Russian customs dispute illustrates familiar problem

The dispute over road freight and customs into Russia is a story characterised by the sort of confusion all too familiar to logistics operations in the country.

The Russian ‘Federal Customs Service’ had proposed the effective repeal of the TIR (Transports Internationaux Routiers) agreement which underwrites customs duties for goods passing through, but not destined for, a particular state. This agreement enables trucks to avoid having their load inspected at every border they pass through as well as simplifying the application of customs duties.

Earlier in the year, Russia obliquely suggested that it would end the application of the agreement and introduce a new system including having customs duties under-written by new private sector entities. It was unclear why Russia had chosen to do this and how the new rules would be applied, however European truck operators became concerned that the consequence would be the collapse of traffic between Russia and its European neighbours.  After intense negotiations between the EU and the Russian customs, it was announced last week that the plan to end the TIR agreement has been suspended until the beginning of December.

It remains unclear why Russia sought to end what is a fairly basic international trade agreement. Previously working effectively, the Russian authorities had already begun to inspect loads in transit moving out of Lithuania. It has been speculated that the Russian government had an ulterior motive connected to tax revenues, or alternatively in-fighting within the Russian bureaucracy; however substantiating these suggestions is very difficult.

Road traffic between Poland, Belarus, Lithuania and Russia has often been problematic, with occasional delays often triggered by underlying political issues. Logistics service providers are forced to build flexibility into their planning, with movement out of the Finnish ports augmenting traffic across out of the Baltic States. However, these sorts of issues also illustrate that bureaucracy in Russia is still a significant obstacle to the smooth operation of supply chains into and out of the country.