Volga Shipping

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Operating Results of the Volga Shipping Company in 2015: record grain crops transportation for export

In 2015 the Volga Shipping Company vessels delivered 5.6 mln tons of cargos, by 11% less than the previous year. The cargo turnover made 5.3 billion tkm (-28%).

The main reason for the performance decrease was an abnormal low water level on the inland waterways of Russia for two years. In 2015 apart from the Volga shallow water in the area of Gorodets and Balakhna, certain water depth problems on the river Don arose. During the whole period of navigation there were considerable restrictions in vessel draft for vessels passing through Gorodets gateways which resulted in metal and construction materials transportation reduction.

Consequent on routes diversion and transportation cessation as well as on vessels underloading and fleet demurrage in wait for lockage under conditions of the abnormal low water level, the Volga Shipping losses made over 1 billion roubles, three times more than during the navigation in 2014.

Apart from that, operating results were influenced by the change of cargo traffic, caused by complicated economic conditions and difficulties of cargo owners. Thus, due to change of market conditions and cargo traffic logistics export transportation of metal, sulfur and fertilizers decreased.

For the purpose of efficient operation the Volga Shipping Company relocated cargo vessels from the Central to the South water basin. The vessels were used for highly rated export cargo delivery. These transportations enabled the company to make a profit despite the decrease of operating performance. In total the company vessels delivered 3.2 mln tons of export cargo during 2015 navigation, by 19% less as compared to the previous year results. Inland cargo carriage increased by 3% up to 2.4 mln tons.

Export dominance in the cargo traffic that occurred last year, remained the same during 2015 navigation. Correlation of export and inland transportation in the total amount of cargo made 58% and 42% (during 2014 navigation – 64% and 36% accordingly).

Export grain crops delivery from the ports of Rostov region and Krasnodar area to the port of Kavkaz as well as inland transportation of crushed stone from open-pit mines of Karelia were the main cargo flows in 2015. The amount of grain cargo carriage increased by 80% up to 2 mln tons. The Volga Shipping vessels delivered 1.1 mln tons of crushed stone, twice as much as in 2014.

The share of cargo transportation by the RSD44 project vessels increased in 2015: during the navigation 10 dry cargo vessels of the new generation fulfilled about 40% of the total export transportations of the company, having transported 1.3 mln tons of cargo (grain crops, coal, sulfur), by 23% more than last year. The first five years of operation of the RSD44 project vessels demonstrated full conformance of their pay-off rate to the planned figures.

In 2015 the shipping company continued work on management and ship repair processes optimizing. A decision was made to close down Zvenigovо and Gorodets fleet maintenance bases. At the same time the Bor and Volzhsky fleet maintenance bases were enlarged. At present about 70% of the Volga Shipping fleet is located at the Bor fleet maintenance base and at Borremflot shipyard, 30% - at the Volzhsky fleet maintenance base. The number of fleet personnel and shore service workers was brought into compliance with plans and requests.

The total of 87 units of cargo, towing and maintenance fleet and 73 non-self-propelled dry-cargo sections of the Volga Shipping Company operated during the navigation in 2015.

Reference:

The Volga Shipping OJSC is one of the largest shipping companies in Russia, it was founded in 1843. It performs cargo transportation along the rivers and lakes of the country. According to the results of the navigation 6.3 mln tons of cargos were transported by the Company in 2014.

The Volga Shipping Company is part of the VBTH holding – a shipping division of the international transport group Universal Cargo Logistics Holding (the majority shareholder of the VBTH), consolidating a number of Russian railway, stevedoring and logistics companies. The division also includes the North-West shipping company, V.F. Tanker and a number of shipbuilding and cruise assets.

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