Russia has lost auto transportation to Europe


Ukraine and Poland have closed all land routes for delivering European goods to the Russian Federation by Russian transport, leaving ferry as the only option for the country.

On Monday February 15 Ukraine, who lost benefits from trading with Moscow starting from the New Year, banned Russian trucks from crossing its territory, following a similar decision made by the Russians.

“The only possible option for Russian trucks to get into Europe is a ferry service, or transit through Ukraine, which was carried out smoothly until recently,” – said the Russian Ministry of Transport.

On Sunday February 14 Moscow banned movement of Ukrainian trucks in response to activists’ actions in several regions of Ukraine, where they blocked Russian trucks.

Both sides said that the ban is temporary, but stressed that the decision will be canceled only after lifting of the ban by the other side.

Poland, which was previously used by a significant portion of carriers, also ordered Russian trucks to leave its territory by February 15, since an agreement with Russia on mutual granting of permits for transportation was not reached.

“After the ban on transit through these two countries, the only way for goods from the EU to get into Russia is a ferry”, – told the CEO of the carrier Rostrans Nikolai Savrukhin to Reuters.

Usual routes for moving trucks from Europe to Russia are from the German Sassnitz to the Russian Kaliningrad, or through Lithuanian Klaipeda, said a few carriers.

The New Way

Road closures in Europe will increase prices for road transport, but it is unlikely to affect consumer inflation in Russia, which has sharply reduced imports due to “sanctions war” with the West, say analysts and market participants.

In the commodity structure of imports by road from Europe, there is domination of machinery and equipment, chemicals, agricultural products and food, but sanctions and the devaluation brought down the volume of imported goods, says Olga Lapshina of Bank Saint Petersburg.

“In these circumstances we do not expect a significant impact of the Ukrainian crisis on consumer prices”, – said Lapshina.

The largest Russian retailer Magnit said that they see no problems for themselves because of the road closures after the import of Western food collapsed due to sanctions.

“We started using only European subcontractors’ vehicles. Their trucks have European license plates, so there is no problem with them. There is no too much sense in keeping our own “fleet” with current import volumes”, – told the head of Magnit’s directors board Khachatur Pombuhchan to Reuters.

At the same time the cost of goods delivery from the EU can grow, as well as the transportation time, said to Reuters the head of the Russian carrier Traverse-Auto Ilya Belov. According to him, considering the ferry, the price will increase by about 400 euro.

Ferry toll per truck starts at 500 euro, and the average cost of transportation by land is about 3.000-3.500 euros, said Savrukhin of RosTrans.

But the problem with the ferry is that it can’t serve the cargo volumes that used to pass through Ukraine and Poland, and trucks have already started lining up. Most likely the delivery will be split in 2 parts: it will be delivered all the way to the border by European carriers, and then transferred to Russian trucks, Belov said.