May 12, 2022 MEMRI Daily Brief No. 380

Russia's Air And Ground Logistics Conundrum

May 12, 2022 | By Dr. Vladislav L. Inozemtsev*
Russia | MEMRI Daily Brief No. 380


As the sanctions against Russia intensify, most observers mainly pay attention to either the financial sanctions that prevent the country's banks from conducting operations with U.S. dollars or Euros and from using the SWIFT clearing system, or to personal restrictions affecting thousands of Russians who are now banned from traveling to the Western countries or possessing property there. Yet, I would argue that the Russian economy suffers not so much from these financial limitations, but rather, among other factors, from the massive transportation disruptions caused both by direct sanctions and by corpo­rations withdrawing from the Russian market.

Not long ago, Russia was very hopeful about its transit potential, which was secured by the modernization of the continent-long Trans-Siberian corridor, by the One Belt/One Road projects with Chinese investors, and by development of the Northern Sea Route. However, Russia has now became a "black hole" on the global transportation map.


Russia's Air Transport

First and foremost, the Western sanctions knocked out Russian air transport – not only international but also domestic. Between February 26 and March 3, 2022, Russian air companies were officially banned from flying to the UK, the EU countries, the United States, and Japan. Yet, since the Western powers ordered all the companies in their jurisdiction to discontinue aviation services to Russia, planes that were leased from Western companies or registered abroad had to be returned to the lessees. Prior to the war, up to 93 percent of passenger jets operated by Russian companies had foreign registration.[1]

After 78 planes were seized abroad,[2] due to sanctions, Russian companies can now only fly abroad using their aging Il-96 liners and SSJ-100s, all registered in Russia, while the remaining leased planes serve only domestic destinations. Simultaneously, all Western companies discontinued the use of Russian airspace for flying to Asia,[3] and Airbus and Boeing stopped the supply of aircraft parts and services to Russian airlines.[4] The Russian government announced a massive aid package to the struggling sector amounting to about $1.45 billion,[5] with a major part of it going to the national flag carrier Aeroflot, which had previously also accumulated all the charges paid by Western airlines flying over Siberia.

Furthermore, most of the airports in Russia's southern regions and in the occupied Crimea have been closed since February 24 due to the security alert. As a result, according to preliminary data, Russian passenger air traffic fell by 23 percent in April compared to February, but only by six percent compared to February 2021, as that was the time of numerous COVID restrictions.[6] If compared to April 2019,[7] Russian air passenger traffic in April 2022 was down 44 percent,[8] and there are more and more reports suggesting that regional companies are experiencing an increasing shortage of planes.

Aurora, a state-controlled company serving Russia's entire Far East that recently dissociated from Aeroflot, just asked other companies for help and will start flying on An-24 aircraft to four subsidized destinations. It is worth noting that the An-24 is a turboprop machine introduced in 1959, and the last one was built in the Soviet Union in 1979. Its use was outlawed in Russia in 2012 after the aircraft was involved in several deadly crashes.[9] Without spare parts and possessing only domestically produced SSJ-100s, around 70 percent of which are composed of foreign components,[10] Russia is now unable to deliver even a single passenger jet with fewer than 100 seats until at least 2025. Major airports have already sent a significant part of their personnel home on unpaid leave, and Sheremetyevo, the country's largest international airport, which serves the city of Moscow, closed three of its five terminals and its newly built runway.[11]

Russia's Rail Transport

No less problematic is the situation in Russian rail transportation, which accounted for up to 86 percent of all domestic freight turnover in 2019, excluding the pipelines that are also mentioned in Russian statistics, before the COVID pandemic broke out.[12] The state-owned railway company Russian Railways used to rely heavily on the transportation of commodity goods (coal's share of the overall turnover tonnage stood as high as 29.1 percent)[13] but the government also invested billions of dollars into modern container shipping services and into modernizing passenger trains. All these sectors are now being put at risk by international sanctions.

To begin with, the situation with containers in Russia resembles that of the airplanes in the country. Out of 800,000 containers permanently in use in the country, around two out of three belong to foreign transportation companies, which have initiated the withdrawal of their fleet – whereas the Russian domestic production capacity is less than 10,000 containers per year.[14]

The first result of the sanctions can already be seen with the container shipments in northwestern Russia, which declined so sharply that businessmen believe that in May their total turnover in the region may be down by 90 percent[15] Furthermore, the overall annual drop in rail transportation turnover approached five percent in April, compared to the 2.4 percent increase year-over-year recorded in February.[16]

The modern carriages, both freight and passenger, have been built in Russia either by Western companies (e.g., the Siemens-made Sapsan, the high-speed trains that serve the Moscow-St. Petersburg route, and Lastochka, which is used predominantly for low-profile regional services, while new sleeping cars are produced by joint venture between Siemens and the Russian metal-processing company Sinara)[17] or have a critical share of Western-produced components (e.g., the latest Russian electric loco ЭП-20 was jointly designed by Russia's Transmashholding and France's Alstom).[18]

It is also worth noting that the total turnover of goods is decreasing fast, due to European sanctions (the EU introduced a ban on Russian steel products, and, starting from August 1, will end purchases of Russian coal)[19] and due to the fact that many international shipping companies (among them Maersk, MSC, and CMA CGM) terminated their shipments to Russia, thus reducing the turnover activities at Russian ports. Moreover, it seems that Chinese partners (who still use the Russian airspace for flying to Beijing, Shanghai, and Hong Kong from Europe and North America) prefer not to rely on any kind of Russian ground transportation, announcing new freight routes swiftly bypassing the country via Kazakhstan, Caspian ferries, and Turkey. In late March, Kazakhstan, Azerbaijan, Georgia, and Turkey signed a memorandum meant to accelerate the efforts for creating a trans-Caspian cargo corridor.

Russia's Automobile Road Transport

Another looming catastrophe could affect the automobile road transport that is not as developed in Russia as it is in Europe or in the United States, but which plays nevertheless an important role in supplying large cities with imported goods. In better times, in 2019, only around four percent of trucks came to Russia from the South: from Turkey, Iran, Armenia, or the from North Caucasian Black Sea ports, where the imported goods were offloaded.

More than 70 percent passed through Belarus, the Baltic states, or Finland as the traffic via Ukraine has largely been disrupted since 2014. Starting in 2020, following the contested elections in Belarus and the hijacking of a Ryanair flight by Belarusian authorities in 2021, the Belarusian transit became less reliable, and, after the start of the war in Ukraine, the land borders between Russia and Belarus and the EU countries were almost sealed.

In its fifth sanction package, the EU banned all Russian and Belarusian automobile logistic road transport companies from transporting goods to and from the EU countries.[20] However, Russian authorities still have not presented their "countersanctions," so European trucks are still allowed to enter Russian territory, though most businessmen familiar with the situation in this sector believe it will not last for long, and they are also expecting major disruptions in rail freight since Western sanctions against Russia are going to be strengthened.[21] In April, the number of trucks passing through the major customs posts both in Belarus and Western Russia decreased by 65 percent compared to February.[22]

Consequently, in April, most companies that previously delivered freight to and from European countries refocused on the domestic market. This move caused a massive drop in tariffs, since the overall traffic amounts decreased, and the Moscow region (that in recent decade developed into a huge logistical network) experienced a surge of fierce competition.

Shipping And Logistics

The average tariff for shipping goods from Moscow and St. Petersburg to the Russian regions dropped by at least 40 percent, to under $1 per mile for a truck, which is less than the transportation costs (the U.S. rates start from $3.14 per mile).[23] At the same time, the spare parts for European vehicles increased in price by 60 to 200 percent and most of them are now substituted by Chinese products of lower quality.[24] Russia's own trucks face a dire perspective. The only large producer, KAMAZ, saw its partner Daimler withdraw from Russia,[25] and now it is seriously considering producing its Soviet-type model first introduced in 1976,[26] since it cannot rely on any imported components. Moreover, the Russian government, recognizing that the country may soon face a deficit of trucks, is trying to increase domestic production by authorizing the use of "Euro-0" Soviet-type engines that violate all the currently existing norms for air pollution.[27]

I had already mentioned that before the war, most Russian freight was transported between the country's central regions and either the EU member states or Belarus and Ukraine. Up to 60 percent of the rail transportation was west-bound while 35 percent was east-bound by, with the automobile road transport even more linked to Europe. By late March the proportion shifted to 45 percent going west and 50 percent going east, and it will continue to change in the coming months.[28] The Russian government also ordered that all necessary measures should be taken for dramatically increasing the capacity of the southern corridor from Iran and Turkey via Azerbaijan or Georgia toward Dagestan and further north.

Since the Black Sea is now considered a war theater, Russians cannot even ask minor shipping companies to ship their cargo to Novorossiysk or Taman', since no insurance company would issue a policy for such journeys. The capacity of Russian, or better Russia-controlled, cargo fleet is too small for serving the pre-war commercial traffic, and I also suppose that transit via Turkey is likely to increase in the coming months as Ankara has not joined the anti-Russian sanctions and might buy many Western products for their resale to Russia. The Russian government approved the legalization of "parallel imports" of 96 products, allowing suppliers of imported products to sell them in the Russian Federation without the permission of the trademark owner.[29]


All the above does not mean that Russia is already completely cut off from the global market or that its domestic transportation system has collapsed. Yet, the most critical issue still is the price of logistical services arising from Russia's vast territory, which Russian President Vladimir Putin is now trying to increase further. Some of the Russian goods that were destined for the European market simply cannot be redirected to any other outlets: fuel pellets produced by Russian timber companies (that were considered "ecological" fuel and exported to Europe in huge quantities) need $90 per ton for rail delivery to Vladivostok,[30] which makes its total cost greater than the market price in the region.

Hence, I would argue that the Russian government should act fast in supporting: exporters, by subsidizing the railway tariff; truck companies, in order to allow them to stay on the market; and consumers, who suffer because of price increases. In all this, only airlines received sizeable financial support, with Russian Railways being next in line, since the company has strong lobbying power. Smaller entities will most probably get nothing, and the regional air traffic, the container transportation, and the truck shipments between Moscow and the regions may and will stay in place.

*Dr. Vladislav Inozemtsev is MEMRI Russian Media Studies Project Special Advisor


[1], September 16, 2020.

[2], March 22, 2022.

[3], February 28, 2022.

[4], March 2, 2022.

[5], April 13, 2022.

[6], March 10, 2022;, April 15, 2021.


[8], May 6, 2022.

[9], July 12, 2011.

[10], September 16, 2020.

[11], March 16, 2022.

[12], 2020.


[14], April 13, 2022.

[15], April 13, 2022.

[16], April 5, 2022;, March 1, 2022.


[18] zhd prom 2016-2018.pdf


[20], April 10, 2022.

[21], April 25, 2022.

[22], April 15, 2022.

[23], May 5, 2022;

[24], May 5, 2022.

[25], February 28, 2022.

[26], March 9, 2022.

[27], April 19, 2022.

[28], April 18, 2022.

[29], March 30, 2022;, May 6, 2022.

[30], May 5, 2022.

Share this Report: