Freight Costs for Chinese Goods to Russia Surge Amid Kazakhstan Border Gridlock

Shipping goods from China to Russia has become significantly more expensive as long queues at border crossings in Kazakhstan snarl trade routes, logistics firms and importers said.

The cost of transporting a container has already risen by about 40% compared with September, and another round of price hikes is expected in November, market participants said.

The price rises are due to a combination of seasonal recovery in trade, preparations for harsh winter conditions, delays in truck and rail shipments due to inspections in Kazakhstan, higher railway transport costs and the suspension of two major shipping lines, said Andrei Zakharchenko, founder of logistics company Tradest.

According to Tradest, the cost of shipping a 40-foot container from Shanghai to Moscow by sea and rail via the Russian Far East has risen by $600 to $5,300 since September.

Direct rail transport is up $1,000 to $5,400, while delivery by truck now costs around $10,500 — also up $1,000.

For many importers, actual costs are even higher due to additional charges for rerouting around traffic jams in Kazakhstan.

Russia tightened customs inspections in early September to curb grey imports and contraband moving through Kazakhstan and Kyrgyzstan from China. The change led to lines of thousands of trucks at border crossings, followed by long delays for container trains.

The gridlock has affected not only semi-legal “cargo” shipments but also fully documented imports.

Several importers said they had waited nearly two months for legally cleared goods, while containers from grey-market traders were completely stalled.

Middlemen offering to expedite border clearance for an extra $700-$1,000 per container — effectively ensuring shipments bypass inspection — have reportedly emerged.

Meanwhile, Kazakhstan’s customs authorities have also stepped up checks on goods entering from China, adding to delays and costs.

“Our operator warned that in October, Kazakh customs began inspecting all import containers at rail crossings with China, and this alone has added around $500 to delivery costs,” said a manager at a household goods trading firm.

“Overall, if we’re lucky, we now pay about 10% more than a month ago, but in many cases it’s closer to 40%,” another importer said, a view echoed by several others in the industry.

Freight forwarders and importers expect further price increases driven by seasonal factors in November.

“Every year, winter conditions push up rates — routes get tougher, companies need special equipment and anti-ice measures and even winter diesel fuel costs more,” said an employee at a forwarding company.

Zakharchenko said he expects the upward trend to continue until the Chinese New Year in mid-February.

Rising logistics costs are likely to feed through to retail prices, importers warned. The impact could be even stronger if grey-market shipments — which supply many online sellers with cheap clothing, footwear, home goods and electronics — are cut off.

“As a legal importer, I’d welcome the disappearance of those small competitors from the market,” said the owner of a major trading company. “But as a consumer, I understand that many Russians relied on them for affordable clothing and footwear.”