The Transport strategy of St. Petersburg until 2025

2. Analysis of TLC Development Trends in 2004-2009

The TLC development in 2004-2009 included two stages.

The first stage (2004– third quarter of 2008) witnessed a progressive advance in industrial, commercial and construction sectors of economy of Saint Petersburg, along with increased export/import and transit transportation that ensured a significant growth of operational volume terms in all TLC sectors.
In 2004-2008 the total volume of cargo transshipment and transportation in TLC increased from 205 million tons to 240 million tons. The total cargo turnover of sea port Big Port of Saint Petersburg (hereinafter referred to as Big Port of Saint Petersburg) went up by 17 percent and equaled 59.9 million tons in 2008, among that container turnover increased 2.6 times and reached 1.98 million TEU in 2008. The volume of local railway freight operations in Saint Petersburg (loading/unloading at the railway stations situated within the boundaries of Saint Petersburg) went up by 16 percent to 59.9 million tons in 2008. The volume of motor freight transportation rose by more than 20 percent and exceeded 110 million tons in 2008. Passenger traffic in Pulkovo aeroport went up by 63 percent and equaled 7.07 million people in 2008.

The area of terminal and warehouse infrastructure facilities in Saint Petersburg increased by 22 percent and reached 6,596 thousand sq. m. in 2004-2008. Furthermore, the area of Class A and B+ warehouse facilities went up 4.3 times and reached 1,243 thousand sq. m.

This stage demonstrated excess of demand over supply in many segments of transportation/logistics market, as well as large volumes of investment in TLC both on part of the state (development of road and street network, railways, sea terminals and so on), and on part of privately-owned companies (construction of warehouse facilities in accordance with the established procedure, purchasing of motor and railway rolling stock and so on).

The beginning of the second stage (fourth quarter of 2008 – fourth quarter of 2009) is connected with the world economic crisis that directly influenced TLC development.

The period between the fourth quarter of 2008 and the first half of 2009 showed a serious decrease in operational volume terms in all TLC sectors that was followed by decline in rates of TLC companies services and a drastic fall of investment activity in transportation and logistics.
During the first half of 2009 the total cargo turnover of Big Port of Saint Petersburg  declined by 23.5 percent if compared with the same period in 2008, including
container turnover that decreased by 38.1 percent.

The total volume of local railway freight operations in Saint Petersburg in the first half of 2009 reduced by more than 26 percent, if compared with the same period in 2008. Reduction of railway transportation volumes in Saint Petersburg was 40.8 percent for internal communication and 11 percent for foreign trade transportation.
During the first half of 2009 Pulkovo aeroport passenger transportation decreased by 12.6 percent, cargo transportation – by 29.2 percent, if compared with the same period in 2008.

This period showed a sharp decline in demand for warehouse services. The occupancy rate of newly-built storage facilities in the first half of 2009 was 30-50 percent on average. The decreased demand in the warehouse facilities market caused 40 percent rental rate reduction.

During the second half of 2009 cargo and passenger turnover decline rates slowed down. In 2009, in comparison with the same period in 2008, cargo turnover decrease in Big Port of Saint Petersburg reached 15.9 percent, among that container turnover – 22.1 percent, the decrease in Pulkovo aeroport passenger traffic equaled 4.4 percent.

The recovery of transportation/logistics services market is unsteady in different segments. This is going to cause a new structure of this market to form after the crisis.