The ‘pivot to the east’ has led to logistical problems in reorienting from European markets
The crisis has, of course, significantly reconfigured the market for our traditional products. We have always been oriented towards European markets, especially in lumber. But the turnaround of goods to the East has led to very serious logistical problems for us. We were always mainly focused on sea transport, but the European shipping companies left us. The Russian company we were working with fell under personal sanctions and we were forced to switch to railways. And together with everyone else we are standing in queues, waiting for cars. It takes us a long time to send our products to markets that have changed radically for us – Southeast Asia instead of European markets — Nikolay Krotov, Deputy General Director, Arkhangelsk PPM.
No one, as they say, probably anticipated before that the problem that we have today could happen. We consider it our number one problem – it is logistics. Today it has become difficult not just to sell, to find a buyer, but today it has become difficult to simply deliver things to the buyer. And as paradoxical as it may sound, the majority of forestry companies today are ready to produce much more but are holding back production volumes. They are holding back because there is simply no way to ship, no way to deliver — Vasilii Ganchenko, General Director, Group of Companies «VTK».
The situation is such that the passage of goods across our border is regulated by China. We are trying to fight this, so to speak. That is probably the right word. There will soon be a series of interdepartmental meetings with Chinese colleagues in the run-up to the intergovernmental meeting that takes place in November every year. Both we and our colleagues from the Ministry of Transport and the Ministry of Foreign Affairs have raised this issue with the Chinese side at practically every platform: 'Open the border control points'. It is clear that COVID still exists. It is clear that it will be difficult for you to work with passengers. But it is wrong to detain cargo under the pretext of COVID — Vladimir Ivin, Deputy Head, Federal Customs Service of the Russian Federation.