According to the Russian magazine Ogoniok, the odd business enterprise called “chelnoki” is coming to an end. Ogoniok‘s recently published study expounds on this trade industry, created by perestroika and strengthened by the collapse of the Soviet Union. With the recent introduction of a government decree limiting the amount of tax-free trade goods for Russian citizens, these people, called smugglers by some or pioneers into a brave new world of business by others, will eventually disappear from the historic map of the new Russia.
Chelnoki (the Russian word for “shuttles”) received their name from a technical or transportation device which performs repetitive back and forth motions. This large group of people consisted of former government employees, engineers, workers, teachers and managers who had lost their jobs and could not make a living during the chaotic years after the collapse of the Soviet Union. The inefficient Soviet consumer goods distribution system had ceased to exist and the chelnoki filled the gap by supplying Russian citizens with a wide range of goods (mostly clothing, shoes, toys and cosmetics). This newly shaped group of businessmen traveled frequently to China, Turkey, Poland and other countries and purchased merchandise in commercial numbers. They then carried or shipped it themselves for sale in the open air markets throughout Russia. The most common approach was a husband and wife team going together for a “shopping tour” and bringing back 220 pounds of tax-free trade goods for reselling.
The story of chelnoki began almost 20 years ago when the Soviet government, at the dawn of perestroika, decided to allow individuals to open private enterprises. In 1987 the first “cooperatives” -- small businesses -- started to openly sell imported goods at Moscow’s open air markets.
The supply side was ready to partake. In 1989 the gigantic Bobe Market was opened in Bangkok (Thailand) specializing in the manufacture and sale of cheap, good quality clothing, blue jeans, toys and shoes to Polish and Russian traders. These folks were carrying and shipping bulky suitcases with goods across the Soviet borders into a country on the verge of collapse. It was at that time that the Russian word “chelnoki” became a household name in Chinese, Turkish, Thai and many other languages.
In 1991 the Soviet Union fell apart and fifteen newly created states opened their borders, allowing citizens to travel abroad without limitations. The chelnoki population exploded into three major destinations – China, Turkey and Poland. Chinese commerce was obviously the most profitable, and soon the Trans-Siberian train from Beijing to Moscow turned into a bazaar on rails. The Chinese authorities, outraged with the ongoing mayhem around ticket booths at the Beijing Central Station and the enormous size of the luggage on passenger trains, introduced a 35 kilogram per traveler baggage limit.
So the chelnoki exchanged trains for planes. In the beginning of 1992 the first charter flights to Istanbul (Turkey) and Alexandria (Egypt) took off from Moscow’s Vnukovo airport. In three months the volume of air cargo increased 12 times, giving a boost to Moscow’s largest airport, Domodedovo, which was in a state of hibernation for the previous five years.
At the same time an extensive network of Russian freight forwarders opened in Bangkok (Thailand) catering to the chelnoki and sending their shipments to any destination in Russia and the former Soviet republics. These shipments, registered to private citizens and small businesses, contained the most desirable consumer goods, from clothing, shoes and cosmetics to toys and electronics.
In 1993 Russian chelnoki were exploring the fur and gold market in Dubai (United Arab Emirates). Later that year, others discovered Italy as a source of higher quality clothing and shoes to offer to the growing affluent class of “new” Russians. It was a sensation in Europe when charter flights with Russian chelnoki on board were allowed to land at the NATO airbase in Rimini (Italy).
The year 1994 saw the peak of chelnoki trade. According to the official statistics for that year, the total volume of this commerce had reached $10 billion. There were over 2000 businesses in Moscow alone specializing in the organization of so called “shopping” tours across the globe for the chelnoki. The estimated number of people involved in this industry reached 4 million.
In 1996 the Russian government, apparently under pressure from large trading houses, introduced the first law restricting the amount of tax-free trade merchandise allowed to private citizens. With the limit now at 50 kilograms (110 pounds) per person, it was the beginning of the decline of the chelnoki population, which started gradually losing ground. The 1998 economic collapse put about half of the chelnoki out of business, with another third turning to wholesale commerce. The profits fell to a meager 60 - 70% (the peak years having reached 200 - 300%).
Finally, in the beginning of 2006, the Russian authorities successfully put the last nail in the coffin of chelnoki trade by further reducing the tax-free trade limit to 35 kilograms (77 pounds).
There remains one tribute to this once powerful movement -- not in Russia but in China. Just fifteen years ago Heihe was a small Chinese village with a couple of dim lights visible at night. It contrasted sharply with the large Russian port of Blagoveschensk situated across the Amur river. This contrast still endures, except that now Heihe is the glittering city with skyscrapers, modern roads and shops. Blagoveschensk, on the other hand, is shabby and economically depressed, its people still going to China for food and clothing.
