Compensation for Ferry Transportation Costs of Cargo

The government has adopted a decision that will make logistics infrastructure related to cargo transportation more accessible for Armenian freight forwarding companies, reducing barriers, promoting the export of Armenian products to international markets, and significantly increasing cargo transportation volumes.

The compensation for costs associated with ferry and/or vessel transportation will serve as a new incentive for the Armenian economy and ensure fair competition with the Upper Lars route.

According to the justification, the use of ferries and/or vessels as an alternative to the Stepanavan-Lars land route is more expensive for freight forwarders, which can reduce the competitiveness of Armenian products in foreign markets. Therefore, compensating for costs incurred from using this alternative mode of transportation could notably reduce existing barriers, facilitating an increase in transportation efficiency.

Decisions to initiate ferry communication were adopted by the government in 2022. However, since their adoption, several significant changes have occurred, preventing the implementation of the initiative.

The decision proposes compensation for the costs of ferry and/or vessel transportation as an alternative to the only operational land route from Russia to Armenia, aiming to mitigate challenges in the Armenian freight transport sector.

Studies have shown that costs increase with ferry and/or vessel cargo transportation compared to the Lars route by the amount of expenses incurred for ferry transportation.

It is planned that the amount allocated to the operator for providing cargo transportation services to beneficiaries on the Novorossiysk-Batumi-Novorossiysk and/or Poti-Kavkaz-Poti routes will be set at 120,000,000 AMD (one hundred twenty million Armenian drams) per voyage, regardless of the number of beneficiaries served during that voyage.