What's happening with Russian economy? Logistics market is a good indicator. Consider the freight rates. Since late February they fall by 30-40%. For example, according to the freight exchange ATI.SU rates on Moscow-St Petersburg direction fall by 34,3% (not🧵) 
Moscow - St Petersburg highway connects the largest city of the country with its main seaport. It is for Russia what Camino Real (Mexico-Veracruz) was for the Colonial Mexico. With the St Petersburg seaport traffic decreasing almost by half, there's much less to deliver
How much did the freight rates fall across Russia? Estimates vary, plus rates on different directions probably fall unevenly. Most common estimates would vary between 30-40%, with some (Oboz company) giving as low estimates as 25% and some (Deliver company) giving as high as 50%
The fall in the freight rate reflects the general decrease in the interregional trade. There's now much less to ship = the rates are falling. And yet, the actual costs of freight are skyrocketing for the shortage of trucks and spare parts. The cost of the latter increased by 70%
The import dependence of Russian truck companies may look surprising considering that on paper Russia import substituted greatly. Theoretically, most Russian trucks are either Russian (Kamaz, GAZ, ZIL, Ural) or Belarusian-produced (MAZ). Consider the figures for December 2021
In practice Russian car industry is fully import dependent. Consider this interview with a leader of a trade union on the AvtoVAZ automobile manufacturer. All the machine tools, all the instruments, all the equipment is imported. And it is imported *not* from China
Many misunderstand the role of China in the world economy. They confuse it being the largest industrial exporter with being the most important exporter of *everything*. For example it exports far less machine tools than one would expect. Germany is more important in this respect
What information can we draw from the Russian freight market data? First of all, we are seeing as the enormous country is gradually losing its cohesion. Consider that all three means of transport: airways, automobiles and even the railways are heavily import dependent
The situation with freight rates falling by 30-40% and the spare parts prices increasing by 70% is unsustainable especially considering that the average truck in Russia is 21 years old. Very soon communicating or trading with faraway provinces will turn into a major problem
Furthermore, the freight data allows us to track the main smuggling channels that Russia is now using. While demand on most directions is falling there is one direction with a skyrocketing demand (more than +100%). It's Georgia. Ergo, it is the major smuggling channel now
I took the figures on the Russia freight market dynamics from here. Overall, I consider the RBC to be a highly reliable source on the Russian economy. End of not a 🧵 rbc.ru/business/06/06…
I cut the fragment with the AvtoVAZ trade union leader talking on his factory's import dependency from here. You can watch the material in full, it presents the position of workers and trade union leadership. I think it's good
PPS To my best knowledge the most astute, informed and unbiased overviews of Russian economy and its dynamics can be found in Russian Central Bank reports. They are amazing and incredibly informative
• • •
Missing some Tweet in this thread? You can try to
force a refresh
