VLADIVOSTOK: Experts attending the Eastern Economic Forum, which is taking place in Russia, discussed ways to increase inter-regional cooperation in the field of logistics.
The development of traditional and new maritime and intermodal freight transport routes through the Far East, and the expansion of port infrastructure in the region are among the key priorities of the Russian government.
The forum’s venue in Vladivostok is buzzing with activities including panel discussions where top business executives, representatives from government agencies, and officials from different countries are discussing ways to boost cooperation in the field of logistics by using the latest digital technologies.
Shifting priorities
“Now the logistics chains are changing, the orientation is toward the eastern direction. In this regard, the role of the Northern Sea Route as a new additional transport artery is significantly increasing,” Haji Mohammad Huseynov, first deputy minister of the Russian Federation for the development of the Far East and the Arctic, told Arab News after a panel discussion.
The Northern Sea Route is part of a new transport corridor benefiting the socioeconomic development of the Arctic and Far East and the development of a new international route for the sustainability of global supply chains. More than 2.5 million people inhabit the Russian Arctic, and significant mineral resources are concentrated there. Backbone infrastructure is being established for this new global trade artery, the perfect logistical model linking the country’s East and West.
Experts at the forum were of the view that upgrading the infrastructure framework in the Far East creates new conditions for expanding the geography of transportation through this region and the growth of freight flows.
For example, port capacity expansion projects are being implemented in the region today, and over the past year, Russian operators have launched new logistics services from Vladivostok to China, Vietnam, and other Southeast Asian countries. With the rapid growth of cargo volumes handled by Far East ports, the digitalization of logistics to reduce clearance time is coming to the forefront, they said.
The Russian Far East has significant potential in terms of the introduction of new digital platforms and technological solutions.
Issues discussed
Experts and officials discussed a number of issues such as: How to develop in the context of global digital transformation, and what are the challenges facing players in the Russian transportation and logistics market today, given the development of land and sea trade routes? Are additional technological solutions needed in the Far East in the conditions of growing freight traffic: infrastructure development projects, introduction of new digital services, etc.? How should Russia’s transportation infrastructure develop for the purpose of implementing digital management principles in the transportation system? What government support measures are needed for the Russian transportation sector to accelerate the launch of new routes through the Far East and the development of ship repair and shipbuilding services in this region?
The Northern Sea Route
The NSR ensures Russia’s Arctic and Far East remain connected to other countries, opens up opportunities for their integration into the world trade system, and increases the sustainability of regional and global supply chains. The swift development of the NSR places the issue of Arctic shipbuilding front and center. In addition to icebreakers, the NSR will need dozens of new ice vessels of the highest class in the near future. These include tankers, bulk carriers, supply vessels, container ships, and port fleets.
The cost of implementing the plan for the development of the Northern Sea Route NSR is about 1.8 trillion rubles ($18.5 billion), of which more than 620 billion rubles have been provided from the federal budget of Russia.
Thus, the project, which was initially focused on supplying remote northern regions, and then on developing the resource base of the Arctic region, has become one of the most important for Russia. Now it is starting to solve the problem of cabotage, that is, linking the western and eastern parts of the country, which is a horizontal part of the global transport corridor.
“The (Russian) government adopted a plan for the development of the Northern Sea Route last year. It combines both obligations on the part of the state and on the part of (private) businesses. We focus on the formation of the current and prospective cargo base, ensuring the safety of navigation, building a fleet of both emergency and necessary cargo,” the Russian official told Arab News.
“Now the Russian government is guided by the fact that cargo traffic by 2024 will amount to about 80 million tons, and by 2030 it will increase to 150 million tons,” Huseynov added.
Digital solutions
Another panel session at the forum discussed how transport and logistics companies have faced new challenges in recent times as logistics flows have been redistributed, new transport corridors have been created, and existing ones have been modernized. Moreover, there is now an even greater dependency on digital solutions, which optimize all links of the transport chain and are an integral tool for the logistics industry, particularly for companies that simultaneously use multiple modes of transport, such as sea, rail, and road.
On the whole, digital solutions produce the best results in terms of the ratio of investments and the effect that is achieved. Such solutions include harmonizing multimodal electronic document management with partner countries, electronic navigation seals, and electronic queues at border crossings. These services enable companies to increase operational efficiency, and the state to control and manage supply chains, both domestically and abroad. The participants agreed on the need to improve the efficiency of digital services that ensure the seamless delivery of goods within a country and abroad, and develop electronic document management in the transport industry.
