The China-Russia trade surge has resulted in a significant number of shipping containers accumulating in Russia, causing low container prices.
A recent analysis by the logistics platform Container xChange has revealed that shipping containers from China are accumulating in Russia due to a substantial increase in Chinese goods entering the country. According to the report, Russia now has an excess of 150,000 shipping containers that importers are struggling to return to China.
In the first eight months of 2023, bilateral trade between China and Russia has surged by 32% compared to the same period in the previous year, reaching a total trade volume of $155 billion. This trade increase includes a substantial rise in Chinese exports to Russia, which grew by 63.2% year-on-year, reaching $71.8 billion. Imports into China also saw growth, though more modest, with a 13.3% increase to $83.3 billion.
The report by Container xChange attributes the container glut in Russia to the "deepening trade imbalance between Russia and China" in terms of the type of products transported in containers. Chinese purchases of Russian raw materials primarily use rail tanks and open wagons rather than containers. On the other hand, Chinese suppliers are exporting products like cars and consumer electronics to Russia, filling the gap left by global brands exiting the Russian market following the conflict in Ukraine.
China's increased trade ties with Russia have also shifted Russian energy trade towards the East, with almost a fifth of China's crude imports in July coming from Russia, according to the Organization of the Petroleum Exporting Countries (OPEC). This growing energy partnership has raised concerns that China's economic support may indirectly support Russia's actions in Ukraine.
Container xChange highlighted broader logistical challenges related to changing trade patterns and congestion, including overloaded Russian ports and roads leading to transportation inefficiencies. While some investments have been made to improve infrastructure, fiscal constraints and methods to cover budget shortfalls complicate these efforts. The report emphasized that Russia's pivot to Asia relies on substantial infrastructure development.