Russians face rising prices as border checks cause major delivery delays

Russian consumers are likely to see prices rise as long queues of lorries have built up at the border with Kazakhstan following the introduction of tighter customs inspections. The delays are disrupting supply chains and increasing costs.

Source: Russian media outlet Retail.ru

Details: Around 10,000 vehicles are currently backed up at the border, where checkpoints can only process about 100 a day. Infrastructure at the crossings is not equipped to handle such volumes, and lorries are occupying all nearby car parks and even roadside verges.

Quote: "Transit controls on the Russian-Kazakh border have been tightened simultaneously by both sides. Up to 99% of lorries heading into Russia are being inspected. High-risk categories are freight containing electronics, sanctioned goods, dual-use items and branded products."

More details: Logistics firms first began noticing tighter checks by Kazakhstan in late spring. At the time, border crossings could take up to three days. Delays on the Russian side are linked to efforts to curb grey imports and illegal deliveries. By October, it could take up to a week to cross from Russia into Kazakhstan.

Experts warn that these disruptions are extending delivery times and driving up costs for transport and warehousing, which will soon be reflected in consumer prices.

Quote from a logistics company: "The tighter import controls are not a temporary problem but a lasting trend.

There are no alternative routes through other crossings, since the tighter checks are systemic across all land borders, including Zabaikalsk and Primorye. Controls will intensify, and grey import schemes will become riskier."

More details: Businesses complain of longer lead times and growing uncertainty, particularly among online marketplace sellers importing goods from China. They say that official import procedures are doubling the cost of goods.

Industry representatives said transport companies are passing the higher costs on to new shipments, and sooner or later this will affect final prices.

Background:

• Earlier, Ukraine's Foreign Intelligence Service reported that Russian customs officials had been ordered to make up for budget shortfalls by imposing heavy fines on small importers of Chinese goods, leading to kilometre-long queues of lorries on the borders with China and Kazakhstan.
• Russia's restrictions on the transit of dual-use goods have led to a sharp decline in the flow of rail freight from China to Europe.
• Ukraine's Foreign Intelligence Service has also reported that Russia is increasingly "paying" its wartime allies in territory. Lacking the resources to develop the vast Far Eastern Federal District, Moscow is opening up the region to foreign expansion.
• Meanwhile, Russia's Ministry of Finance has announced a new measure to shield the state budget from volatile oil prices and Western sanctions targeting energy exports: a tax hike.
• The Russian government is considering raising the value-added tax (VAT) rate to curb the budget deficit and preserve reserves.
• Russia's economy is facing deeper problems than officials admit, with analysts warning that a full-scale banking crisis could erupt within a year.

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