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Booming Russia-China Trade Causes Container Pileup

Analysis has revealed that a surplus of shipping containers from China is accumulating in Russia due to the burgeoning flow of Chinese goods into the country as trade between the two nations continues to surge.

According to a logistics platform Container xChange report released on Thursday, Russia has over 150,000 shipping containers, causing importers to rush to return them to China. This situation has led to significantly low secondhand container prices in Russia, as CEO Christian Roeloffs noted in the report.

China has become a crucial economic partner for Russia after it invaded Ukraine, as the United States and its allies implemented trade restrictions and sanctions to hinder the Kremlin’s war efforts. Despite asserting its neutrality and a desire for peace in Ukraine, Chinese leaders view Moscow as a strategic ally and a counterbalance to the West. China has criticized Western sanctions against Russia while increasing its purchases of Russian energy and becoming a critical supplier of consumer goods to the Russian market.

The container surplus and the resulting seven-fold decrease in the price of 40-foot containers since early last year are attributed to the growing trade imbalance between Russia and China regarding the types of products transported in containers, according to Container xChange.

Also Read: Putin Meets Top Wagner Commander Troshev to Discuss Ukraine War

In the first eight months of 2023, bilateral trade between Russia and China increased by 32% compared to the same period the previous year, reaching a total trade volume of $155 billion, as reported by Chinese customs data released earlier in the month. This surge included a 63.2% increase in exports from China to Russia, reaching $71.8 billion, while imports into China rose more modestly by 13.3% to $83.3 billion.

Russia has anticipated that its trade with China will reach a record $200 billion this year, ahead of the schedule set by President Vladimir Putin and Chinese leader Xi Jinping in 2019. This growing trade partnership has redirected Russian energy trade eastward, leading to criticism that China’s economic support indirectly supports Russia’s actions in Ukraine.

Container xChange’s report also highlighted that the surplus of shipping containers in Russia is partially due to the type of goods exchanged. China primarily purchases Russian raw materials transported via rail tanks and open wagons rather than containers. Meanwhile, Chinese suppliers are selling key products like cars and consumer electronics to Russia, filling the void left by the departure of many global brands from the Russian market following the invasion of Ukraine.

Furthermore, the report pointed out broader logistical challenges tied to shifting trade patterns and congestion, with overloaded Russian ports and roads causing transportation inefficiencies. Although some infrastructure investments have been made to improve the situation, fiscal constraints and budget shortfalls complicate matters. The report emphasized that Russia’s pivot to Asia relies on substantial infrastructure development.

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