The next key route would be the Caspian Sea, involving smaller vessels
Early June, shippers were scrambling to find alternative routes after the disastrous Suez Canal blockage. Since then, the writings were on the wall that the canal authority’s institutional failure will undermine the route’s value.
An opportunity for Russia’s economy
The Russian economy has rapidly debilitated for months and is not showing any signs of slowing down. As at June 2021, Russia’s Finance Minister, Anton Siluanov warned of the country’s high inflation, peaking at 5.9 per cent. He said at the St. Petersburg International Economic Forum held in the same month, “If we continue with increased spending, what will we get? Overheating. Elements of overheating are already visible — high inflation.”
Russia’s President Vladimir Putin recently met with the country’s shipbuilding executives to review plans to prioritise short sea shipping hoping to bypass the Suez Canal. Alexei Rakhmanov, Chief Executive of United Shipbuilding commented on this initiative: “We are focusing on the South-North corridor, primarily moving cargo via the Caspian Sea. This year, we are starting to design a vessel that will ply the Caspian Sea with Helsinki as its final destination. In this way, we will be opening up routes that do not depend on foreigners.” United Shipbuilding is Russia’s largest shipping company.
Suez Canal becomes an option
The Trans-Caspian International Transport Route (TITR) is a key alternative to connect Asia and Europe through the South Caucasus and diversifying trade between East and West. Shipping goods through the TITR is not new, albeit not totally by sea. The route runs from the Chinese Lianyungang seaport to the Chinese-Kazakh border through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia to Ukraine and Poland. The biggest advantage is the single tariff and a single-window system along the entire route, proven to reduce time delays and operational costs.
The maths revealed up to 15 days’ voyage reduction if transporting goods from China to Ukraine’s Chernomorsk city seaport and further to European markets via the TITR. The Suez Canal would need a minimum of up to 40 days. The Kremlin said short sea shipping through the Caspian Sea can be as quick as 8 days for a trip from Northern Iran or Western China to Helsinki, Finland.
Marine Online News Team
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