Customs Risks Holding Up Cargo Business

Few people in Russia are likely to be aware of the "Fresh Shuttle" project, also known as the "Salad Shuttle," which involves seventy-two 20-foot sea containers that will bring fresh produce from Rotterdam to Moscow twice a week until the end of the month.


For Holland, which accounts for 27 percent of all shipping within the European Union and whose transport business makes up 8 percent of its gross domestic product, the task of delivering goods of any volume and type to anywhere in the world is one that is well understood. That is, of course, if the business is not done in countries of the former Soviet Union.


Transporting goods eastward requires a lot of time and much patience and a readiness to come up against the most nonstandard of situations. For trucks operating in Latin America, Dutch transport companies have worked out a system of satellite connections that allows Rotterdam to operate the doors and gears of the vehicle, which for some reason goes off course somewhere in Brasilia, for example. But how to deal with the very specific adventures of trucks in Russia?


At the beginning of the month, for instance, the Russian customs authorities blacklisted several Dutch freight companies. Naturally, the drivers of the trucks from these companies learned that they were forbidden to enter the country only when they reached the border. But that is not the main point. Rather, however justifiable the decision to ban the companies might have been, they were put on the blacklist because of alleged violations made during 1993 and 1994.


The representative of the Association of Truckers of Holland, Teo Boelhouwer, told me how right in front of his eyes, his own truck left Russian customs for heaven knows where. No, the truck was not stolen. Simply, as a punishment for some kind of violation, the customs office sold it for $20,000 -- about 10 times less than what it was actually worth.


But what is most interesting is that this sad incident did not dissuade Boelhouwer from remaining in the transport business in Russia. He is also attracted to the Salad Shuttle project.


It should take a container 2 1/2 days to get from Rotterdam to Moscow. In practice, however, it takes at least a week and more often longer. Customs formalities and the antediluvian level of processing the cargo on Russian territory and outdated infrastructure makes putting through urgent shipments in large quantities almost impossible. Nonetheless, the participants in the Fresh Shuttle project have managed to make the trip from Rotterdam to Moscow in six days. The goal is to reduce this time to 4 1/2 days.


The persistent efforts to make money on the enormous Russian market have indeed worked wonders. The only thing that is troublesome, however, is that there is a danger that Russian authorities and entrepreneurs will decide that Western partners are prepared to work on the Russian market under any conditions and therefore stop fighting for them.


Today, there is a greater sense that the Russian side -- with its laws, bureaucracy and inconsistency -- is more often fighting against foreign investment rather than for it.





Mikhail Berger is economics editor for Izvestia.