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Arctic trade and logistics centres: Lessons from Yakutia on transforming Polar logistics

Bananas for the tundra, venison for the city

14 september 2023

On 11 September, the fifth trade and logistics centre was opened in Srednekolymsk, within the Arctic zone of Yakutia. The grand opening ceremony was live-streamed at the Eastern Economic Forum during a discussion on the potential for developing cargo delivery infrastructure in the Arctic under the theme 'Trade and Logistics Centres in the Arctic: A New Opportunity for Developing Northern and Arctic Territories.' This significant event not only impacts the Sakha Republic but also the entire AZRF—Yakutian innovations could set a precedent for establishing a global delivery network for remote Arctic settlements.

By 2002, when the company Yakutopttorg was established, the issue of cargo delivery to Arctic settlements in Yakutia had become extremely critical. In the Polar regions, there is a very limited window for cargo transportation, which is not season-dependent. For example, during summer, the tundra transforms into a swampy terrain that is difficult for tracked all-terrain vehicles to navigate. Transporting cargo on them is unfeasible, hence it is shipped—through storms, fog and rain that obscure sandbanks and shallow parts of the riverbed, the freight fleet navigates to its destinations. This process is slow, quite risky and at times outright impossible.

Arctic winters are no picnic either—traversing the 'winter road' in severe cold poses a threat to both the driver and the vehicle. In the meantime, significant distances have to be covered, for example, the journey from Srednekolymsk to Yakutsk spans about 1,900 km on challenging roads. In the settlements themselves, there's hardly any space for storage, with the wear and tear of the storage facilities reaching about 90% in the early 2000s. These issues had to be addressed by implementing a fundamentally new approach—the introduction of trade and logistics centres. These are unique hubs where goods are delivered and then distributed to various settlements. Currently, there are 5 operational trade and logistics centres in the Arctic region of Yakutia. These centres serve Ust-Yansky, Nizhnekolymsky, Anabarsky, Srednekolymsk districts, as well as Abyisky ulus. By the end of 2023, a TLC will be operational in Zyryanka settlement of Verkhnekolymsky district. Subsequently, trade and logistics centres will be established in Zhigansky, Bulunsky, Verkhoyansky and Momsky districts. By 2025, similar institutions will be set up in Alaihovsky, Eveno-Bytantaysky and Oleneksky districts, thereby covering the entire Arctic territory of Yakutia.

Since 2002, an irreducible food reserve has been opened at Yakutopttorg's main hub, enabling independence from the republic's capital. Now, there's no need to wait for shipments from the 'mainland,' as halfway there are already large, modern warehouses of their own. For example, in Srednekolymsk, the TLC facility spans 578 m² and houses modern climate-controlled vegetable storages capable of storing up to 125 tons of fresh vegetables, a refrigeration chamber for perishable goods with a capacity of up to 25 tons, warm warehouses for 80 tons and a cold storage that can accommodate up to 500 tons of products. Constant access to goods significantly lowers the price and broadens the range—for the first time in a long while, fresh tomatoes, kefir and grapes have become available in the Arctic. Today, Yakutopttorg supplies 80% of flour and sugar to the Arctic regions of Yakutia, along with 12 types of socially significant goods.

Grigory Ledko, President of the Russian Association of Indigenous Peoples of the North, states that these centres have become a crucial link in executing the law on northern supply—they are the destinations for delivering goods to the northerners. Goods are transported from these TLCs to the settlements using small aircraft, specifically AN-2 planes, occasionally helicopters and even parachuted down. Yakutia's leadership envisions a future where all forms of transportation harmoniously coexist, enabling access to remote regions—there will be space for ships, all-terrain vehicles and any other innovative engineering solutions.

However, these TLCs are intended to serve not only as storage and distribution hubs for products from the 'mainland' but also as marketplaces where locals can sell their own produce. Each centre is equipped with facilities for primary processing of venison, fur, fish and wild herbs.

These TLCs are evolving into multifunctional hubs, providing Arctic residents with opportunities for economic engagement with the rest of the country, without the need to individually tackle the uncertainties and risks of polar logistics. In the long run, it is anticipated that Yakutia's successful model will be replicated across all remote regions of the AZRF—its positive trajectory validates the idea's efficacy and efficiency.

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