DP World May Build Vladivostok Terminal for Arctic Container Shipping

Dubai-based port operator DP World is launching a feasibility study for a new container berth at the port of Vladivostok, Russia’s primary shipping hub in far eastern Siberia.

If the study determines that the terminal is viable, the new berth would help to expand Vladivostok’s port into a transshipment hub, in line with the proposed development of Russia’s Northern Sea Route (NSR). The study will be completed in partnership with FESCO, Russia’s leading intermodal transport company. The agreement supports a broader partnership between DP World and Russian nuclear power agency Rosatom, the operator of Russia’s icebreaker fleet and the lead department for the development of the NSR.

“DP World supports President Vladimir Putin’s vision for the Northern Sea Route, which is one of the last great trading routes in the world to be developed. Opening up an alternative route to the Suez Canal between East and West will increase the resilience of world trade. It has great potential to develop economic activity and prosperity in Russia’s far north,” said Sultan Ahmed Bin Sulayem at a signing ceremony.

The NSR runs through Arctic waters north of Siberia, from the Kara Sea to the Bering Strait, and Russia hopes that it can develop it into a busy commercial shipping lane. The route would reduce the length of voyages between East Asia and Northwestern Europe by 4,000 nm, cutting the shipping time by about two weeks. Russian President, Vladimir Putin has set a target of 80 million tons of cargo to transit through the route by the end of 2024, more than double the current volume of 33 million tons.

The proposed berth in Vladivostok would be part of the infrastructure needed to operationalize the route. Cargo would be brought to the port by feeder ships and rail from countries in East Asia, then loaded onto Arctic-class container ships. On Russia’s West, Murmansk port is also earmarked for development to connect cargo to ports in Northwestern Europe. Under the plan, DP World would manage the feeder connections at the two ports.

“We are delighted to be working closely with a company such as DP World that is handling roughly 10 percent of the global container traffic,” said Andrey Severilov, Chairman of FESCO.

The two firms' discussion about cooperation appears to have been ongoing for some time. In January 2020, Russian business newspaper Vesti Finance reported that DP World was interested in bidding for a 49 percent minority stake in Fesco; DP World did not confirm the proposed transaction.