Russia terminal operators oppose Customs changes at top port

Russia’s leading stevedoring companies have voiced their disdain for proposed initiatives of the Russian Federal Customs Service and some state officials to curb the powers of Customs offices to service import-export cargo in the Big Port of St. Petersburg, Russia’s largest container port.

The moves, made ostensibly to battle corruption at Big Port, threatens to make the port uncompetitive, particularly against Bronka, a new deep-sea facility roughly 40 miles away, and Ust-Luga, another Russian Baltic port 100 miles away. The prospective new policy and distance between these ports means there will be huge delays for shippers if inspectors require additional paperwork or need to inspect cargo.

The stevedores, through the Russian Association of Commercial Seaports, have sent a petition to Andrei Belyaninov, head of the Federal Customs Service, Georgy Poltavchenko, the governor of St. Petersburg, and Vladimir Bulavin, a presidential envoy for the North western Federal District, wherein they protested against the delegation of powers held by the customs office in Big Port to the posts in Bronka and Ust-Luga.

The association said that because of the distance from Big Port to Bronka and Ust-Luga, they can’t realistically be called alternatives to Big Port and that this distance would unfairly benefit Big Port’s competitors.

The terminal operators also said the policy change would increase the need for inspections, necessitate extension of customs-clearance terms in contracts, and raise costs overall.

This will lead to the redistribution of container traffic to Bronka from the Big Port, while many of 23 stevedoring companies operating in Big Port, will be forced to relocate to Bronka, the companies said.

The move also goes against state efforts to aid Russia’s port and shipping industry, and could force a number of stevedores out of business, according to Igor Fedorov, CEO of T.A. Management, a company that manages the port assets of UCL Holdings, one of Russia’s leading transport investors.

Some analysts believe that the customs change was made to benefit the interests of Bronka’s owners, Dmitry Mihalchenko and Nikolai Negodov. Negodov is a retired colonel of the Russian KGB that reportedly has some strong connections in the government.

In the meantime, the FCS will continue lobbying for its initiatives despite the criticism from stevedores, arguing that the new scheme will increase container volumes in Russia’s Baltic Basin ports, according to an FCS spokesperson.

The Ministry of Transportation also believes that the new policy will benefit the entire Russian port industry and that the distance between Bronka and Big Port shouldn’t be a problem because most shipping documentation is sent electronically.

Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to as the source.