The most spectacular growth, however, was observed in the imports volume – increasing more than 10 times. Existing transport infrastructure turned out
to be far too insufficient to handle such high traffic.
The explosion of imports noted in the years 2004-2008 was even
greater than the sales growth, owing to used cars imports. The peak
volume of 1.9 mln imported vehicles was observed in 2008. Within
a 5-year period imports increased by four times, leading to deficiency of such transport infrastructure facilities as sea terminals, the
fleet of road and rail car transporters and autoracks.
The first batches of new cars imported via Baltic ports arrived
in December 2006, initially – to jetties and yards of the Port of St.
Petersburg adapted for the new purposes. Both in the Petrolesport
complex in Saint Petersburg and in the Yug-2 terminal in Ust-Luga,
transhipment of cars commenced in 2008.
In 2009, the financial recession reduced the volume of cars sold
in the RF by half. The segment of foreign brands manufactured in
Russia suffered less, dropping 38%, while imports fell by 57%. Batches were held in European terminals – vehicles were not brought to
the RF territory in order to avoid paying import customs. Furthermore, delivery routes have been changing (e.g. a new transit yard
was built at Sillamäe), new land terminals have been constructed.
The fleet of car transporters has been reduced on a mass scale.
Since mid-2010, the market has begun recovering, firstly
owing to the growing sales of vehicles manufactured in Russia
(both domestic and foreign brands). The fleet of road and rail car
transporters is deficient again. Nevertheless, the rate of market
growth (with the exclusion of the low base effect of 2009) still
remains below the pre-recession levels.

2. Maritime
The significant growth in demand for cars, public programmes intended to stimulate the market, as well as automakers’ investments in new production capacities resulted in a considerable increase in output.
In 2011, the production of passenger cars increased by 45%
against the 2010 volume, exceeding 1.7 mln. In 2012, the output
was higher than 2 mln vehicles. The production volume which was
reached is an absolute, historical maximum.
Fig. 1. Russian passenger car market in the years 1998-2012
venture named Alliance Rostec Auto BV. The new company is expected to supply up to 1 mln of Lada, Renault and Nissan cars per year until
2020. Production of Nissan Almera cars has already commenced.
The list of car models manufactured by foreign automakers in Russia is getting longer almost every month. Their market share is constantly growing too. New plants are also being built in the RF’s Far East.
Nevertheless, the growth of domestic production is accompanied by stabilization of the sales level. In 2011, the Russian automobile market expanded by 39%, up to 2.65 mln of passenger and light
commercial vehicles. November 2012 was the first month in almost
two years with stagnation in car sales. Thereafter, following some
minor fluctuations, the sales volume regained the level of 2011.
Fig. 3. Dynamics of passenger cars and light commercial vehicle sales in
Russia, in thou. units
Fig. 2. Dynamics of passenger car imports to Russia in the years 1994-2012
Domestic production growing, sales and imports slowing down
In February 2011, new regulations governing the operation of
foreign automakers in Russia were enacted.
The document allows manufacturers to import car components
at very low or no customs duty rates but, in exchange, it requires
them to start an annual throughput capacity of 300-350 thou. vehicles, with a 60% rate of manufacturing localization (until 2018) and
to invest in research and development.
The semi knocked-down is limited to 5% of the total output and
cannot last longer than two years.
The new restrictions on the industrial assembly of cars force foreign manufacturers to increase their production volumes. With the
existing capacities, automobile plants are already able to exceed 1.5
mln foreign brand vehicles per year and automotive companies are
planning to further increase their manufacturing capacities.
The far-progressed process of manufacturing localization has
given rise to the development of automotive components production in the country. For example, Volkswagen Group is building a
factory in Kaluga Oblast, not far away from an existing car assembly
plant belonging to the company.
A Canadian automotive supplier, Magna International Inc., is
planning to build an industrial complex with a capacity of 250 thou.
vehicles in Kaliningrad Oblast.
In December 2012, the Renault-Nissan Alliance signed an agreement with the state-owned corporation Rostechnology to set up a joint
Irrespective of the growing production, passenger car imports can
be expected to remain substantial – up to 25%-30% of the sales volume
or, depending on the sales forecast, from 800 to 900 thou. vehicles.
This is owing to the wide range of models offered by manufacturers: models not manufactured in the RF will be imported.
Furthermore, imports can be stimulated by the expected customs duty reduction (from 30% to 15%) in 2019, due to Russia’s
accession to the WTO.
Changes in the geographical makeup of production lead to
changes in logistics
The growth in local production is followed by greater demand
for internal transportation. Moscow and St. Petersburg are reaching stabilization in terms of demand for vehicles and any further
growth will be due to the motorization rate growth in the regions.
This will also lead to the development of transport.
The domestic transport market determines prices of logistics
services – while earlier domestic prices were “adjusted” to the reference cost of delivery from a Finnish port, now it is often the other
way round: prices of import logistics are set based on domestic
transport tariffs. Despite this, with an insufficient fleet of car transporters and specialised rolling stock, seaports and inland shippers
are competing for transport providers.
Automobile plants in Central and Eastern Europe are mostly
export-oriented. In the period from 1997 to 2012, the total output
of passenger cars in the three countries most distant from seaports
– Hungary, Slovakia and the Czech Republic – increased from 438.3
thou. to 2,287.2 thou. vehicles, i.e. more than five times. Export
from these regions enters Russia via land border crossings.
With new assembly plants opened in south-eastern Europe and in
Turkey, a southern sea entrance is needed. Since 1997, the output of cars
in Turkey has nearly doubled: from 242.8 thou. to 576.6 thou. passenger
cars (in 2011, 639.7 thou. vehicles were produced). Short-term goals of
the Turkish automotive industry include achieving an annual output of
2 mln motor cars, 1.5 mln out of this volume to be exported. Moreover,
Turkey is planning to deliver 4 mln vehicles per year by 2020, with exports at a level of 3 mln. Russia is considered to become one of the target
markets, with an export volume between 30 to 60 thou. cars.
4/2013 | Baltic Transport Journal | 31

3. Maritime
In Romania, the annual output of passenger cars increased nearly
three times within 15 years (109.2 thou. in 1998 and 326.6 thou. in
2012). In addition to local brands, Renault, Ford, Hyundai are produced here. More than 90% of this production volume is exported.
Also, Asian producers are considering the possibility of using
Black Sea routes to import cars, bearing in mind the shorter freight
distance and the vicinity of some regional sales markets in the RF.
The need for automobile cargo handling facilities in Black Sea ports
has rapidly grown owing to the development of the export-oriented production in Turkey. In addition to automobile handling at “NUTEP” terminal in Novorossiysk (46.8 thou. cars in 2012) two new terminals have
been launched in this port. One was commissioned at September 2013
by Delo Group in partnership with Rolf SCS. This terminal is capable of
handling 50-70 thou. cars per annum and has parking space for 1,565
cars. Another project was announced in 2013 by NCSP Group in partnership with GEFCO. New cars are handled at berths of Novorossiysk
Ship-Repair Yard. It is planned to receive about 30 thou. cars annually.
Baltic ports more attractive
With the current level of prices, Baltic ports are the most attractive for the importation of cars manufactured in Asia. Economy of
time and, consequently, inventory cost, namely the cost of resources withdrawn from operation in the period when a vehicle has left
the manufacturer, but has not yet been sold and is on its way. This is
the only advantage of Far Eastern ports.
Furthermore, one should be aware of the Far Eastern delivery
channel’s limited throughput capacity, which is determined by the
existing supply of the rolling stock required by manufacturers. This
is coupled by railway transportation security problems, including
thievery and mechanical damage.
Car exports in recent years from the EU to the RF reached some
500 thou. vehicles, with a major part of this volume coming via Baltic ports or land routes, due to the geographic structure of the automotive industry in Western Europe. Ports of the Far East mainly
specialize in handling used cars and not all terminals are capable of
receiving new vehicles as, in this case, requirements concerning the
standard of services and facilities are essentially different.
Fig. 4. Automobile plants in Europe
Terminals’ cargo handling capacities are concentrated in UstLuga and in the Big Port Saint Petersburg. Currently, a tendency is
observed to build state-of-the-art terminals. There are two terminals in the Port of Ust-Luga: Yug-2 and Novaya Gavan.
Yug-2 car terminal, with its annual turnover capacity of 500
thou. vehicles, comprises three berths designed to receive PCC &
PCTC vessels with a draft from 8.8 to 11.0 m and straight stern
ramps. The berths are capable of accepting direct deep-sea calls
32 | Baltic Transport Journal | 4/2013
from Japan and Korea. Currently, Yug-2 is the most modern, stateof-the-art, multi-purpose terminal on the RF territory, with finetuned production processes, an IT-system, qualified staff and experienced management. This is the only operational sea terminal
where the owner and the operator is the same.
In November 2012, the Russian Transport Lines group inaugurated Novaya Gavan car terminal in Ust-Luga, with an initial annual throughput capacity of 250 thou. vehicles. Currently, Novaya
Gavan covers an area of 64.87 ha of land but can be extended up to
193.12 ha. The storage yard offers 4,590 parking lots (the designed
target capacity being 19,290 vehicles). The first berth is capable of
unloading ro-ro vessels with side and rear ramps (mark of dredging – 9.4 m, berth wall length – 150 m). In 2013, another berth is
planned to be launched (9.6 m of depth). As of today, the terminal
is capable of handling vessels up to 2,000 CEU.
Completion of the third stage of Novaya Gavan terminal’s development is planned for the year 2014. With a 12 m berth wall,
the terminal will be capable of accepting ocean-going vessels (up to
5,500 CEU).
The Big Port of Saint Petersburg was Russia’s first Baltic seaport
to offer automotive transhipment services. Currently, there are four
car terminals there, with another ro-ro facility in progress).
The Petrolesport car terminal is controlled by Rolf SCS, a member of Rolf Group (a Mitsubishi importer and auto dealer for many
other car brands). The contract with Petrolesport will expire in
2016. Petrolesport’s ro-ro terminal is capable of handling up to 190
thou. passenger cars and 40 thou. other ro-ro cargo units per year.
Two berths are fitted with unloading facilities for ro-ro vessels with
straight stern ramps: berth No. 46/47: length – 323.13 m, depth –
12.07 m; berth No. 60: length – 160.9 m, depth – 7.58 m.
In early 2009, the first stage of a ro-ro terminal development
project was completed by Perstiko (incorporated in Sea Port of
Saint-Petersburg, a large stevedoring company in the Big port of
saint-Petersburg) in the area of berths 36-37 (annual transhipment
capacity of 790 thou. tn). Terminal facilities are capable of handling
all types of ro-ro cargo, sometimes receiving car shipments (Seat,
Fiat LCV, etc.). Ro-ro vessels are unloaded at berth Nos. 36-37 (vessels with stern and side unloading facilities, ramp width – 30 m)
and berth Nos. 17-19 (side ramps), depth range from 9.6 tо 11.0 m.
Another car terminal is located on the berths of the former Third
Stevedoring Company, which is now a part of Sea Port of SaintPetersburg. The terminal operated by BLG Logistics was opened in
2008, its annual throughput capacity reaches 80 thou. cars. Berth
No. 67 (162 m long, 7.6 m deep) is capable of receiving vessels with
quarter, side or slewing stern ramps.
Russian Transport Lines operates a terminal created on the basis of the Sea Fishery Port “Morskoy Rybnyi Port” and Onega terminal – 160 m2. The terminal is capable of receiving ro-ro vessels
with various unloading ramp types, including straight stern facilities. Cars are unloaded in berth Nos. 1-2 with a total length of 257.5
m and depths ranging from 7.6 to 8.9 m.
A new terminal is being constructed by Fenix, a Forum Industrial Group member in the Port of Bronka (a new district of Big
Port of Saint-Petersburg). Terminal commissioning is planned for
the years 2013-2015. The 27.1 ha terminal, with a designed capacity of 260 thou. units (150 thou. units – imports, 110 thou. units
– exports) per annum, will be capable of receiving ro-ro vessels
with a straight stern ramp and other types of unloading facilities.
The technical feasibility of a 2-level loading/unloading operation
is being considered.
‚
Olga Gopkalo, Alexander Goloviznin