BRIDGING CONTINENTS—RUSSIA’S LOGISTICS

Vasilii Iankov,
IOEC Vice President for International Logistics,Founder of Iankov & Partners LLC

Russia’s Role in International Trade
Boasting the world’s largest territory and vast natural resources, Russia plays a pivotal role in international trade. Nestled at the crossroads of Europe and Asia, coupled with untapped potential in energy, agriculture, and industry, it is a key player in the world economy. Amidst a shifting global economic and geopolitical landscape, the country demonstrates an ability to adapt and seize new opportunities to strengthen its foothold in global trade. Russia is actively developing trade relations not only with traditional partners, but also steadily expanding into new markets across Asia, Africa, and the Middle East, diversifying its economic ties and reducing its dependence on certain regions. Russia also continues to bolster its competitive edge, e.g. the export of energy, grain, fertilisers, and high-tech products, making it a vital participant in global supply chains.

Supply Chains and Geography
In Russia, the primary import-export chains traditionally include sea and air routes, railways, and highways. Key ports in the Baltic (St. Petersburg, Ust-Luga), the Black Sea (Novorossiysk, Tuapse), and the Far East (Vladivostok, Nakhodka) handle a significant part of exports in energy, grain, and other goods. Rail transport, particularly the Trans-Siberian Railway, remains a crucial freight route across Europe and Asia. In recent years, Russia has been extensively developing new routes, such as the Northern Sea Route, which is becoming increasingly viable due to climate change and reduced delivery times.

Also, the international transport corridors like the “North- South” route, bridging Russia, India, Iran, and the Gulf countries via the Caspian Sea, are gaining importance. Amidst shifting geopolitical dynamics, Russia is also actively redirecting its logistics flows, increasing cargo traffic with China, Türkiye, Cen-tral Asia, and the Middle East. Transit goods crossing Russia play a vital role in strengthening its foothold as an international logistics hub. Russia also places significant emphasis on cooperation with Latin America and the Caribbean (LAC), a burgeoning market with a population exceeding 650 million people. This region opens opportunities for the export of Russian goods, including energy, fertilisers, metals, and machinery.

Countries in the region are keenly interested in expanding cooperation in energy, space technologies, nuclear energy, and defence—industries where Russia has considerable expertise and technological prowess. Conversely, the import of agricultural products such as fruits, coffee, meat, fish, and soya helps Russia ensure food security and broaden its domestic market. Cooperation with LAC countries enables Russia to diversify its external economic ties, reduce dependence on traditional markets, and strengthen its international standing.

Russia’s key trading partner in the region is Brazil, with bilateral trade exceeding USD 8 billion (2023). Economic cooperation with Venezuela and Nicaragua is also on the rise: Russian-Venezuelan trade for January to July 2023 increased by 70 %, and more than doubled with Nicaragua. Notably, trade with Cuba saw a nine-fold increase from January to April 2023. Positive momentum is also observed with Mexico, reaching a record USD 324 million in June 2023. Currently, the share of LAC countries in Russia’s foreign trade stands at 2.2 %, with 1.5 % in exports and 3.5 % in imports, indicating significant growth potential. The geography of cargo deliveries in Russia continues to expand, presenting new opportunities for import, export, and transit.

Modes of Transport
In international cargo traffic, Russia actively employs all key modes of transport—maritime, air, railways, highways, and pipeline—with each one playing a crucial role in facilitating the import, export, and transit of goods. Maritime transport leads in terms of volume, particularly in exports. Russian ports handle over 800 million tonnes of cargo annually, with approximately 70 % comprising oil, petroleum products, and liquefied natural gas. Major ports such as Novorossiysk, Ust-Luga, and Primorsk serve as a link with key global markets.

Sea routes are pivotal in trade with LAC countries, given their geo-graphical constraints—the only alternative to sea transport in the region are air routes. In trade with this region, maritime transport accounts for over 90 % of cargo volume. Key ports in Latin America include Santos (Brazil), Buenos Aires (Argentina), and Callao (Peru). Railways are the primary mode for overland cargo traffic, particularly in the transit of goods across Europe and Asia.

Russian railways handle over 1.2 billion tonnes of cargo annually, with approximately 150 million tonnes in international shipments. The Trans-Siberian Railway and new projects, such as the “North-South” railway corridor, contribute to in-creased transit volumes. Highway transport is vital for short- and medium-distance cargo traffic, particularly in border regions. The annual volume of international highway freight is about 30 million tonnes.

Key destinations include China, the EAEU, and Europe. Air transport is used for urgent and valuable cargo, such as electronics, pharmaceuticals, and postal items. In 2022, the volume of international air freight in Russia was about 1 million tonnes. Pipeline transport is of strategic importance for energy exports. Over 500 million tonnes of oil and around 250 billion cubic metres of gas are annually transported via pipelines, positioning Russia as a global leader in this sector. The diversity of transport modes and their effective interaction enable Russia to successfully carry out international freight operations, securing the country’s firm foothold in global trade.

Infrastructure Development
Russia is heavily investing in transport infrastructure, a vital element of inter-national trade, which opens new avenues for cooperation with international partners. In recent years, Russia has been actively reinforcing its transport infrastructure, leading to significant growth in international cargo volumes. According to the Federal State Statistics Service and the Russian Ministry of Transport, investments in transport infrastructure exceeded RUB 5 trillion between 2018 and 2023.

These funds have been allocated to modernise ports, expand railway lines, build new roads, and develop logistics hubs. One of the key achievements has been the increased throughput capacity of ports. By 2023, their total cargo turnover exceeded 840 million tonnes, a 15 % increase compared to 2020. Special attention is given to the Far Eastern ports, such as Vladivostok and Vostochny, which are of major im-portance in trade with Asia.

The railway infrastructure has also seen significant growth. With the modernisation of railway corridors and the construction of new branches, the volume of transit shipments via Russia has increased by 20 % over the past three years, reaching 1.5 million containers annually.

The development of road networks, including the construction of international transport corridors, has brought about a surge in highway freight volumes to 35 million tonnes per year. Moreover, Russia is eagerly developing infrastructure of the Northern Sea Route, which is becoming increasingly relevant due to reduced cargo delivery times between Asia and Europe. In 2023, cargo turnover via the NSR reached 34 million tonnes, a 25 % increase from the previous year. The development of infrastructure, including the construction of new terminals, modernisation of ports, and expansion of railway capacities, enhances Russia’s competitiveness in the global transport ser-vices market and opens new vistas for increased import, export, and transit volumes.

Trade Routes—Key to Integration
Russia is actively shaping new eco-nomic alliances which contribute to the redistribution of global trade flows and a more balanced world economy. Particular attention is given to the development of transport corridors, such as the NSR and the “North- South” corridor, which are becoming vital arteries of international trade.

These projects not only reduce cargo delivery times, but also foster the integration of economies across various regions, including Asia, Africa, and Latin America. Russia remains open to dialogue and cooperation, offering mutually conducive conditions for all international trade participants. In the future Russia is poised to serve as a bridge between developed and developing countries, promoting a more fair and sustainable global order.