WHAT sounded like "Reagonomics" - or supply-side economics - was touted loudly at last month's St Petersburg Freight 2007 conference as well as many hopes expressed for rapid container growth on Black Sea as the cost-cutting back door to Russia and Europe.
One surprise, according to the post-conference communique from the organisers, SeaNews Information & Consulting of St Petersburg, was the absence of the usual complaints from delegates about the failures of the rail service, which appeared to many delegates to be much improved.
"When rail issues are discussed, it has become a tradition to find them at fault. However, this year the tradition was broken and there was not a single complaint about either Russian Railways or TransContainer," said the SeaNews statement post conference statement.
National Container Company (NCC) vice president Egor Govorukhin told the delegates of Russian container growth, starting with the main NCC First Container Terminal in St Petersburg, which will expand to 1.6 million TEU capacity by 2012 and of the terminal under construction at Ust-Luga that will to be able to handle up to 3 million TEU by 2015, as well as the NUTE terminal at Novorossiysk that will be able to lift up to 500,000 TEU.
Among those attending the conference were Hans-Christiaan Mordhorst, managing director of Maersk JSC, the Russian branch of the AP Moeller Maersk and Ghislain Lorthiois, deputy general manager of Terminal Link, the terminal arm of CMA CGM.
Supply-side economics entered discussions from still incredulous shipping executives. Ambitious plans were based on the market potential, which, according to Tatiana Kuznetsova, head of the port department of Severstaltrans (major shareholder of Petrolesport), was much ahead of the existing capacity.
"The demand follows the offer," said delegate T Kuznetsova. "If, by some magic, there all of a sudden appeared three million TEU of new capacities in St Petersburg, they all would be utilised."
Believe it or not, said Andrey Tokarev, strategy director of Vladivostok Commercial Sea Port, that is what actually happens. "When we first handled 100,000 TEU, we thought that was the limit," he said. "But the following year we handled 150,000 TEU - and, again, thought that was the limit. And then the following year, it was 160,000 TEU." This year Vladivostok Container Terminal is expected to handle 180,000 TEU, next year - 198,000 TEU.
Delegate S Kozlov said Russia needed a new deep-sea container port for 10 million TEU on the Black Sea, suggesting Russia facilitate the coming Shanghai, Constansa, Novorossiysk trade into Moscow. Fesco analysts, the communique said, estimate the potential savings on major Black Sea hub at some US$300 million per million TEU annually.
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