The strongest will survive in the market

Major players are leaving the Russian market: Hapag Lloyd, Maersk, DHL and others. At the same time, they declare a financial recovery in their companies and declare an increase in profits. However, we see that the overall cargo traffic is not growing, but even decreasing.

This indicates that there is a market redistribution between large companies and decrease in numbers of small players.

The growth of profits against the backdrop of declining demand is in no small part influenced by the increase in transportation rates. But why are prices rising? In addition to shortages, price increases are dictated by the “green” agenda. For example, the introduction of emission duties increases the cost of transportation. In addition, these “good intentions” pave the way for less competition and the abolition of market laws. The Russian market is witnessing an active process of business consolidation: companies are acquiring entire supply chains, intensive vertical integration is underway (recent examples include the purchase of the Sakhalin Sea Port by Delo Group). The strongest will survive in the market. Those who can afford to play by the new rules and those who have good administrative resources.

On the other hand, no matter how much all the business giants that have left Russia talk about profits and growth in financial indicators, it is more like “good riddance to bad riddance” than a reflection of the real state of affairs. No one will want to give up a large share of the world market, which is the Russian market. As it is necessary to reconfigure transportation flows, to complicate transportation schemes. Even the largest and most stable company cannot do well under such conditions. Nowadays, it is very common to see one thing written on paper (as a rule, in the media), but in fact it turns out to be something completely different. Let us recall the news about the active development of the North-South transportation corridor, the importance of this direction, etc. The Indian direction, indeed, represents an important part of containerized cargo transportation. The figures are such that last year in this direction the volume of container shipments amounted to 195 thousand TEU. Is it much or not? For comparison: intra-Russian transportation only for the first half of 2022 amounted to 1 million 252 thousand TEU. Therefore, only by double-checking and analyzing the information, one can see the whole picture.