ARKHANGELSK, April 19. /TASS/. The Arkhangelsk Pulp and Paper Mill (PPM) is happy to export a certain part of its products to Chinese ports via the Northern Sea Route (NSR) if a 40-foot container's delivery cost is comparable with other logistics options and is not more than $3,000, the mill's Deputy Director General Yury Trubin told the Arctic - Regions forum.
Earlier, the mill's Director General Dmitry Zylev said that every month the plant may send to ports in the Far East and China about 600 containers via the Northern Sea Route.
"While now the cost to ship a 40-foot container to China (via other routes - TASS) is about $3,000, then we understand that if the cost is close to $3,000 or less than $2,500 - 2,700, then, probably, we will be able to ship some part of our products in containers along the Northern Sea Route," the deputy director general said at a session on using the Northern Sea Route as a transport corridor to Asian markets.
Presently, the mill uses railway services, however, at times it faces a shortage of container trains. "At different periods and months our warehouses are filled critically - up to 120% of the standard capacity. Therefore, we believe that the Northern Sea Route can become our lucky chance. Here, we have two key aspects - container shipment rates for NSR, and the second is the container base operator so that our loaded containers are sent to Southeast Asia, and somehow returned to us for loading," he said.
The cargoes that would return from Asia to Russia via the Northern Sea Route could be equipment, spare parts, consumables and chemical agents, shipped by friendly countries or as parallel imports, he added.
Northern Sea Route transportation cost
According to Vladimir Pribysh, representing the Delo Group of Companies, engaged in maritime transportation, and which is Rosatom's main logistics partner, the cost of delivering one 40-foot container from Russian northwestern ports to China via the Northern Sea Route presently is about 344,000 rubles (more than $4,000), the company's experts estimated. In the summer of 2023, Delo plans to make a test voyage along NSR from Arkhangelsk to Shanghai, where one container's delivery cost will be less than 300,000 rubles ($3,700).
"There are quite many businesses that do not have any experience of using NSR. And it is important for them to check the logistics, the cargo safety, to see how the work is organized, and they are ready to ship products at about this rate. We are deliberately making the shipment "with the negative profit." The loss is small, but it is an investment in the understanding of this route, its features, where and how it would be possible to optimize (the process)," he said.
Navigation period
During the forum's discussion, the experts stressed the current Northern Sea Route tariff is exclusive of icebreaker services, that is, the reliable navigation period is just a few months in the summer-autumn period.
"We realize that icebreaker services are very expensive. If we re-calculate the tariff adding icebreaker services, then no economy will make sense. We are talking about the season when this tariff is valid. NSR is not the only route. Businesses, surely will continue to ship containers by rail, by motor transport, keeping NSR as an alternative for difficult times (like a shortage of railway containers - TASS) to ship products at adequate costs," the panel session chair Pavel Bilibin concluded.
Northern Sea Route transportation development
According to the Ministry for Development of the Far East and Arctic, in 2022, two regular coastal voyages from St. Petersburg to Vladivostok along the Northern Sea Route transported 8,500 tons of cargo. To establish an economically reasonable tariff for transportation of containers, including refrigerated containers with fish products, along NSR, specialists used as a reference level the cost of transporting containers by rail between the Russian European part and the Far Eastern Federal District. The number of regular coastal voyages along NSR is due to double in 2023.
About forum
The Arctic - Regions business forum is a platform for operators of oil and mining projects in the Arctic, owners of cargo, fishing and icebreaker fleets, as well as for big industrial, logistics and machine-building companies. The forum's key topic was management and development of the Northern Sea Route and neighboring waters. TASS was the forum's general information partner.