Routes of Soviet timber to world markets

Routes of Soviet timber to world markets

Geoforum.Vol. 14. No 2. pp. 20-210.1983 Prmtedin Great Bntain. 0 ~Xllh-71X?/X3 13.t10+0 00 ,983 Pergxnon Prew Ltd Routes of Soviet Timber to World ...

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Geoforum.Vol. 14. No 2. pp. 20-210.1983 Prmtedin Great Bntain.

0

~Xllh-71X?/X3 13.t10+0 00 ,983 Pergxnon Prew Ltd

Routes of Soviet Timber to World Markets

JARMO

ERONEN,

* Helsinki,

Finland

Abstract:The USSR is the largest producer of roundwood and sawn wood in the world and 4-5% of production is exported, for the most part to Europe and Japan. This paper analyses the area1 distribution of roundwood and sawnwood production and the spatial pattern of exports. Over 60% of the timber destined for export is delivered to ports or border stations by train: the rest moves by river. The major export ports for wood products and the character of their hinterlands are described. The economic problems arising from long-distance rail movements are examined and the impact of the areal shift in production towards the eastern regions is discussed. White Sea and Baltic ports may decline in importance, while the Pacific ports are likely to expand when Siberian wood starts flowing there on the new BAM railway.

In order to understand the transport problems arising from the export trade it is necessary to examine separately the major export ports and the routes which connect them to their hinterlands. The sheer size of the country prohibits its consideration as a single exporting unit.

Introduction The Soviet Union is the leading timber producing country in the world, whether output is measured in

terms of total forest resources (83,000 million m3), annual logging volumes (360 million m’) or sawnwood production (100 million m”). The bulk of this production is consumed domestically, with only 45% of roundwood and sawnwood being exported. Even so, the Soviet Union is one of the leading world exporters of timber. One-fifth of Western Europe’s imports of sawnwood and almost all the timber imported by Eastern Europe comes from the Soviet Union. The third major market for Soviet forest products is Japan, to which both roundwood and wood chip paper are exported.

Areal Production

*Research

fellow,

Helsinki School 14-16, 00100 Helsinki

of Timber

In the Soviet Union the bulk of logging still takes place in the European part of the country, which only contains ‘/4 of the country’s total forest resources. However, the importance of Siberia and the Far East is growing; between 1960 and 1975 their share of production grew from 24 to 33% (see GLOTOV, 1977, pp. 18-19). Figure 1 shows the level of logging activity in each of the Soviet economic regions and the share of the total production which goes for export.

This paper examines the main routes by which Soviet roundwood and sawnwood are exported. These products account for three-quarters of Soviet forest product exports by value and nine-tenths by weight. Since pulp, paper and wood board make only a minor contribution to the total trade they have been omitted from consideration here.

Runeberginkatu

and Exports

The long-distance transport of roundwood is not economically feasible because of the low weight value of the product. Thus it is natural that most roundwood destined for export is cut in the immediate vicinity of ports and frontier stations in order to minimize land haulage costs. About one-half of

of Economics, 10, Finland. 205

206

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Figure 1. Annual product ion and roundwood

exports by Soviet economic re,gions

V

Ports I)AKHANGELSK 2) LENINGRAD- VYBORG 3) NOVOROSSIISK 4) IGARKA bawnwood output Block sector = share of exports ““’ Limit of tundra and steppe

Figure 2. Production

and exports of sawnwood by Soviet economic regions.

exported roundwood is cut in the Far East and is exported by sea to Japan. A further third of the exports originate in the North-western economic region, mostly from the Carelian ASSR and Arkhangelsk oblast, from which the wood is hauled mostly by train to Finland and Eastern Europe. Since the saw mill industry tends to be oriented towards its raw material sources, the area1 distribution of the industry does not differ considerably

from that of roundwood production. However, the industry is more market-oriented than logging, and there has been marked tendency for it to shift eastwards. As a result, the Siberian and the Far Eastern share of the total sawmill production has risen from 20 to 32% over the period 1960-1980 (NARODNOJE KHOZYAISTVO RSFSR V. 1980 G, p. 64; NARODNOJE KHOZYAISTVO SSSR V. 1980

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G, p. 176). Figure

2 shows the spatial distribution of the sawmill industry and the proportion of production which goes for export. By comparing Figures 1 and 2, it can be seen that there are marked differences between roundwood and sawnwood in the patterns of production for export. In the 1970s half of all sawnwood exports originated in the Northwestern economic region, 17% was produced in East Siberia and 10% in the Urals.

Although the ports of Arkhangelsk, Igarka and Leningrad can be served by river transport, either by barges or by floating log platforms, ports along the Black Sea and the Pacific coast primarily rely on rail haulage. Most exports to Eastern Europe and three-quarters of the Finnish trade is delivered directly by rail, but most exports to Western Europe are sent out of the country by sea.

The Far East, however, accounted for only 4% of the sawnwood exports, a feature largely explained by the relatively small capacity of the sawmill industry in the area.

Export ports and their hinterlands The major forest resources and most of the saw mills in the Soviet Union are situated well inland, which makes transportation to the ports, especially to those of the Baltic and Black Seas, costly. Figure 3 shows for the major exporting ports the flows of roundwood and sawnwood exports and the internal transport links. From the transport cost point of view the White Sea ports (Arkhangelsk and others) and the Pacific ports are the best situated. However, the length of the shipping season also affects the performance of ports, and whereas Leningrad, the Black Sea ports and the southern ports of the Pacific coast (Vladivostok, Nakhodka, Vrangel, Posyet) work all the year round, Arkhangelsk is kept open for only 8 months and Igarka for only 3-4 months in the year.

Forms of Export Transportation Almost all Soviet timber is delivered to buyers by sea or by train, although small quantities of roundwood are exported to Finland by truck and by floating the logs down rivers. Most of the exported wood products leave the country from ports, but these are frequently linked to the logging area by railway. This means that in total the railways handle about 60% of the export trade. The ports receive half of all their export deliveries by rail (KANEVSKI and SHAITANOV 1975, p. 216).

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Figure 3. Export

Roundwood

flows flows

Motor sowmills Minor

exports

flows of Soviet timber.

208 A proportion of the sawnwood comes to the ports wet and unpacked, so that drying and packing facilities are needed. At present about 60% of exported sawnwood is packed, but the target is to raise this figure to 100%. At Igarka an 80% packing level has already been attained (NOVIKOV, 1980). Most export deliveries are carried by Soviet vessels, for example, at Arkhangelsk Soviet vessels accounted for 80% of the tonnage carried (LAPPALAINEN, 1974, p.401). The vessels carrying wood and sawnwood are mainly of two types, those with a loading capacity of 7000 m3 or more and those with a capacity of about 5000 m3. In addition, smaller vessels have been introduced which are able to take the cargo from river ports and deliver it to buyers by sea, so reducing trans-shipment costs (KANEVSKI and SHAITANOV, 1975, p.248) White Sea ports. Of all the ports exporting timber Arkhangelsk has undoubtedly the best situation from the cost point of view. Most of the sawnwood exported is sawn in 16 mills located within or in close proximity to the town and roundwood can be floated down the Dvina directly to the saw mills. Arkhangelsk is the biggest sawnwood port of the country and through it 1.8 million m3 is exported annually, mainly to Western Europe. Ports of minor importance are Onega, Mezen and Kern’. Baltic ports. In Leningrad and Vyborg there are no sawmills specializing in export products. Therefore both the sawnwood and roundwood must be transported there along waterways or by railways, mainly from the Carelian ASSR and Arkhangelsk oblast, but also from the more distant regions such as the Urals. Through Leningrad and Vyborg 0.9 million m3 of sawnwood and 1.5 million m3 of roundwood is exported annually, mainly to Western Europe. Other important Baltic ports are Riga and Ventspils, through which Latvian sawnwood is exported to Western Europe. Black Sea ports. Novorossiysk is the third major export port for sawnwood in the European part of the Soviet Union. The immediate hinterland of the port has poor forest resources, and no sawmills specializing in exports are located there. Inevitably the longer haulage distances involved in delivering the timber to the port places it at a cost disadvantage compared to those of the White and Baltic Seas. Most sawnwood comes to Novorossiysk from Northern Russia and the Urals, but 100,000 m3 is delivered annually from the Kansk sawmill in East-

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ern Siberia, which involves a 4500-km train haul. Sawnwood is shipped mainly to the Mediterranean area, but as the capacity of the port is too small to match the demand from this market it is also served by the northern ports. Because of this it has been suggested that the export capacity of Novorossiysk should be raised 1.5 times from the present level of 0.9 million m3. Ilyichovsk has become another important timber port on the Black Sea since the opening of a train ferry line to Varna, Bulgaria in 1978. Part of the 1.5 million m3 of timber cut annually by the Bulgars in the Komi ASSR is shipped through Ilyichovsk to Varna (KOCHUKOV, 1979). Arctic Sea ports. One and one-fifth million m3 of Siberian sawnwood is annually shipped to Western markets through Igarka (see NOVIKOV, 1980). Of this total 0.35 million m3 are sawn at mills at Igarka and the rest is transported there on the Yenisei waterway from the three big sawmills of Lesosibisrsk, namely Maklakova, Novomaklakovo and Yeniseisk (NOVIKOV, 1974). The logs to be sawn at Igarka can be floated down the Yenisei and Angara rivers from logging areas as much as 500 km away. However, although Igarka has the advantage of cheap river transport, the short shipping season causes major problems. Congestion at the port during the summer months and the difficulties involved in obtaining seasonal labour increase costs and make it difficult to raise export capacity. The Arctic Sea waterway has to be kept open with icebreakers during the shipping season in the summer. and this also adds to the costs. Other Artic Sea ports are of minor importance for wood exports. The most important of them is Naryan-Mar. Pacific ports. From the Soviet Far East roundwood and wood chip are the major export items; sawnwood remains of minor importance. Roundwood shipments have totalled 8-9 million m3 annually. Of this 1.7 million m3 are shipped from Nakhodka, Vanino and Vladivostok each handle 1.5 million m3 and Mago and Posyet take 0.5 rnj each (KANEVSKI et al., 1975, p. 251). Nakhodka’s neighbouring port of Vrangel has been equipped to handle wood chip exports and has an annual handling capacity of 800,000 tons (BRADEN, 1976, p. 8). Most of the wood exported is cut in the immediate hinteriand or the ports, but over 1 mil-

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lion m3 is annually hauled by train from Eastern Siberia, a distance of 3500 km. Such a length of haul is partly explained by the fact that outside the coastal zone the predominant wood species is larch, for which there is little demand; therefore marketable wood has to be brought from Eastern Siberia. Smaller shipments of wood are also exported the ports of Sakhalin and Kamchatka.

from

RaiIways are used in exporting to countries that have a common border with the Soviet Union, most notably the socialist countries of Eastern Europe and Finland. Connections with Finland are facilitated as the same rail gauge is used in both countries, but this advantage is not shared by the other neighbours of the Soviet Union. Rail exports are handled by four axle wagons, each with a mean carrying capacity of 53 m’ of roundwood and 61 m3 of sawnwood (MEI~NIKOV et af., 1977, p. 10). The largest quantities of roundwood go to Finland (3 million m3 annually) and to those Comecon countries which have small forest resources, such as the German Democratic Republic, Hungary and Bulgaria. Extremely long haulage distances are involved; on average timber exports are hauled 1600 km within the Soviet Union, to which must be added the distance from the border to the final market centre. It is evident that roundwood exports to socialist countries are not very profitable to the selling party. According to the current practice among Comecon countries, the buyers pay the world market price ‘franc0 border’ plus an excess contribution towards the cost of transportation within the Soviet Union. However, this excess covers only a small part of the total transport costs, the rest being carried by Soviet organizations. For instance, in 1977 the mean export price for roundwood was on average 37.6 rubles. If transported from the Western Urals to Chop at the Hungarian border, a distance of 2500 km, the freight cost was 5.2 rubles/m3 and if transported from Western Siberia (3000 km) the cost rose to 6.2 rubles/m-’ (cf. MELNIKOV et al., 1977, p. 37). To this should be added the opportunity costs imposed by such long hauls on an already congested and overburdened Soviet railway system. The length of haul for the roundwood

delivered to

Finland is shorter. Most of the wood comes from the Carelian ASSR and Arkhengelsk oblast but certain shipments come from as far away as the Komi ASSR. Thus, from the seller’s point of view, Finland seems to be a more profitable market than the Comecon countries given that the ‘franc0 border’ prices are approximately the same (the foreign trade statistics do not give information on this). About 15% of all the roundwood exported to Finland is carried by truck. For this, temporary border crossing points have been opened, through which roundwood can be transported more directly to buyers when the earth is frozen. Minor quantities of sawn logs (under 300,000 m3 in 1981) have also been exported by rail to China but the quantities involved have increased since the late 1970’s (cf. V~~S~i~YA YA TORCOVLYA SSSR. 1982).

Future Prospects

The logging volumes and sawnwood production have been declining for many years in the Soviet Union and no growth is foreseen for the 1980s. However, area1 shifts of production are taking place all the time. In the European part of the country logging volumes and sawnwood production have declined since the 1960s except in the Komi ASSR, where they have increased. The decline has been most vigorous in the Careiian ASSR and the Urals, and this trend is bound to continue as resources become depleted. Moreover, no growth is expected in the major exporting area, the Arkhangelsk oblast. Such decline will without doubt be reflected in the exports of roundwood and sawnwood through the White Sea, Baltic and Novorossiysk ports, as well as in the level and cost of railway deliveries to Finland and Eastern Europe. However, shipments through Iiyichovsk to Bulgaria by train ferry are likely to increase somewhat. In Siberia and the Far East logging volumes and sawnwood production will grow. In Eastern Siberia over 5 million m3 of new saw mill capacity is scheduled to start up by 1995 on the Yenisei River and on the Angara and its tributaries (cf. VOYEVODA, 1980, pp. 290, 307-308). A considerable part of this will probably be exported. Additionally, in the Far East new sawmill capacity is being built; for example, a new mill at Amursk

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has an annual output of 320,000 m3; it is expected that one-half of this increased capacity will be exported (DYAKONOV, 1977, p. 35). Moreover, the Baikal-Amur railway (BAM) will open up untapped forest resources and there are plans to build extensive wood-working capacity along it. However, the choice of an export route for Eastern Siberia’s sawnwood may prove problematic. Igarka would seem to be the most suitable port because of the availability of cheap river transport, but the port has already reached the limits of its capacity. Due to the short shipping period, thousands of seasonal workers have to be brought in to the town in the summer to undertake loading and packaging operations; not only does this increase costs, but as much of the labour is unskilled, the quality of the work suffers. In addition, the drying and packaging inadequate capacity of the port is already (REZERVY IGARKI, 1977). On the other hand, the potential for exporting the timber from ports or border stations in the west of the country is limited by the strains which would be imposed on the already overloaded Trans-Siberian railway and by the distances involved (some 5000-6000 km). The Baikal-Amur railway when completed will open up new possibilities. The distance between Ust’-Ilimsk and Nakhodka port using the Trans-Siberian railway is 4500 km, but the BAM, which will run to the port of Vanino, will shorten the haulage distance to 3700 km. Thus the BAM will provide the most likely future route for East Siberian timber, linking as it will a major producing centre with the Pacific ports (MOZHINA, 1980, p. 253). Difficult and expensive transportation hampers the realization of the full export potential of Soviet forest industries in world markets. The gradual shift of logging and the sawmill industry to the east rises transportation costs and lengthens delivery times. This lowers the competitiveness and profitability of the exports, at least when selling to European markets. The growing contribution made by the Eastern

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areas to total logging volumes and sawmill production will evidently favour the Pacific ports at the expense of those in the European part of the country. However, it is clear that direction of timber transport flows and the choice of export routes will also depend on the future spatial patterns of demand.

References BRADEN,

K (1976) The role of trade with the United

States and Japan in the development of Siberia’s forest resources, Paper presented at the 72nd Annual Meeting, Association of American Geographers. DYAKONOV, F. V. (1977) BAM-kompleks krupnykh dolgosrochnoi narodnokhozyaistvennykh problem perspektivy, In: Baikalo-Amurskaya magistral, Voprosy geografii 105. Moskva. GLOTOV, V. V. (1977) Razmeshchenie lesopromyshlennogo proizvodstva. Moskva. KANEVSKI M. V. and SHAITANOV G. J. (1975) Lesnoi eksport SSSR. Moskva. KOCHUKOV, A. (1979) Tranzit na Varnu, Lesnaya promyshlennost, 1.5.1979. LAPPALAINEN, R. (1974) Suomalaisen sahamiesretkikunnan vierailu Arkangelissa. Paperi ja Puu No. 4. MELNIKOV, V. I., KANTOR S. I. and TITKOV P. YE. (1977). Transportnye zatraty pri perevozke lestransportom. zheleznodorozhnym nykh gruzov Moskva. MOZHINA V. P., (ed.) (1980) Ekonomicheskoye razvitie Sibiri i Dalnego Vostoka. Moskva. NARODNOJE KHOZYAISTVO RSFSR V. 1980 G. (1981) Moskva. NARODNOJE KHOZYAISTVO SSSR V. 1980 G. (1981) Moskva. NOVIKOV, V. (1974) Igarskie paradoksy, Lesnaya promyshlennost, 12.12.1974. NOVIKOV,V. (1980) Navigatsiya na Yeniseye, Lesnaya promyshlennost, 12.6.1980. REZERVY IGARKI (1977) Lesnaya promyshlennost, 5.3.1977. ARKANGELISSA (1977) SAHAUSTOIMINTAA Puumies, 411977. VNESHNYAYA TORGOVLYA SSSR V. 1980 G.(1982) Moskva. VOYEVODA, I. N. (1980) Lesnaya i lesopererabatyvayushchaya promyshlennost Sibiri. Novosibirsk.