Empty containers pile up in Russia

Russia’s trade with the West has plummeted since the invasion of Ukraine and the imposition of sanctions, and it has quickly substituted commerce with China instead.

That exchange, however, is not evenly balanced – and it is resulting in a steady accumulation of empty shipping containers on the Russian side of the border, according to consultancy Container exchange.

In a market update, the firm said that surging imports from China have driven the price of an empty 40-foot box in Moscow from more than $4,000 last October to less than $600 today.

“Currently there are around 150,000 surplus containers in Russia, and everybody is looking for an opportunity to return containers back to China,” one of the firm’s customers reported. “Chinese companies are selling containers below market price to get rid of the boxes since it doesn’t make sense to send them back to China.”

A large part of the imbalance comes from the nature of the trade between China and Russia. Both nations exchange goods of roughly equivalent value – and in dollar terms, China usually imports more from Russia than it exports – but Russia mostly sells bulk commodities, which travel by railcar, bulker or tanker.

Without much in the way of Russian dry goods making the trip to China, this means a pileup of empty import containers at Russian rail depots and ports. In some regions, the excess supply has reached an “almost critical” stage, according to Container xChange.

Another contributing factor is the proliferation of Chinese shipping companies providing container services from China to Russian ports. Newly-launched CStar Line and Yangpu New New Shipping have expanded their offerings, including Yangpu’s unique Northern Sea Route service to St. Petersburg.

Cargo volumes from Asia to the Russian Far East have risen, and rates on these trade lanes have been kept low by competitive pressure.