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FESCO and HMM re-arrange East Asia box shipping routes

Left: the flag of the Russian Federation. Right: the flag of South Korea. Graphic: Shutterstock.

South Korean ocean box shipping company, Hyundai Merchant Marine, and Russian Far East intermodal box transport specialist, FESCO, have announced a series of changes to their Russia-China-Korea shipping operations. Rail specialist FESCO has also announced extensive Russia-China box-rail services.

The two companies have been operating a China-Korea-Russia weekly service alongside French operator CMA CGM. The service has been operated by HMM under the name CRN (China Russia North). That service will change its rotation to Qingdao-Shanghai-Ningbo-Vladivostok as of May 14.

HMM adds that HMM and FESCO will add two new services between South Korea and Russia, which it calls KRS (Korea Russia Service) and KR2 (Korea Russia 2). KRS will begin on May 14 and KR2 will begin on May 11.

The South Korean company says that FESCO will deploy one 1,200 TEU ship onto KRS between Busan, on the south-east tip of South Korea, and Vladivostok, Far East Russia. HMM will deploy one ship of 1,000 TEU onto KR2 between Busan and Vostochny Port at the city of Nakhodka, also in Far East Russia.

Vladivostok and Nakhodka are fairly close to each other; Vladivostok is about 55 (88.5km) miles distant in a west-north-west direction from Nakhodka. Both are on the Sea of Japan and are on the 43rd and 42nd parallel respectively. They are both opposite Sapporo, a city on the 43rd parallel on the northen Japanese island of Hokkaido.

A HMM spokesperson said “HMM expects to provide a faster and more reliable service through increased cooperation with FESCO… based on those three services, HMM will strengthen its market position in Russia.”

However, somewhat confusingly, FESCO describes the shipping services slightly differently.

FESCO names one of its services as the FESCO China Express and says that the route is Vladivostok-Vostochny-Shekou-Yantian-Xiamen-Ningbo-Shanghai-Vladivostok. It will have an alternate, faster route called “Eastern Arrow” which will follow the route Vladivostok-Qingdao-Shanghai-Ningbo-Vladivostok. This latter route appears to correlate to CRN route as described by HMM.

FESCO says that the transit times from Ningbo to Vladivostok will reduce from five to three days and that the Vladivostok to Shanghai route will reduce from seven to four days.

The Russian company also talks of its Russian Far East/Korea routes. Stating that operations begin on May 14, which correlates with date given by HMM for the KRS service, the FESCO Korea Express will be split into three routes.

The first will run Busan-Vladivostok (with a 36 hour transit time). The second will run the Busan-Vostochny route (36 hours) and the third, Busan-Korsakov will take five days. Korsakov is a small town on the shores of Aniva Bay, which is at the southern end of the 592 mile long Sakhalin Island, just to the north of Japan’s Hokkaido island. The two islands are separated by the La Perouse Strait.

FESCO operates the port at Vladivostok, which has a throughput capacity of 5 million metric tons of general cargo and oil products, 150,000 vehicles and over 600,000 TEU of containers. A metric ton is 2,204.6 U.S. pounds. FESCO operates a fleet of 21 ships. It also provide rail surface transport and operates 14,000 units of rolling stock and 40,000 international shipping boxes.

FESCO announced approximately eight days ago that it had done a deal with marine terminal operator “Sea Fishing Port Terminal”, which operates at the port in St Petersburg in European Russia. The two companies will offer reciprocal usage of their boxes, container terminal facilities and rolling stock. The two companies hope to launch a weekly container service between St Petersburg and Vladivostok and later expand that service to other parts of the Russian Federation.

Also announced last week was a deal between FESCO and DB Cargo, a European rail freight carrier, to develop a landside reefer box service between Russia and China. Boxes will run from the Russian capital of Moscow to ports in China via Vladivostok with a delivery time of up to 25 days. A return service will also be available. On a straight-line basis that’s a distance of about 4,000 miles.

“The expansion of the geography of container transportation, as well as the development of non-commodity exports are strategic priorities. We expect that cooperation with DB Cargo will allow us to increase the transportation volume and optimize logistic solutions on the routes Russia-China-Russia due to return load,” said the president of FESCO, Alexander Isurin.

FESCO also recently released its 2018 operating results. Vladivostok handled 10.4 million metric tons of cargo and had a 17.7 percent increase in box cargo to 551,000 TEU. Intermodal transport increased by 23.9 percent from 243.6 thousand TEU in 2017 to 301.8 thousand TEU in 2018. International box throughput declined slightly, by 2.0 percent, from 319 thousand TEU in 2017 to 312.5 thousand in 2018.

FESCO recorded consolidated revenues of 57 billion Russian roubles (USD$880.66 million) in 2018, up 30.3 percent in 2017 from the 43.75 billion Russian roubles of revenues it generated in 2017. Earnings Before Interest Taxation and Depreciation stood at 10.61 billion Russian roubles (US$164 million) in 2018, up 36 percent from 2017.

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Jim Wilson, Australia Correspondent

Sydney-based journalist and photojournalist, Jim Wilson, is the Australia Correspondent for FreightWaves. Since beginning his journalism career in 2000, Jim has primarily worked as a business reporter, editor, and manager for maritime publications in Europe, the Middle East, Asia, and Australia. He has won several awards for logistics-related journalism and has had photography published in the global maritime press. Jim has also run publications focused on human resources management, workplace health and safety, venture capital, and law. He holds a degree in law and legal practice.

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