The 2nd International Conference TransCont 2019 was held on November 18. Over 120 delegates from Russia, Belarus and Estonia met in St. Petersburg to discuss the prospects for the industry.
The first part of the conference day was chaired by Aleksandr Kuznetsov, DScTech, ports and cargo terminals department professor, Admiral Makarov State University of Maritime and Inland Shipping. Opening the plenary session, Aleksandr Lvovich introduced the development trends of global and domestic container cargo distribution systems and shared his own vision of the situation with a retrospect of 100-year existence of containers. Almost philosophic approach to the range of problems set the pace to the entire event. Furthermore, both optimists and pessimists agreed on one thing – container business is planning to develop: we will see creation of vessels for 50 thousand TEU and witness a great many changes in equipment and technologies.
Andrei Ivanov, HC Logoprom General Director, also could not resist the temptation of reflecting on history which though cannot afford any what-ifs, but still, it would be so interesting for everybody to know what could have happened if USSR had not collapsed and which prospects it would have granted to container and the whole transport business of the huge Power… In their turn, Logoprom are trying to save and expand what is left from that great heritage.
Aleksei Timofeev, General Director of Global Logistic, addressed the audience in a practical language of technical and economic calculations and offered an efficient mechanism for transportation cost reduction which aroused a lively interest and even disputes in the conference hall. It was again the container as a cost reduction method which became a hero of the day. The patented modular handling dolly Globalload engineered and manufactured by Global Logistic (St. Petersburg) sparked interest of many participants. Discussion of advantages of this invention continued on the sidelines.
The second session was opened by Mikhail Burmistrov, Director of Infoline-Analytics. The specialists ran a serious study on logistics companies and awarded leadership in INFOLine Logistic Russia TOP rating to RZD Logistics. UTLC ERA took the second place. With an increase of container transit (in 2018 container transit transportation China—Europe—China rose by 34%, and at year-end 2017 — by 80%). UTLC managed to raise revenues by 63.8% and increase container shipments by 60% – to 280.5 thousand TEU. Above-average revenue growth among the rated companies (20.5%) was also demonstrated by: Lorus SCM (42.9%) and Kuehne + Nagel (32.9%), Baikal-Service (27.5%), GEFCO (26.5%), Schenker (26.3%), Spetstransgroup (21.4%), as mentioned in the study.
Kirill Nikoda, expert of Gazprombank economic forecasting center, analysed the tank container transportation market and highlighted that despite just 1-2% share of tank containers in total container traffic, this segment is showing high growth rates. Even today the market volume is evaluated at USD 10-15 billion. Its further development will be associated with implementation of technological innovations: first, the focus will be on gradual switch to composite materials for tank container manufacture. Secondly, the tank container transportation market will develop under paradigm of transition to Smart Logistics.
According to the expert, containerization involves a wide range of cargoes: for instance, containerization of chemical cargoes is far exceeding that of liquefied gases as of today. In 2018 caustic soda freight volumes for the first time rose higher than the same of sulphuric acid.
Since 2015 the share of caustic soda freight in tank containers increased tenfold. A similar example can be given with regard to sulphuric acid – its containerization doubled from 6.6% in 2015 to 12.3% in 2018 and continues to grow.
In 2019 explosive growth is also demonstrated by transportation of sulphuric acid, propane-butane and nitrogen fertilizers. Volumes of soda transport in tank containers will increase the tank wagon volumes in 2019.
Tank containers topics stirred a vivid interest and was about to translate into separate session. However, the agenda also included reefer transportation – an interesting subject with equally desirable prospects. Exactly this was elaborated by representatives of Aurora-Logistics – Vitaly Ilchenko, development director for transit, export and import transportation, and Vyacheslav Anisimov, head of distribution department.
The experts are positive that container reefer transportation market is currently going through its rebirth, as all other fleets have become obsolete. Reasonable policy of RZD could improve the situation with transportation in refrigerated containers. Still, the fish on our counters are insanely expensive because “approximately 50% cost of fish delivery from the Far East is the railway tariff”. Railway reefer freight can become competitive owing to: container trains, reasonable tariff policy by OAO RZD, ground-breaking power supply technologies, state-of-the-art monitoring technologies and transport process optimization – as was summarized by the speakers.
Anatoly Romanov, Commercial Director of Neptumar, took the floor to tell the delegates about how expensive an importer’s error may cost during customs clearance.
The afternoon session was chaired by Vladimir Matyagin, President of the National Road Freight Transport Association GRUZAVTOTRANS.
The heated debate in this part of the conference spread around eternal headache caused by weight and dimension control and around “old painful issue – transit of cargoes destined for Russia through the Baltic”. Complaints made by the audience included lack of professionals in the Ministry of Transport who really understand all specifics, and imperfect laws imposed on the market, which eventually impacts the entire country’s economy.
In reply to this, Gruzavtotrans President suggested that all specialists who really care about transport should actively participate in National Association task force activities aimed at weight checking issues which are discussed with the carriers. There is also a Program established and applicable on the basis of Association – its implementation requires participation of as many as possible transport market member companies.
Unfortunately, the efforts of business community only will never be enough to resolve the transit issue. Aleksandr Zanin, board member of Hermes Guild of FEA Professionals, was speaking of his distress about all those losses which the budget of our country had to sustain in the current situation.
“We need to work at the increase of cargo turnover in our ports, – the expert is confident. – Our target is to get these cargoes back to the Russian ports!”
Statistics is free from emotions: according to the RF FCS, more than 3 million tons of freight went through the Baltic countries, including 200 thousand containers. This means 105 ship entries. In conversion it will amount to RUB 13 billion – we could have earned on this import only. Plus export: export from Russia reaches 33 million tons, we could have earned 17 billion more while handling the same. Which means that we are voluntarily giving away 30 billion – we invest in the Baltic economy and development of their, not our ports. Yet handling of containers is not an intra-port process only. They are transported and delivered to a carrier’s warehouse – these are huge investments, taxes and workplaces.
“And what is the reason? Which solutions are viewed by business? One of them is service! Its quality in our ports is not adequate enough. For example, only port of Bronka is capable of reloading the freight from containers to other modes of transportation. In other ports this service is not available as a class, and even if you beg them you will be charged so much that you will send the cargo back…”
Inaccurate alignment of services operating in our ports – plant control, veterinary control – all these matters bring about extra downtime and unforeseen expenses. As for the Baltic ports, they are rather loyal. As for us, long-term storage or many other services simply do not exist…
And if this service is not rendered by us, it is quite likely that this situation allows a number of unfair importers to use illegal customs clearance schemes our country’s budget is suffering from.
“It is important to enhance control over the cargoes imported from the Baltic countries, – Mr. Zanin is positive. – We have addressed the FCS with our proposals and expect a double effect in case they are implemented – redirecting cargo flows to Russian ports and rise in customs duties volume.
Moreover, the marking issue has again grown more acute. A lot of importers have to bring cargoes to the Baltic ports due to marking requirements to be met prior to import to the Russian Federation. As of October 1, footwear is subject to mandatory labelling, and part of this cargo has already left for the Baltic. Accordingly, we need to address the Government to change this situation and find an urgent solution to this issue and many more…
A wide variety of proposals were made at the forum, including technical solutions to axle load issues, consolidation of market participants around digital platforms and a whole lot more was discussed in the hall and on the sidelines. Problems faced by market players and the entire country today are more pressing than ever, and the transport community is getting ready to stand for its future. Major discussion is now evolving on many sites aiming to finally contribute to settlement of these issues everybody is so sick and tired of.
Preliminary list of participants of the TransСont 2019 conference\ as of 09.10.2019\
Savkina Natalia, head of import department
Kormanovskiy Andrey, head of import direction
Redicheva Evgenia, head of import direction
Food and agriculture
Pustishilov Vladislav, commercial director
Kapitonov Alexander, head of multimodal transportations department
Serykh Anna, head of FEA
Mrachkovskaya Elizaveta, manager of transport and logistics activities
Karlushin Alexander, logistics department senior manager
PPM and timber exporters
Arkhangelsk Pulp & Paper Mill
Pilipko Galina, container transportations specialist
Danilina Marina, head of forwarding department
Ivanov Alexey, director for container forwarding development
Petrochemical and fertilizer companies
Kosikhin Evgeniy, chief specialist for forwarding of transporting department
Sidushkin Anton, specialist for container forwarding organization
Astashkin Oleg, FEA manager
Gorodko Ekaterina, chief expert, multimodal logistics
Bartseva Yulia, logistics chief specialist
Freight forwarding companies
Sysolyatin Oleg, head of general cargoes transportation department
Simonov Evgeniy, head of maritime container transportations department
Atasu Logistics (Kazakhstan)
Dosaeva Sholpan, head of international department
Tashkenbaeva Marina, director for production
Baltijos pervežimai (Lithuania)
Proskurin Andrey, forwarding manager
Smirnov Pavel, CEO
Galymova Natalia, commercial director
Bodrov Daniil, commercial director
Trusov Alexey, deputy director for container forwarding
Kovalchenko Anna, manager of international forwarding
Alekseev Alexander, CEO
Khan Natalia, director for multimodal forwarding
Gromovoy Andrey, sales director
Semochkin Alexander, commercial director директор
Chernykh Alexey, director of Saint-Petersburg branch
Verbilo Oleg, chief specialist of container department of Saint-Petersburg branch
Yanssen Oksana, head of direction
Martynov Alexey, CEO
Yakimova olga, commercial director
Abilov Kamran, head of direction, department of strategic marketing
Ivanov Viktor, executive director
Ports and terminals
Timber Terminal “Factor”
Makhonko Alexander, CEO
Skachkovskiy Alexander, acting director of Minsk branch
Chernyshova Yulia, head of forwarding bureau of logistics department of Minsk branch
Banks and insurance companies
Nikoda Kirill, economic forecasting center expert
Admiral Makarov State University of Maritime and Inland Shipping
Kuznetsov Alexander, ports and cargo terminals department professor
Gallichnyi Sergey, director
Makarova Natalia, executive secretary of the banking commission
Burmistrov Mikhail, director
Popov German, technology department engineer