Cargo carriers call for easier customs regime in Russia

Published: 12/28/1999

The International Air Cargo Association (TIACA) and the Association of Cargo Operators (AGAK, Russia) held a seminar in Moscow on 14th December 1999 in Moscow focussing on the areas of customs regulations and processing given the possibility of Russia joining the Kyoto convention on harmonization of customs procedures. Aleksei Isaikin, head of TIACA Russian section and general director of Volga-Dnepr, said, “the customs problems in Russia are acute, but still no worse than those in Latin America". He added that Russia"s State Customs Committee (GTK) and the Federal Service of Air Transport (FSVT) understood the need simplification and standartization, but “frequent changes in the leadership of both services have not given a chance to make a move yet". Executive director of the East Line Group Amirani Kurtanidze said that in 1999 the cargo traffic in Russia dropped by 20-25% in comparison with 1998. “However, the cargo sector is healthier than the passenger sector, and cargo operators do not have large debts". He did complain that this was despite cargo carriers paying higher customs charges on cargo then railway and road transport companies, at $1.2 against $0.5 per kg. The second problem is that customs procedures in airports are more complicated than those “at some customs stations along the border" leading to delays. This means that road transport companies are able to deliver a cargo to a destination “at the same time as an airline", which reduces the competitiveness of air cargo. Kurtanidze noted that customs clearing mean a cargo spends 10% of its time with airline in the air and 90% on the ground. In an effort to overcome this situation AGAK has talked the Ministry of Finance, FSVT and GTK to conduct a trial at Domodedovo Airport of Moscow on clearance using computerisation to track incoming cargoes. This is expected to allow forwarders more freedom, while keeping custom"s involvement to a minimum. Kurtanidze said that a successful “experiment" might allow Russian airports to become “transfer centres" for cargoes from Pacific Rim countries to Europe. Addressing the issue of how operators survive in such poor market conditions, Isaikin said that Volga-Dnepr has derived 90% of its revenue from contracts outside of Russia, using its fleet of An-124 and Il-76s. The airline has increased turnover this year to over $100 million, due to contracts from the UN and other international organizations linked to the events in Yugoslavia, Indonesia and other regions. Also the increase came from the growing demand in transportation of bulky oil/gas and military equipment, as well as in the orders for transportation of satellites, rockets, aircraft engines and various components using the very large An-124s. According to East Line"s Kurtanidze, 70% of all cargo traffic carried by Russian airlines is international which insulates the industry to a degree from the instability of the domestic market. He admitted a drop in imported consumer goods this year, but added, “the volumes are recovering". Consumer goods account for 40% of East Line"s cargo business and East Line"s strategic objective is to reduce its dependence on cargo charter flights to regular cargo services. Recently the airline acquired license for regular cargo services between Seoul and Western Europe, and that from Moscow to Delhi.

Article ID: 1248