Away from Europe: Belarus could export its goods to China via Northern Sea Route
Trying to boost freight traffic on the Northern Sea Route, Russia is attracting other countries to use this maritime corridor. For instance, China tested this way several years ago. India is planning to do this in the coming future. Soon, this list could be extended with another party concerned. As weird as it sounds but it could be Belarus that wants to reorients the logistics of its goods away from the ports on the Baltic Sea.
Russia considers the possibility to launch the regular container shipping line between Vladivostok and Saint Petersburg via the Northern Sea Route. “I would really like that, the faster the better, this Northern Sea Route, which we talk about so much, was also ever used for container shipping,” said Vladimir Putin, the President of Russia, at the Eastern Economic Forum to take place in the first days of September in Vladivostok.
According to him, the first regular shipments could start in 2022. To this end, the government will join forces with private logistics companies to upgrade the existing infrastructure, adjust joint tariffs and, of course, attract more and more volumes of freight. While Russia is just thinking about possible investments in the corridor, some other countries express their interest in establishing new supply chains by using the Northern Sea Route. One of them is Belarus.
To redirect everything
The Eastern European country, headed by the controversial president of Alexander Lukashenko, has been looking for new transport routes due to the political tensions with nearby Lithuania. Earlier, the lion’s share of the Belarusian export goods moved abroad via the Port of Klaipeda. This year Belarus started to redirect its oil export products from Klaipeda to the Russian ports of Ust-Luga and Saint Petersburg. In March the first batch of 3,600 tonnes was delivered to the Petersburg oil terminal in Saint Petersburg instead of using the transhipment facilities in the Lithuanian port. In total, almost 10 million tonnes of oil products, made in Belarus, will be rerouted from Klaipeda to the Russian harbours.
A similar fate awaits for the Belarusian fertilisers as Belarus and Lithuania have another wave in escalating their tensions. In a response to the migration policy of Belarus that stimulates illegal traffic of refugees to Lithuania, its government threatened to reduce or even stop handling the Belarusian export goods, namely fertilisers, via the Port of Klaipeda. This, in turn, caused counteraction from the Belarusian side. “Now they want to get into the head: to close the ports for us to load chemical and potash fertilisers. Listen, we will supply these volumes, load them in Murmansk, this is not a question. And via the Northern Sea Route, we will deliver by the shortest route to China, this is our main market, and to India,” Alexander Lukashenko emotionally answered to Lithuania in early August.
Possible obstacles
Someone could say that a month passed and nothing happened. The same was with oil products. Belarus and Russia needed at least six months to adjust all the issues for redirecting rail freight traffic from Klaipeda to Ust-Luga and Saint Petersburg. To arrange new supply chains via the Northern Sea Route requires much more time as it is a more complex and long-term question. Both China and Belarus tested the maritime corridor: China in 2013 and Belarus in 2020. These shipments were successful but they unveil the key obstacles for the development of the route.
The first one is the absence of regular container shipping lines. Vladimir Putin in his speech mentioned this issue. He even implies possible launching the regular services between Vladivostok and Saint Petersburg in 2022. Meanwhile, the announcement caused much more questions: why to Saint Petersburg, not Murmansk, which is more convenient; is the 2022 year real, etc. Another obstacle is the development of the port and navigation infrastructure along the route. This requires large and long-term investments. Who will do this? Government or business? The answer is still unclear. And one more issue is the transport rates. Will they be competitive to attract freight to the route? Currently, even some Russian officials admit that no and the government should subsidise this corridor. As for Belarus, this issue needs much more subsidies as its export goods must be moved to Murmansk by rail and then transhipped to the vessels. Is Russia ready to this and what can Belarus offer in return?