Market Trends of russia freight and logistics Industry
Russia’s trade with China jumped 30% in 2022 to a record USD 191 billion
- In 2021, water, air, and postal courier activities accounted for 2%, 5%, and 3%, respectively, of the transport and storage sector's GDP. However, the EU sanctions, which are directed at the Russian economy, negatively impacted Russia's ability to sustain its military operations and impact the European Union. Passenger air travel was significantly impacted by the closure of Ukrainian airspace and the sanctions imposed on Russian aircraft.
- In 2022, the manufacturing sector accounted for 14.45% of the GDP. The manufacturing industry relies heavily on transportation to acquire the necessary raw materials for its production processes. The transportation and storage sector rose by 11.22% YoY in 2022 recovering from the Russian invasion of Ukraine, which inflicted damage on transport infrastructure. In 2022, the growth in road transit volumes increased by 2.5 times and the growth in popularity in the Russian regions of the express delivery format from warehouse to door will also contribute to the development of road transportation.
- Russia’s trade with China jumped 30% in 2022 to a record USD 191 billion. Moreover, in the first six months of 2023, trade turnover in dollar terms was more than double pre-pandemic levels. RUS (a logistics company that ships cargo by rail across Russia) has boomed in 2021 and 2022. Amid a surge in trade with China, its freight volumes jumped nearly fourfold in 2022 alone. However, such a rapid increase in the volume of goods flowing between the two countries is putting pressure on Russia’s logistics and infrastructure network, which is buckling under the weight of higher demand.
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The average price of diesel in Russia during May-August 2023 was RUB 59.40 (USD 0.811)
- In September 2023, the Russian President ordered his government to make sure retail fuel prices stabilized and urged additional measures to balance the domestic market following the introduction of a ban on gasoline and diesel exports. The average price for Russian crude oil in January 2023 was USD 49.48 per barrel, down 42% from January 2022 prices. Russia issued a decree applicable from February 2023 until July 2023, which banned the sale of crude oil and finished oil products to any country or company that, directly or indirectly, referred to the price cap in the contract. The average price of diesel in Russia during May-August 2023 was RUB 59.40 (USD 0.811).
- Prices for Russian natural gas for consumers outside the CIS countries rose by 72% to USD 523.3 per 1,000 cm3 in 2022. Russia's gas exports were 10% lower in 2022, at 185 billion cm3. Russia's gas output fell to 721 billion cubic meters in 2022, down from 764 billion cubic meters in 2021. Over 70% of Russian-produced oil is exported. Around 1,100m barrels of crude oil were exported by ship in 2021 and 1,400m in 2022, with 75% leaving from western and 25% from eastern ports.
- Consumer prices for gasoline in the Russian Federation in 2021 increased by 8.84%, exceeding the rate of general inflation, which was 8.39% at the end of 2021. In December 2021, gasoline prices rose by 0.85% compared to November 2021. Diesel fuel prices increased by 1.9% in December 2021 compared to November. Prices for gas motor fuel decreased by 5.4%. The government aims to raise consumer gasoline prices within the limits of inflation, and the goal is also to be followed by gas station networks across the country. However, wholesale price growth in 2021 set new records, resulting in a yearlong disparity between wholesale and retail prices.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Russia's population density records a 66.79% gap compared to Europe in 2022 due to emigration and falling birth rates
- Growing GDP contribution by the oil and gas, mining, quarrying, and manufacturing sectors are supporting the economy
- Over 1,000 global companies curtailed their operations in 2022, which impacted the e-commerce industry
- Through export promotion measures, Russia aims to expand industrial exports to USD 150 billion by 2030
- Rising fuel prices amid the Russia-Ukraine War led to increasing truck operational costs and overall logistics costs
- Russia's Logistic Performance Index rank 88th in 2023, due to the Russia-Ukraine crisis and trade disruptions
- Road freight transportation volume is steadily increasing, with competitive pricing, expanding services, and major planned investment as major driving factors
- Russian ports expected growth in 2023 amid residual impacts and connectivity issues due to the Russia-Ukraine War and severe sea-ice conditions
- Transport costs in Russia are expected to rise in 2023, owing to increased sales and the increased price of tractors due to the weakening ruble
- Government investment in transportation infrastructure at 2.4% of GDP drives economic growth in Russia
- Russia updates manufacturing development strategy through 2035 with 4% annual average growth
- Russia-Ukraine War-related restrictions, supply disruptions, and shortages led to surged inflation
- The manufacturing industry's contribution to the GDP declined by 2.10% YoY in 2022 and is expected to recover in 2023
- Russia anticipates its share of domestic drug production to reach 42.6% by 2030 to reduce import reliance on pharmaceuticals
- Rising demand for trucks in 2022 boosted initiatives taken by companies to raise their production volumes
- Kamaz, a dominant brand in the Russian truck market, is expected to increase sales to 1,20,000 units in 2023
- Russia lost 50% of its liner services for its major ports during H1 2022 due to war with Ukraine
- Port calls witnessed a 35% decline in early 2022 due to the Russia-Ukraine War, resulting in economic sanctions and port bans
- New road and air freight routes and investment plans to develop railway routes are driving freight tonnage in Russia
