- The Washington Times - Wednesday, July 13, 2016

Anti-terror legislation recently signed by Russian President Vladimir Putin could cause shipping costs to surge and drive independent couriers out of business, a postal expert predicts. 

Included within a package of amendments approved by Mr. Putin last week is a measure that will require postal service providers to inspect letters and parcels for weapons, explosives and other contraband. 

The nation’s official mail carrier, Russian Post, is currently responsible for about 70 percent of the market share, and believes the cost of purchasing new inspection equipment for its 42,000 branches could run upward of 500 billion rubles, or roughly $8.7 billion, the Vedomosti newspaper reported Wednesday.

Another 100 billion rubles, or about $1.5 billion, would be needed annually for upkeep, the newspaper added. 

The head of the National Association of Distance Selling, a Russian trade group that represents employees of the shipping industry, told the paper that similar costs will likely have a devastating affect on the nation’s independent logistics companies. 

Purchasing specialize equipment such as X-ray machines in order to comply with the recently signed law could double shipping costs and cause online purchases to drop by as much as 40 percent, said the trade group’s president, Alexander Ivanov.

Russian customers will be unlikely to purchase goods from the internet if they are suddenly expected to pay more for shipping than the products themselves, Mr. Ivanov told Vedomosti.

From there, he said, a decrease in orders will inevitably lead to a second wave of price hikes. 

Russian Post, however, may be able to stay afloat by obtaining loans through the government, Mr. Ivanov said.

Approximately 600 separate logistics company are currently operating within the Russian market, and “it is unlikely that the state will support each of them — with the exception of Russian Post,” he said.

If the national postal operator is provided government assistance, he continued, “private logistics companies will be forced to withdraw from the market.” 

Speaking to the same newspaper, however, Dmitry Manannikov, the security director for shipping firm SPSR Express, said he has doubts the legislation will be as disruptive as feared, noting that couriers won’t be required to install new equipment at every facility, but only the ones where packages are sorted before being shipped.

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