Russia Starts Building Ships for North-South Trade Route to Iran

The first block for a new class of Russian domestic containership that is also capable of carrying dry bulk cargo was laid down at the Lotos Shipyard, part of the state-owned United Shipbuilding Corporation. 
In addition to the unique design, the shipbuilding corporation is reporting the ships will be a key contributor to Russia’s plans for the North-South International Transportation Corridor and proof that Russian shipbuilding is proceeding despite the sanctions, The Maritime Executive reported.
Construction is beginning on the first of four vessels that will lead the class. The vessels measure approximately 463 feet in length and have a 55-foot beam and depth of up to approximately 20 feet, giving them the maximum dimensions to transit the Volga-Don Canal. The 60-mile-long waterway, which opened in the 1950s, makes it possible to sail from Saint Petersburg to the Caspian Sea. 
The design for the vessels was developed by the design bureau of USC, Vympel Design Bureau in Nizhny Novgorod, and they are saying it is unique because in addition to containers, it can carry any type of dry cargo, including grain, timber, lumber and general cargo in two holds. The vessels will also have a large capacity for oversized cargo. The capacity will vary between 5,000 tons for river transport, where it is limited to a draft of approximately 12 feet, and 9,200 tons for sea transport. 
Propulsion for the vessels will consist of two medium-speed diesel engines each with 1,200 kW and two rudder propellers with a speed of up to 10 knots. There will also be two auxiliary diesel generators of 400 kW, which will be enough to power 60 refrigerated containers.
According to the Ministry of Industry, Trade and Energy of the Astrakhan Region, the plan is to build a total of 21 vessels for the North-South trade. Officials have said that at least 45 ships of the Volga-Don Max class are needed longer term for the new corridor. Each vessel is expected to cost about $22 million to build.
Officials of USC highlighted the start of the project with the keel laying on May 4 as evidence of the strength of Russian shipbuilding. The Lotos Shipyard where the vessels are being built was one of 28 subsidiaries as well as United Shipbuilding Corporation designated by the US Department of State in April 2022 as being part of the Russian defense establishment. The sanctions implemented in response to the war in Ukraine prevent US companies from working with, financing, or providing supplies to the sanctioned shipyards.
The new vessels are part of an agreement highlighted by Russia to build trade on the Caspian Sea. The corridor stretches some 4,500 miles and links to Iran’s rail and road networks. The endpoint is the port of Bandar Abbas and from there, cargo will also be able to continue by sea to India. Branches along the route also make it possible to send cargo to Azerbaijan, Kazakhstan and Turkmenistan. 
Russian officials reported that with the contribution of these new vessels, trade will grow dramatically along this route. They said 17 million tons move along the route currently, which will grow to 32 million tons by 2030.
The first of the new vessels is due to enter service in 2024. Two ships of the class will be delivered during the first year and two additional ships in 2025.

New Transcontinental Trade Route

Russia and Iran are building a new transcontinental trade route stretching from the eastern edge of Europe to the Indian Ocean, a 3,000–kilometer (1,860–mile) passage that’s beyond the reach of any foreign intervention.
The two countries are spending billions of dollars to speed up delivery of cargos along rivers and railroads linked by the Caspian Sea. Ship–tracking data compiled by Bloomberg show dozens of Russian and Iranian vessels, including some that are subject to sanctions, already plying the route.
It’s an example of how great–power competition is rapidly reshaping trade networks in a world economy that looks set to fragment into rival blocs. Russia and Iran, under tremendous pressure from sanctions, are turning toward each other, and they’re both looking eastward, too. The goal is to shield commercial links from Western interference and build new ones with the giant and fast–growing economies of Asia.
New routes via Iran will quicken trade by thousands of kilometers.
“This is about establishing sanctions–proof supply chains all the way through,” says Maria Shagina, an expert on sanctions and Russian foreign policy at the London–based International Institute for Strategic Studies.
The emerging trade corridor would allow Russia and Iran to shave thousands of kilometers off existing routes. At its northern end is the Sea of Azov, which is bracketed by the Crimean Peninsula, Ukraine’s southeastern coast, including the Russian–occupied port of Mariupol, and the mouth of the River Don.
At an economic forum in September, Russian President Vladimir Putin underlined the need to develop the ship, rail and road infrastructure along the route that “will provide Russian companies with new opportunities to enter the markets of Iran, India, the Middle East and Africa, and will facilitate supplies from these countries in return.”
Shagina estimates Russia and Iran are investing as much as $25 billion in the inland trade corridor, helping to facilitate the flow of goods the West wants to stop. 
There are compelling economic reasons for the new transit route.
Ships sailing the Don and Volga rivers have traditionally traded energy and agricultural commodities; Iran is the third-largest importer of Russian grain, but the range is set to widen. 
The two countries have announced a raft of new business deals that cover goods including turbines, polymers, medical supplies and automotive parts.
Russia needs to compensate for the sudden breakdown of its commercial ties with Europe, which before the war was its biggest trade partner, as well as finding workarounds for US and European Union sanctions.
“With European transport networks getting closed off, they’re focused on developing alternative trade corridors which support Russia’s turn to the East,” says Nikolay Kozhanov, a Persian Gulf expert at Qatar University who served as a Kremlin diplomat in Tehran from 2006 to 2009. 
“You can impose controls over sea routes, but land routes are difficult to watch. It’s almost impossible to track them all.”

Iran Repairs Russian Cargo Ship Damaged on Volga River

The acting head of the Iranian Marine Industrial Company (IMIC), Meysam Rayatazad, said in late 2022 that a Russian bulk carrier was being repaired in Iran after being damaged by icebergs on the Volga River.
“A Russian vessel entered a shipyard owned by the IMIC’s Caspian Complex on Dec. 25, for repairs for the first time,” Tasnim News Agency quoted Rayatazad as saying on Dec. 28.
He added that the Islamic Republic intends to take on 20% of all ship repairs in the Caspian Sea.
The 1,400-ton, 5-meter-high, 108-meter-long and 14.2-meter-wide bulk carrier suffered various damages on the Volga River.
Iran Marine Industrial Company (known locally by its Farsi acronym SADRA) is affiliated with the Islamic Revolution Guards Corps, which is building Aframax 2 tankers for Venezuela, according to Caspian News. 
Russia overtook Iran as the most sanctioned country in the world following its invasion of Ukraine. In response to the sanctions, Moscow is expanding its transportation volume through Iran and sees the Caspian Sea as a safe and cheap route for trade with Tehran.
Iran recently bought eight vessels as part of plans to expand trade with Russia through the Volga River starting in the spring of 2023. Russia is finalizing rules that would give ships from Iran the right of passage along inland waterways on the Volga and Don rivers, according to Iran’s Maritime News Agency.