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. Last Updated: 07/27/2016

Russia Warns Ship Route Faces Closure




VLADIVOSTOK, Far East -- Disappointed by the lack of success of a new shipping line through a Russian port on the Sea of Japan, a deputy transportation minister said Monday that the route, which shaves 700 kilometers off trips between Japan and China, may soon be closed.


With ports in the Far East dying from need of international business, officials in the small port of Posyet had put a great deal of hope into handling cargo headed between China and the Japanese port of Akita. The line, which is serviced by a Chinese freighter, was opened Aug. 18 and was expected to handle 300 containers a month.


However, during a trip to Vladivostok, Deputy Transportation Minister Alexander Lugovets called the line a "miserable semblance of what it should be" and warned that it could be shut down.


Plans to transship goods between China and the United States through other southeastern Russian ports such as Vostochny remain unaffected by the predicted failure of the Posyet-Akita line.


But the announcement was startling because Posyet officials had boasted at the line's opening that they were able to accomplish in a few months what a high-level commission involving U.S. Vice President Al Gore and former Prime Minister Viktor Chernomyrdin struggled to do for five years: Create an effective system of moving goods into and out of China through Russian ports.


Handling Chinese goods has been all the more essential for the region because of the catastrophic collapse of Russian industry, which left the nation with little to export through its aging ports. Meanwhile, northeast China has been experiencing rapid industrial growth.


Posyet officials were especially proud that they put together their plans on a port-to-port basis. "We didn't involve any governmental organizations," said Nikolai Pushkaryov, the first deputy director of Posyet.


But the main reason the line faces closure is the growing prices slapped on cargo containers by the contractor shipping company.


Because of a dearth of business, the company has jacked up the price of a 6-meter container to $930, Lugovets said.


Exact figures were not given for the number of containers that are being shipped.


However, Pushkaryov acknowledged that the volume of cargo carried on the line is quite low. The most recent vessel, which left the port Oct. 11, was not fully loaded, he said.


Originally, two contractors were chosen to participate in the project - Yanbeng Shipping Co. of China and Russia's Petra-Vostochnaya - but there is not enough cargo remaining even for the Chinese side.


Pushkaryov insisted, though, that there is still hope for the project.


"We all should keep in mind that [the line] is new and it hasn't developed yet," Pushkaryov said.


Vladimir Vyazov, spokesman for the Primorye regional administration's Committee for Ports and Sea Transport, agreed.


"It is too early to calculate the effect of a project in two months," he said.


"We need to see it work for at least a quarter."