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Today's paper. Last Updated: 06/02/2012

Take the Slow Boat to Istanbul -- And Shop

NOVOROSSIISK, Southern Russia -- Lena and Natasha have visited Istanbul once a month since 1991, but they have never seen the inside of Saint Sophia or the Topkapi Palace, only the interior of stores that sell leather and cotton goods.


Lena and Natasha are chelnoky, or "shuttles" -- traders who make the 32-hour run from the port of Novorossiisk across the Black Sea to Istanbul to buy cheap consumer goods, food products and clothing that they bring back for resale on Russia's markets.


"We make a little money, we get out of the house, it's better than sitting around all day," Lena said as the two self-described "housewives" waited to board their vessel, clad in matching brown leather jackets and bright orange Reebok sports shoes acquired during a recent trip.


Three years after the loosening of tough Soviet border controls sent floods of Russians abroad in search of consumer goods, chelnoky still account for many of Russia's consumer imports. Doctors, lawyers, bureaucrats and teachers have all quit their jobs to ride "the suitcase routes" as full-time suppliers to Russia's booming commercial shop business.


They travel by plane to Oman and the United Arab Emirates, by train to Poland and Western Europe, and by boat from port cities like Novorossiisk to destinations like Istanbul.


When the chelnoky sail into Novorossiisk, the parking lot at the harbor's passenger terminal fills with trucks from across central and southern Russia, the final destination for two-thirds of the goods brought in. But the impact of the chelnoky is visible locally as well.


"The chelnoky have put goods in the stores," said Novorossiisk's deputy mayor, Vladimir Romanchenko, who estimates that half the stock in the city's stores come from the chelnoky business. "It has given a certain amount of competition and has lowered the price of goods. In this sense, I can only welcome it."


The downside, Romanchenko said, is that the chelnoky business has brought rampant crime to Novorossiisk's docks. Gangs shake down individual traders and take a cut of entire ships' cargoes, demanding exorbitant protection fees and responding violently to those who refuse. This month, five people died in a shootout in the port. In October, one gang refused to let a ship controlled by rivals dock.


Rising alongside the crime rate have been customs duties, as the cash-starved Russian government tries to raise revenues from imports. Canned beer and cigarettes, favorite chelnoky items, now carry import fees of over 150 percent, rates that wipe out any advantage of traveling to Turkey to buy these goods. The chelnoky have resorted to trickery -- disguising or undervaluing their cargo to make it fit under the $2,000 duty-free limit, and when that fails, bribing customs officials.


"Yes, that's the only way to do it, to gild their hands," said Sasha, a cook from the Caucasus mountains, who travels weekly with his friends to Novorossiisk and on to Istanbul.


As Sasha spoke, a young man carried two cases of beer past a Russian border guard, told him something, and walked away with his duty-free booty.


"In our country, it is impossible to make an honest living," Sasha said.


A chelnok used to be able to make a good living. But today, by the time the payoffs, bribes and transportation costs are made, chelnoky only clear about a 5 percent profit. Sometimes, when the goods are not selling in Russia, chelnoky make a loss.


It might seem strange that the chelnoky have not been replaced by a more effective system. But efforts by large companies to rationalize the local consumer-import market by bringing in large quantities of goods by container and setting up a wholesale market for their sale to shops have been unsuccessful.


"As soon as you make it a big business, you become the target of the mafia and tax officials," said a director of a local shipping company, who has responded by buying a couple of catamarans that travel the suitcase route regularly.


Despite the hardships, the chelnoky business continues to flourish. In the first nine months of this year in Novorossiisk alone, passenger-cargo companies sold chelnoky 170,000 round-trip berths at $200 each. It seems that everyone is in on the action. Even the oceanographic institute 35 kilometers down the coast in Gelendzhik has leased out its famed ocean-exploration ships to companies that make the suitcase run to Istanbul.


One of these ships, the Professor Zubow, was once the pride of the Soviet exploration fleet, a sturdy vessel with stabilizers and an extra-thick hull that allowed her to brave Arctic ice and Antarctic storms in search of meteorological and oceanographic data.


Now, her laboratories have been gutted and turned into cargo holds, and the launching pad for meteorological rockets on her afterdeck has been dismantled and packed away in storage on shore. The state funding for those scientific missions dried up long ago.


"Now we transport cars, oranges, lemons, chewing gum, and so on," said the Zubow's skipper, Captain Sergei Lebedev. "You have to adapt."








"Yes, that's the only way to do it, to gild their hands," said Sasha, a cook from the Caucasus mountains, who travels weekly with his friends to Novorossiisk and on to Istanbul.


As Sasha spoke, a young man carried two cases of beer past a Russian border guard, told him something, and walked away with his duty-free booty.


"In our country, it is impossible to make an honest living," Sasha said.


A chelnok used to be able to make a good living. But today, by the time the payoffs, bribes and transportation costs are made, chelnoky only clear about a 5 percent profit.


It might seem strange that the chelnoky have not been replaced by a more effective system. But efforts by large companies to rationalize the local consumer-import market by bringing in large quantities of goods and setting up a wholesale market for their sale to shops have been unsuccessful.


"As soon as you make it a big business, you become the target of the mafia and tax officials," said a director of a local shipping company, who has responded by buying a couple of catamarans that travel the suitcase route regularly.


Despite the hardships, the chelnoky business continues to flourish. In the first nine months of this year in Novorossiisk alone, passenger-cargo companies sold chelnoky 170,000 round-trip berths at $200 each. It seems that everyone is in on the action. Even the oceanographic institute 35 kilometers down the coast in Gelendzhik has leased out its famed ocean-exploration ships to companies that make the suitcase run to Istanbul.


One of these ships, the Professor Zubow, was once the pride of the Soviet exploration fleet.


Now even her laboratories have been gutted and turned into cargo holds. The state funding for those scientific missions dried up long ago.


"Now we transport cars, oranges, lemons, chewing gum, and so on," said the Zubow's skipper, Captain Sergei Lebedev. "You have to adapt."




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