Russia recently updated its list of sanctioned goods with an appendix to a federal decree issued by Moscow on 15 October. The complaints reportedly mostly concern wood products and textile goods. According to shippers, as a result of these amendments, part of their cargo was included in the list of dual-use items, which transit via the territory of Russia is banned or could be allowed only under special conditions.
Russia says it’s not so bad
In the meantime, according to the explanation of the Russian Federal Customs Service, while there were several cases of additional checks of transit cargo delivered from China with the final destination in the EU, these cases are not widespread. Most cargo which became a subject of additional inspections has already received a green light for the further delivery outside the customs border of Russia.
Russia continues transit of rail cargo via its territory in standard mode without any additional inspections in cases which are not associated with the need of such inspections, according to recent statements of representatives of the Russian Federal Customs Service.
This year container cargo deliveries by rail transport on China-EU direction are steadily recovering after two years of serious stagnation. According to earlier data of the Russian Ministry of Transport, in the first half of 2024 the growth was equivalent to 35 per cent year-on-year basis, while the same trend is also observed in the second half of 2024. There is a high possibility that these deliveries may reach pre-crisis volumes (about 400,000 TEUs) already at the end of the current year.
Sea shipping transit times are rising
One of the reasons for this is the instability in the Red Sea, with the ongoing threat of attacks from the Islamic Houthi groupings. Due to this, shippers are once again paying attention to the trans-Russian corridor. In general, the requests for rail transit through the Russian Federation had grown by 40 per cent after the Houthi attacks in the Red Sea. According to representatives of RZD, the speed of delivery of goods from the borders of China to the borders of the EU along this axis is still 5-7 days, three to five times faster than in the past.
Also, according to analysts, changes in the routes of ocean-going vessels via the Cape of Good Hope have led to an increase in transit time by an average of 10-14 days or more depending on the base port, an increase in operating costs and freight rates, as well as disruption to voyage schedules on one of the main trade routes between Asia and Europe. This has created the need to find alternative routes, and transit via Russian railways seems to be the most optimal solution.
Also the rail transit via Russia is still more convenient than other routes. As the current trade between China and the EU is increasing, the Middle Corridor does not yet have the necessary infrastructure capable of handling such volumes. In addition, the use of alternative routes is up to 30 per cent more expensive for shippers.
Given that prices for rail transportation from China to Europe have always been 1.5-2 times higher than sea freight rates, the main cargo in this direction is electronics, cars, auto parts, equipment, and other goods for which transit time is critical. For rail transportation, it is on average 12-25 days instead of 40-60 days by sea. Analysts also said that most consumer goods are not subject to sanctions and counter-sanctions, thus the direct route via Russia remains beneficial for the EU.
