DELO Group to Double Capacity at Its Black Sea Container Terminal

  • Business & Finance

Over the past three years, DELO Group, one of Russia’s major private transport companies, has implemented a major investment programme.

 NUTEP – Novorossiysk seaport
NUTEP – Novorossiysk seaport

The programme saw investment in rail and other adjacent port infrastructure, construction of stevedoring and inland storage terminals for oil products, construction of the KSK grain terminal, acquisition of 50% of the NUTEP container terminal from its JV partner and subsequent expansion programme turning the terminal into one of the leading container terminals on the Russian Black Sea coast and in Russia as a whole.

“We are planning to double capacity at NUTEP from 350,000 to 600 – 700,000 TEU,” said Andrei Bubnov, CFO of DELO Group. “This is a breakthrough project for us. It will allow us to handle ocean container vessels, which could reshape the entire Black Sea market by allowing direct calls to Novorossiysk bypassing the traditional transhipment hubs.”

One of the advantages for ships calling at Novorossiysk is the low bunker prices – currently almost $200 per tonne cheaper than at nearby Istanbul.

“We also expect more consolidation in the market and DELO will continue to invest in strategic assets and launch more innovative services to support continued growth.”

Speaking about the impact of the recently denounced P3 alliance or the outlook for any prospective alliance, the very fact that it was proposed has already changed the liner shipping market – in Russia at least, according to Mr Bubnov.

“It prompted the smaller shipping lines serving Russia to consider new niche strategies in order to compete,” he told delegates at the TOC Conference session on Ports and Liner Shipping in the Russian and Baltic markets.

The P3 Network shipping alliance would have positioned the three partners (Maersk, MSC and CMA-CGM) to control as much as 50% of all Russia-bound container traffic.

One new strategy which is bringing many opportunities for DELO Group is that many of the carriers are expanding into in-land operations to be able to offer value added services along the logistics chain.

“Through our intermodal logistics operator, Global Container Services (GCS), we have an extensive network of road, rail, customs, logistics and warehousing facilities and services, so the carriers are happy to work together with diversified service providers such as GCS,” said Mr Bubnov. “Having a strong local partner continues to be a competitive advantage for international players.”

The carriers are also looking at increasing both the number of vessels and the range of alternative port calls that they can offer to customers, so facilities are being upgraded and extended in many areas of Russia.

Mr Bubnov emphasised that rapidly changing conditions in Russia means companies have to be flexible in order to meet customer needs – and take advantage of business opportunities. For instance, a lot of commodities, including chemicals, agribulks and minerals, continue to be shipped in bulk, so there is a lot of potential for containerisation.

Press Release, June 30, 2014, Image: GSC

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